KRS 95.869: Board of trustees to operate fund and direct policies -- Membership --

Removal for cause -- Option to convert pension benefits to annuity benefits --

Repeal of ordinances establishing pension fund -- Liquidation and distribution

of residual assets -- Report.

(1) (a) The responsibility for the proper operation of the fund and the direction of its

policies shall be vested in a board of trustees.

(b) If there are no active members of the fund, the board of trustees shall consist

of four (4) member s who shall be: (a) the mayor ex officio; (b) the city

treasurer or chief financial officer ex officio; and (c) one (1) retired member of

each department who shall be elected by ballot by the retired members of the

respective departments. The mayor ex offi cio and the city treasurer ex officio

shall serve for terms of one (1) year under rules adopted by the board. The two

(2) retired members of the police and fire department shall serve for terms of

at least one (1) year with a maximum of two (2) years under rules adopted by

the board. If there are active members of the fund, there shall be two (2)

additional board members who shall be one (1) active member of the fund

from each department elected by ballot by the active members of the fund

from the respective departments and who shall serve for terms of at least one

(1) year with a maximum of two (2) years under rules adopted by the board. If

all of the active members or all of the retired members are from one (1)

department, then both of the active -member bo ard members or both of the

retired board members shall be elected from that department.

(c) If there are fewer than six (6) active and retired members of the fund, the

board of trustees shall be composed of the mayor, city treasurer or chief

financial officer, and two (2) employees appointed by the mayor, one (1) from

the city police department and one (1) from the city fire department, who shall

serve for one (1) year and until their respective successors are appointed and

qualified. If all of the members of the pension fund are from one (1)

department, no appointment shall be made from the other department.

(d) If there are fewer than six (6) active and retired members of the fund from one

(1) department, the board of trustees shall be composed of the mayo r, city

treasurer or chief financial officer, one (1) retired member of the department

with six (6) or more active or retired members of the fund who shall be

elected by ballot by the retired members of the department, and one (1)

employee appointed by the mayor from the department with fewer than six (6)

active and retired members of the fund who shall serve for one (1) year and

until their respective successors are appointed and qualified.

(e) In the event of a vacancy of an elected member, the pension board may fill the

vacancy by appointment until the next regular election.

(2) The board of trustees membership shall be restructured according to the provisions

of this section at the time of the next scheduled election of board members after

July 15, 2020.

(3) Any member of the board convicted of an offense relating to mismanagement or

embezzlement of the fund created pursuant to KRS 95.852 shall be removed from

the board and shall be prohibited from serving on the board. If the board member

removed is an e x officio member, the city council shall appoint a replacement until

another person shall fill the office entitled to a seat on the board. If the board

member removed is an active policeman or firefighter, the board shall fill the

vacancy by appointment of another active policeman or firefighter until the next

regular election.

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

policemen's and firefighters' pension fund, the 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 shall provide to individuals

entitled to benefits from the fund sufficiently complete and appropriate disclosures

to assist in making an informed decision.

(5) If all liabilities to all individuals entitled to benefits from the policemen's and

firefighters' pension fund have been satisfied, the ordinance s establishing the fund

may be repealed by the majority vote of the duly elected members of the entire

legislative body. If repealed, the fund's board of trustees 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

board of trustees to the city's general fund so long as the return of assets complies

with federal and state law governing the distribution of assets. Withi n thirty (30)

days following the distribution of residual assets, the board of trustees of the fund

shall as its last act file a complete report with the legislative body of the city of the

actions taken to terminate the fund and liquidate residual assets of the fund for

retention by the city clerk the same as for other city records.