KRS 78.616: Purchase of service credit for unused sick leave -- Employer's election

to participate -- Accumulated sick leave added to employee's service

credit -- Payments by employer and employee -- Alternative

compensation -- City of first class -- Statute not applicable to employees

who began participation on or after January 1, 2014.

(1) Any employer participating in the County Employees Retirement System which

has formally adopted a sick-leave program that is universally administered to

its employees may purchase service credit with the retirement system for up to

six (6) months of unused sick leave for each retiring employee.

(2) Participation under this section shall be at the option of each participating

employer. The election to participate shall be made by the governing authority

of the participating employer and shall be certified in writing to the system on

forms prescribed by the board. The certification shall provide for equal

treatment of all employees participating under this section.

(3) (a) Upon the member's notification of retirement as prescribed in KRS

61.590, the employer shall certify the retiring employee's unused,

accumulated sick-leave balance to the system. The member's sick-leave

balance, expressed in days, shall be divided by the average number of

working days per month in county service and rounded to the nearest

number of whole months. A maximum of six (6) months of the member's

sick-leave balance, expressed in months, shall be added to his service

credit for the purpose of determining his annual retirement allowance

under KRS 78.510 to 78.852 and for the purpose of determining whether

the member is eligible to receive a retirement allowance under KRS

78.510 to 78.852, except as provided by paragraph (d) of this subsection.

Accumulated sick-leave in excess of six (6) months shall be added to the

member's service credit if the member or employer pays to the retirement

system the value of the additional service credit based on the formula

adopted by the board, subject to the restrictions provided by paragraph

(d) of this subsection.

(b) The employer may elect to pay fifty percent (50%) of the cost of the sick

leave in excess of six (6) months on behalf of its employees. The

employee shall pay the remaining fifty percent (50%). The payment by the

employer shall not be deposited to the member's account. Service credit

shall not be credited to the member's account until both the employer's

and employee's payments are received by the retirement system.

(c) Once the employer elects to pay all or fifty percent (50%) of the cost on

behalf of its employees, it shall continue to pay the same portion of the

cost.

(d) For a member who begins participating in the retirement system on or

after September 1, 2008, but prior to January 1, 2014, whose employer

has established a sick-leave program under subsections (1) to (4) and (6)

of this section:

1. The member shall receive no more than twelve (12) months of

service credit upon retirement for accumulated unused sick leave

accrued while contributing to the retirement system from which the

retirement benefit is to be paid;

2. The service added to the member's service credit shall be used for

purposes of determining the member's annual retirement allowance

under KRS 78.510 to 78.852;

3. The service added to the member's service credit shall not be used

to determine whether a member is eligible to receive a retirement

allowance under KRS 78.510 to 78.852; and

4. The cost of the service provided by this paragraph shall be paid by

the employer.

(4) The system shall compute the cost of the sick-leave credit of each retiring

employee and bill each employer with whom the employee accrued sick leave

accordingly. The employer shall remit payment within thirty (30) days from

receipt of the bill.

(5) (a) As an alternative to subsections (1), (3), (4), and (6) of this section, any

agency participating in the County Employees Retirement System which

has formally adopted a sick-leave program that is universally

administered to its employees, or administered to a majority of eligible

employees in accordance with subsection (6) of this section, shall, at the

time of termination, or as provided in KRS 161.155 in the case of school

boards, compensate the employee for unused sick-leave days the

employee has accumulated which it is the uniform policy of the agency to

allow.

(b) The rate of compensation for each unused sick-leave day shall be based

on the daily salary rate calculated from the employee's current rate of

pay. Payment for unused sick-leave days shall be incorporated into the

employee's final compensation if the employee and employer make the

regular employee and employer contributions, respectively, on the

sick-leave payment.

(c) The number of sick-leave days for which the employee is compensated

shall be divided by the average number of working days per month in

county service and rounded to the nearest number of whole months. This

number of months shall be added to the employee's total service credit

and to the number of months used to determine creditable compensation,

pursuant to KRS 78.510, but no more than sixty (60) months shall be

used to determine final compensation. For an employee who begins

participating on or after September 1, 2008, but prior to January 1, 2014,

the number of months added to the employee's total service credit under

this paragraph shall not exceed twelve (12) months, and the additional

service shall not be used to determine whether a member is eligible to

receive a retirement allowance under KRS 78.510 to 78.852.

(6) Any city of the first class that has two (2) or more sick-leave programs for its

employees may purchase service credit with the retirement system for up to six

(6) months of unused sick leave for each retiring employee who participates in

the sick-leave program administered to a majority of the eligible employees of

the city. An employee participating in a sick-leave program administered to a

minority of the eligible employees shall become eligible for the purchase of

service credit under this subsection when the employee commences

participating in the sick-leave program that is administered to a majority of the

eligible employees of the city.

(7) The provisions of this section shall not apply to employees who begin

participating in the system on or after January 1, 2014, and no service credit

shall be provided for accumulated sick leave balances of those employees who

begin participating in the system on or after January 1, 2014.