{"data":{"id":"us-ky/krs-18a.255","jurisdiction":"us-ky","citation":"KRS 18A.255","heading":"Investments -- Limitation of liability -- Standards of conduct.","body":"(1) Subject to subsections (3) and (4) of this section but notwithstanding any other\nprovision of KRS 18A.230 to 18A.275, funds held for the state public employees\ndeferred c ompensation trust fund pursuant to agreement between the state and\nparticipating employees may be invested in such investments as are deemed\nappropriate by the trustees, including but not limited to annuity contracts.\nAgreements may be made in writing or b y electronic record, signature, or contract\nas determined by the authority in accordance with the provisions of KRS 369.101 to\n369.120 and shall not be denied legal effect or enforceability if made electronically\nto the extent permitted by the authority.\n(2) Funds deposited to the credit of the trust fund from payroll deductions made\npursuant to KRS 18A.250 shall be temporarily invested as provided in KRS 42.500\nuntil such funds are invested pursuant to the deferred compensation agreements\nbetween the state and participating employees and actually credited to accounts for\nplan participants. Notwithstanding KRS 42.500, interest earned from such\ntemporary investments and by the trust fund and the corpus of the trust fund shall\nbe used to defray the expenses of  administering the deferred compensation plans,\nincluding but not limited to all business and operational expenses, premiums for\ngeneral and fiduciary liability insurance and deductible costs, and costs to settle\nclaims against the authority, its plans, an d trustees, as determined by the board in\nthe best interest of plan participants.\n(3) Neither the authority nor the board shall be liable for any losses or claims due to a\nparticipant's actions in connection with the investment advice or financial planning\nprovided to the participant by operation of KRS 18A.245(7)(f) or other statute or\nadministrative regulation. The authority and board shall have no duty or obligation\nto monitor, review, or assess the specific investment advice or financial planning\nprovided to a participant.\n(4) (a) The participant shall have sole responsibility for evaluation, selection, and\nmonitoring of investments held in his or her self -directed brokerage account,\nand shall at all times be and remain responsible and liable for any losses in his\nor her self -directed brokerage account. Expenses charged for use of a self -\ndirected brokerage account shall be paid solely by the participant.\n(b) Neither the authority nor the board shall be liable for any losses, expenses,\nliabilities, or clai ms due to a participant's actions in connection with a self -\ndirected brokerage account provided to the participant by operation of KRS\n18A.245(7)(g) or other statute or administrative regulation. The authority and\nboard shall have no duty or obligation to monitor, review, or assess the\ninvestments held in a participant's self -directed brokerage account or the self -\ndirected brokerage account's investment performance. Neither the authority\nnor the board shall be responsible for review or evaluation of fees of  a self-\ndirected brokerage account, including but not limited to fees of a self -directed\nbrokerage account's custodian or broker. The board's selection of a restricted\nasset list for self -directed brokerage accounts creates no presumption that the\nboard ha s any obligation or duty to select, monitor, or deem prudent assets\nwhich may be invested in a self-directed brokerage account.\n(5) (a) A trustee shall discharge his or her duties as a trustee, including his or her\nduties as a member of a committee:\n1. In good faith;\n2. On an informed basis; and\n3. In a manner he or she honestly believes to be in the best interest of the\nauthority and its plans and trusts.\n(b) A trustee discharges his or her duties on an informed basis if, when he or she\nmakes an inquiry into the business affairs of the board or authority or into a\nparticular action to be taken or decision to be made, he or she exercises the\ncare an ordinary pru dent person in a like position would exercise under\nsimilar circumstances.\n(c) In discharging his or her duties, a trustee may rely on information, opinions,\nreports, or statements, including financial statements and other financial data,\nif prepared or presented by:\n1. One (1) or more officers or employees of the board whom the trustee\nhonestly believes to be reliable and competent in the matters presented;\n2. Legal counsel, public accountants, or other persons as to matters the\ntrustee honestly believes a re within the person's professional or expert\ncompetence; or\n3. A committee of the board of trustees of which he or she is not a member\nif the trustee honestly believes the committee merits confidence.\n(d) A trustee shall not be considered as acting in goo d faith if he or she has\nknowledge concerning the matter in question that makes reliance otherwise\npermitted by paragraph (c) of this subsection unwarranted.\n(e) Any action taken as a trustee, or any failure to take any action as a trustee,\nshall not be the basis for monetary damages or injunctive relief unless:\n1. The trustee has breached or failed to perform the duties of the trustee's\noffice in compliance with this section; and\n2. In the case of an action for monetary damages, the breach or failure to\nperform constitutes willful misconduct or wanton or reckless disregard\nfor human rights, safety, or property.\n(f) A person bringing an action for monetary damages under this section shall\nhave the burden of proving by clear and convincing evidence the provisions of\nparagraph (e)1. and 2. of this subsection, and the burden of proving that the\nbreach or failure to perform was the legal cause of damages suffered by the\nauthority or its plans or trusts.","path":["KRS Chapter 18A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=56494","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:48:40Z","sha256":"a5fffa0eeb5a6569b7699defce9e7ebecdb842cdc66503b7f5bbe66b34404a6f","source_id":"us-ky","stale":false,"prev":"us-ky/krs-18a.252","next":"us-ky/krs-18a.260"},"notice":"GroundRules: Original legal text. Not legal advice."}