KRS 95.874: Records and accounts -- Accurate system to be maintained.

(1) An adequate system of accounts and records shall be established and maintained for

the fund that will reflect fully the requirements of the provisions of KRS 95.851 to

95.884 and KRS 95.991. This system shall be integrated, to the extent possible with

the accounts, records, and procedures of the city to the end that the same shall

operate most effectively and at minimum expense, and that duplication of records

and accounts may be avoided.

(2) All assets of the fund shall be credited according to the purpose s for which they are

held in the following designated reserve accounts:

(a) Members' Contribution Reserve. The amounts contributed by the members,

including those employee contributions picked up by the employer pursuant to

KRS 65.155, shall be credited to this reserve, together with regular interest

thereon as herein provided. An individual account shall be maintained for

each member, to which shall be credited the amounts of his contributions.

Upon the granting of a service retirement annuity, disability annuity, or

survivor's annuity or benefit, the accumulated contributions to the credit of the

member concerned shall be transferred from this reserve to the retirement

reserve. Refunds and death payments representing member's contributions

shall be charged to this reserve.

(b) Employer's Contribution Reserve. The amounts contributed by the city under

the provisions hereof, for service retirement annuity, disability retirement

annuity, and benefits to survivors covering membership service and prior

service, shall be credited to this reserve. Upon the granting of a service

retirement annuity, disability retirement annuity, or survivor's benefit, an

amount representing the excess of the actuarial value of the annuity, or benefit

over the accumulated contributio ns of the member, shall be transferred from

this reserve to the retirement reserve.

(c) Retirement Reserve. Upon the granting of a service retirement annuity,

disability retirement annuity, or survivor's benefit, the accumulated

contributions of the member and an amount representing the excess of the

actuarial value of the annuity or benefit over such accumulated contributions,

shall be transferred to this reserve from the member's contribution reserve and

employer's contribution reserve, respectively. All income from investments,

including gains on investment transactions, shall be credited to this reserve.

All losses on investments shall be charged to this reserve. All payments on

account of any annuity made by the fund shall be charged to this reserve. An y

excess balance in this reserve, as determined by actuarial valuation as of the

close of any fiscal year, shall be applied to reduce the city's contributions for

membership service for the fiscal years next following the date of such

valuation. Any defici ency in this reserve shall be removed by an increase in

the amount of city's contributions for future membership service.