KRS 78.615: Deduction of employee contributions -- Service credit -- Employer's

report -- Picked-up employee contributions.

(1) Employee contributions shall be deducted each payroll period from the

creditable compensation of each employee of an employer participating in the

system while he or she is classified as regular full-time as defined in KRS

78.510 unless the person did not elect to become a member as provided by

KRS 78.540 or is not eligible to participate in the system as provided by KRS

78.535. After August 1, 1982, employee contributions shall be picked up by the

employer pursuant to KRS 78.610(4).

(a) For employees who are not employed by a school board, service credit

shall be allowed for each month contributions are deducted or picked up

during a fiscal or calendar year, if the employee receives creditable

compensation for an average of one hundred (100) hours or more of work

per month based on the actual hours worked in a calendar or fiscal year.

If the average number of hours of work is less than one hundred (100)

hours per month, the employee shall be allowed credit only for those

months he or she receives creditable compensation for one hundred

(100) hours of work.

(b) For noncertified employees of school boards, for service prior to July 1,

2000, service credit shall be allowed for each month contributions are

deducted or picked up under the employee's employment contract during

a school year determined by dividing the actual number of contracted

calendar days worked by twenty (20) and rounded to the nearest whole

month if the employee receives creditable compensation for an average

of eighty (80) or more hours of work per month based on the employee's

employment contract. The school board shall certify the number of

calendar days worked, the rate of pay, and the hours in a work day for

each employee monthly or annually. The employer shall file at the

retirement office the final monthly report or the annual report for a fiscal

year no later than twenty (20) days following the completion of the fiscal

year. The retirement system shall impose a penalty on the employer of

one thousand dollars ($1,000) if the information is not submitted by the

date required with an additional two hundred and fifty dollars ($250) for

each additional thirty (30) day period the information is reported late.

1. If the employee works fewer than the number of contracted calendar

days, the employee shall receive service credit determined by

dividing the actual number of contracted calendar days worked by

twenty (20) and rounded to the nearest whole month, provided that

the number of hours worked during the period averages eighty (80)

or more hours.

2. If the employee works fewer than the number of contracted calendar

days and the average number of hours worked is less than eighty

(80) per month, then the employee shall receive service credit for

each calendar month in which he or she worked eighty (80) or more

hours.

3. The retirement system shall refund contributions and service credit

for any period for which the employee is not given credit under this

subsection.

(c) For noncertified employees of school boards, for service on and after July

1, 2000, at the close of each fiscal year, the retirement system shall add

service credit to the account of each employee who made contributions to

his or her account during the year. Employees shall be entitled to a full

year of service credit if their total paid calendar days were not less than

one hundred eighty (180) calendar days for a regular school or fiscal year.

In the event an employee is paid for less than one hundred eighty (180)

calendar days, the employee may purchase credit according to

administrative regulations promulgated by the system. In no case shall

more than one (1) year of service be credited for all service performed in

one (1) fiscal year. Employees who complete their employment contract

prior to the close of a fiscal year and elect to retire prior to the close of a

fiscal year shall have their service credit reduced by eight percent (8%)

for each calendar month that the retirement becomes effective prior to

July 1. Employees who are employed and paid for less than the number

of calendar days required in their normal employment year shall be

entitled to pro rata service credit for the fractional service. This credit shall

be based upon the number of calendar days employed and the number of

calendar days in the employee's annual employment agreement or

normal employment year. Service credit may not exceed the ratio

between the school or fiscal year and the number of months or fraction of

a month the employee is employed during that year.

(d) Notwithstanding paragraph (c) of this subsection, a noncertified employee

of a school board who retires between July 1, 2000, and August 1, 2001,

may choose to have service earned between July 1, 2000, and August 1,

2001, credited as described in paragraph (b) of this subsection, if the

employee or retired member notifies the retirement system within one (1)

year of his or her initial retirement. The decision once made shall be

irrevocable.

(2) Employee contributions shall not be deducted from the creditable

compensation of any employee or picked up by the employer while he or she is

seasonal, emergency, temporary, or part-time. No service credit shall be

earned.

(3) Contributions shall not be made or picked up by the employer and no service

credit shall be earned by a member while on leave except:

(a) A member on military leave shall be entitled to service credit in

accordance with KRS 61.552; and

(b) A member on approved educational leave, who is receiving seventy-five

percent (75%) or more of full salary, shall receive service credit and shall

pay member contributions in accordance with KRS 78.610, and his or her

employer shall pay employer contributions in accordance with KRS

78.635. If a tuition agreement is broken by the member, the member and

employer contributions paid or picked up during the period of educational

leave shall be refunded.

(4) The retirement office, upon detection, shall refund any erroneous employer and

employee contributions made to the retirement system and any interest

credited in accordance with KRS 78.640.