KRS 78.5532: Death before retirement -- Beneficiary's options -- Taxable distributions --

Injuries connected with performance of duty.

(1) If a member dies prior to the first day of the month in which the member would

have received his or her first retire ment allowance, the member's beneficiary shall

be eligible for the benefits provided by this section if the member had on file a

written designation of a beneficiary with the retirement office as provided by KRS

61.542 and the member met the following conditions at the date of his or her death:

(a) 1. The member had service in a nonhazardous position and was eligible to

retire under KRS 78.5510(2) or (3) or 78.5512(6); or

2. The member had service in a hazardous position and was eligible to

retire under KRS 78.5514(2) or (3) or 78.5516(6);

(b) The member was in active employment or on authorized leave of absence

with five (5) or more years of service credit and died prior to his or her normal

retirement date or in the case of a nonhazardous member, was norma l

retirement age or older and had at least four (4) years of service credit; or

(c) The member was not in active employment or on authorized leave of absence

with twelve (12) or more years of service credit and died prior to his or her

normal retirement date.

(2) If the beneficiary eligible for benefits as provided in subsection (1) of this section is

a single person or a special needs trust, then the beneficiary may elect to receive:

(a) A monthly benefit payable for the life of the beneficiary or the life of the

beneficiary of the special needs trust that is equal to the benefit that would

have been paid had the member retired immediately prior to his or her date of

death and elected to receive benefits payable under the survivorship one

hundred percent (100%) option as provided in KRS 61.635(2);

(b) A monthly benefit payable for the life of the beneficiary or the life of the

beneficiary of the special needs trust under the beneficiary Social Security

adjustment option as provided in KRS 61.635(9) that is the actuarial

equivalent to the amount computed under paragraph (a) of this subsection;

(c) A monthly benefit payable for a period of sixty (60) months that is the

actuarial equivalent to the amount computed under paragraph (a) of this

subsection;

(d) A monthly benefit payable for a period of one hundr ed twenty (120) months

that is the actuarial equivalent to the amount computed under paragraph (a) of

this subsection;

(e) If the member began participating prior to January 1, 2014, a monthly benefit

payable for a period of one hundred twenty (120) months that is equivalent to

the benefit the member would have been entitled to receive based on his or

her years of service and final compensation at the date of his or her death

reduced by the survivorship fifty percent (50%) factor as provided for in KRS

61.635(4), then reduced by fifty percent (50%), and that is the actuarial

equivalent to the amount computed under paragraph (a) of this subsection; or

(f) The higher of a refund of the member's accumulated account balance as

described in KRS 61.625(1) or one ( 1) time lump -sum payment which shall

be the actuarial equivalent of the amount payable under paragraph (a) of this

subsection for a period of sixty (60) months.

(3) If the beneficiary eligible for benefits as provided by subsection (1) of this section

is multiple beneficiaries or a trust, other than a special needs trust, then the multiple

beneficiaries by consensus or the trustee may elect to receive the actuarial

equivalent amounts payable under subsection (2)(c), (d), (e), or (f) of this section

using the assumption that the beneficiary's age is the same as the member's age.

(4) If the beneficiary eligible for benefits as provided in subsection (1) of this section is

the member's estate, then the beneficiary shall receive the higher of a refund of the

member's accumulated account balance as described in KRS 61.625(1) or the one

(1) time lump -sum payment payable under subsection (2)(f) of this section, using

the assumption that the beneficiary's age is the same as the member's age.

(5) Payments of taxable d istributions made pursuant to this section shall be subject to

state and federal income tax as appropriate.

(6) (a) The beneficiary of a member with service in a nonhazardous position who

dies as a result of a duty-related injury may be eligible for benefits based upon

the definitions, criteria, and benefits specified by KRS 61.621.

(b) The beneficiary of a member with service in a hazardous position who dies as

a direct result of an act in line of duty may be eligible for benefits from the

system based upo n the definitions, criteria, and benefits specified by KRS

78.5534.