KRS 90.410: Pension fund in cities -- Increase in benefits -- 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 maintenanc e 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 existing pension fund in accordance with this section. The

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

be equitably determined on a fair actuarial basis, not to exceed five percent (5%) of

the monthly salary of any employee. The city legislative body shall contribute city

revenues to the fund which shall be not less than the contributions of the employees.

(2) The city may create a board for the pension fund and designate trustees of that board

to serv e as the governing body of the fund, and may fix the powers of 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,

not to exceed one-half (1/2) of the monthly salary of any employee at the time of his

or her retirement.

(3) In order to adjust retirement benefits to the purchasing power of the dollar, the city

may annually provide an increase in benefits paid pursuant to this section. The city

may provide an increase of any amount up to the increase in the consumer price

index calculated pursuant to KRS 64.527, but in no case shall the annual increase

exceed five percent (5%).

(4) When any city maintaining a pension fund for employees unde r civil service 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 (5) 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.

(5) 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 pl an for its 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 Retirem ent System under the alternate

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

retain coverage under this section.

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

pension fund, th e governing 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 shal l provide to individuals entitled to

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

making an informed decision.

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

pension fund co vered 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 r eturn 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 legislativ e body of 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.