KRS 90.400: Pension fund in cities -- Coverage provided in County Employees

Retirement System after August 1, 1988 -- Option to convert pension benefits

to annuity benefits -- Repeal of ordinances established for creation or

maintenance of pension fund -- Liquidation and distribution of residual assets

-- Report.

(1) Any city maintaining a pension fund for employees under civil service hired before

August 1, 1988, operating pursuant to this section as of January 1, 2015, shall

continue to operate the exist ing pension fund in accordance with this section. The

city may assess monthly such amount or percent of the salary of the employees as

may be equitably determined on a fair actuarial basis, the assessment to be deducted

from the employees' salaries and paid in cash into the pension fund.

(2) The city may make current contributions to the fund on an actuarially funded basis,

toward the annuities and benefits herein provided. These contributions shall be

equal to the sum of the following:

(a) An annual amount resulting from the application of a rate percent of salaries

of active members, representing the present value of the actuarial reserve

requirements for membership service, for service retirement annuity, disability

retirement annuity, and annuities to su rviving spouses and children, and the

one (1) year term premium for the city's liability for death benefits, after

applying the contribution by the active members. Such rate percent shall be

fixed by the city legislative body at least once every three (3) to five (5) years

after completion of the actuarial valuation required by KRS 65.156, and shall

be in effect until the next actuarial valuation is completed by the fund.

(b) An amount resulting from the application of a rate percent of the salaries of

active members which will provide each year regular interest on the remaining

liability for prior service.

(3) The city may create or continue to operate a board for the pension fund and

designate trustees of that board to serve as the governing body of the fu nd, and may

fix the powers of the trustees, determine the eligibility of employees or their

dependents to a pension or other benefit, and may provide a monthly allowance for

employees eligible for a pension.

(4) Temporary employees appointed without examin ation shall not be compelled to

contribute to any pension fund and shall not be eligible to benefits.

(5) In no year shall the contribution by the city to the pension fund, in the manner

provided in this section, be less than the total amount assessed upon and deducted

from the salary of the employees.

(6) The trustees of the pension fund shall, at least once every three (3) months, report in

writing to the mayor the receipts, expenditures, and financial status of the pension

fund, stating the places of dep osit of funds, or the character of investments made,

and the mayor shall cause copies of the report to be posted in at least three (3)

places where city employees frequent and report.

(7) When any city maintaining a pension fund for employees under civil s ervice hired

before August 1, 1988, operating pursuant to this section as of January 1, 2015,

picks up employee contributions pursuant to KRS 65.155, or accepts from its

employees a portion of their wages and contributes city funds therefor, an inviolable

contract shall be created between the city as employer and its employees, and the

city and its employees shall continue to operate under KRS 90.310 to 90.390 and

the adopting ordinance, except that employees, pursuant to subsection (8) of this

section, may choose to participate in the County Employees Retirement System. A

repeal of that ordinance by the city shall in no wise affect such employees unless by

the mutual consent of the city and an employee or employees.

(8) After August 1, 1988, no new pension fund shall be created pursuant to this section,

and cities which were covered by this section on or prior to August 1, 1988, shall

participate in the County Employees Retirement System effective August 1, 1988.

Any city which provided a pension plan for it s employees on or prior to August 1,

1988, shall place employees hired after August 1, 1988, in the County Employees

Retirement System. The board shall offer employees hired on or prior to August 1,

1988, membership in the County Employees Retirement Syste m under the alternate

participation plan as described in KRS 78.530(3), but such employees may elect to

retain coverage under this section.

(9) If there are fewer than twelve (12) active and retired members or beneficiaries of the

pension fund, the governi ng body of the fund may elect to offer to individuals

entitled to benefits from the fund a one (1) time irrevocable option to convert

monthly pension benefits from the fund to monthly annuity benefits from an

insurance company for the same amount. An insurance company accepting a benefit

transfer shall honor any features and options available under the existing plan. If the

governing body of the fund elects to offer the option to convert monthly pension

benefits to monthly annuity benefits, it shall provide to individuals entitled to

benefits from the fund sufficiently complete and appropriate disclosures to assist in

making an informed decision.

(10) If all liabilities to all individuals entitled to benefits have been satisfied for a

pension fund covered by this section, any ordinances established for creation or

maintenance of the fund may be repealed by the majority vote of the duly elected

members of the entire legislative body of the city. If repealed, the governing body of

the fund shall, within sixty ( 60) days of repeal, proceed with the liquidation of any

residual assets of the fund. All residual assets liquidated pursuant to this subsection

shall be distributed by the fund's governing body to the city government's general

fund so long as the return of assets complies with federal and state law governing

the distribution of assets. Within thirty (30) days following the distribution of

residual assets, the governing body of the fund shall as its last act file a complete

report with the legislative body o f the city of the actions taken to dissolve the fund

and liquidate residual assets of the fund for retention by the city clerk the same as

for other city records.