{"data":{"id":"us-ky/krs-61.637","jurisdiction":"us-ky","citation":"KRS 61.637","heading":"Suspension of retirement payments on reemployment -- Reinstatement --","body":"Recomputation of allowance -- Waiver of provisions in certain instances --\nReemployment in a different position -- Effect of reemployment of retired\nmember -- Retired member ser ving as volunteer, independent contractor, or\nleased employee -- Effect of reelection for same office -- Resignation not\nrequired of certain mayors and city legislative body members to draw benefits\n-- Certification of absence of prearranged agreement or q ualification as\nindependent contractor or leased employee -- Forms.\n(1) A retired member who is receiving monthly retirement payments under any of the\nprovisions of KRS 61.510 to 61.705 and 78.510 to 78.852 and who is reemployed\nas an employee by a participating agency prior to August 1, 1998, shall have his or\nher retirement payments suspended for the duration of reemployment. Monthly\npayments shall not be suspended for a retired member who is reemployed if he or\nshe anticipates that he or she will receive less than the maximum permissible\nearnings as provided by the Federal Social Security Act in compensation as a result\nof reemployment during the calendar year. The payments shall be suspended at the\nbeginning of the month in which the reemployment occurs.\n(2) Employer and employee contributions shall be made as provided in KRS 61.510 to\n61.705 and 78.510 to 78.852 on the compensation paid during reemployment,\nexcept where monthly payments were not suspended as provided in subsection (1)\nof this section or would not increase the retired member's last monthly retirement\nallowance by at least one dollar ($1), and the member shall be credited with\nadditional service credit.\n(3) In the month following the termination of reemployment, retirement allow ance\npayments shall be reinstated under the plan under which the member was receiving\npayments prior to reemployment.\n(4) (a) Notwithstanding the provisions of this section, the payments suspended in\naccordance with subsection (1) of this section shall be paid retroactively to the\nretired member, or his or her estate, if he or she does not receive more than\nthe maximum permissible earnings as provided by the Federal Social Security\nAct in compensation from participating agencies during any calendar year of\nreemployment.\n(b) If the retired member is paid suspended payments retroactively in accordance\nwith this section, employee contributions deducted during his or her period of\nreemployment, if any, shall be refunded to the retired employee, and no\nservice credit shall be earned for the period of reemployment.\n(c) If the retired member is not eligible to be paid suspended payments for his or\nher period of reemployment as an employee, his or her retirement allowance\nshall be recomputed under the plan under whic h the member was receiving\npayments prior to reemployment as follows:\n1. The retired member's final compensation shall be recomputed using\ncreditable compensation for his or her period of reemployment;\nhowever, the final compensation resulting from the rec alculation shall\nnot be less than that of the member when his or her retirement allowance\nwas last determined;\n2. If the retired member initially retired on or subsequent to his or her\nnormal retirement date, his or her retirement allowance shall be\nrecomputed by using the formula in KRS 61.595(1);\n3. If the retired member initially retired prior to his or her normal\nretirement date, his or her retirement allowance shall be recomputed\nusing the formula in KRS 61.595(2), except that the member's age used\nin computing benefits shall be his or her age at the time of his or her\ninitial retirement increased by the number of  months of service credit\nearned for service performed during reemployment;\n4. The retirement allowance payments resulting from the recomputation\nunder this subsection shall be payable in the month following the\ntermination of reemployment in lieu of payme nts under subparagraph 3.\nof this paragraph. The member shall not receive less in benefits as a\nresult of the recomputation than he or she was receiving prior to\nreemployment or would receive as determined under KRS 61.691; and\n5. Any retired member who was reemployed prior to March 26, 1974, shall\nbegin making contributions to the system in accordance with the\nprovisions of this section on the first day of the month following March\n26, 1974.\n(5) A retired member, or his or her estate, shall pay to the reti rement fund the total\namount of payments which are not suspended in accordance with subsection (1) of\nthis section if the member received more than the maximum permissible earnings as\nprovided by the Federal Social Security Act in compensation from partici pating\nagencies during any calendar year of reemployment, except the retired member or\nhis or her estate may repay the lesser of the total amount of payments which were\nnot suspended or fifty cents ($0.50) of each dollar earned over the maximum\npermissible earnings during reemployment if under age sixty -five (65), or one\ndollar ($1) for every three dollars ($3) earned if over age sixty-five (65).\n(6) (a) \"Reemployment\" or \"reinstatement\" as used in this section shall not include a\nretired member who has been ordered reinstated by the Personnel Board under\nauthority of KRS 18A.095.\n(b) 1. A retired member who has been ordered reinstated without loss of pay\nby the Personnel Board under authority of KRS 18A.095 or by court\norder or by order of the Kentucky Comm ission on Human Rights and\naccepts employment by an agency participating in the Kentucky\nEmployees Retirement System, State Police Retirement System, or\nCounty Employees Retirement System shall void his or her retirement\nby reimbursing the system in the fu ll amount of his or her retirement\nallowance payments received, including any health insurance benefits\npaid to or on behalf of the member.\n2. Within twelve (12) months of the date of the final order of the Personnel\nBoard, the Kentucky Commission on Human  Rights, or the court, the\nmember shall repay the system the full amount of his or her retirement\nallowance payments and health insurance benefits by lump sum or enter\ninto an agreement with the Authority for repayment by installments.\n3. Once the system has been fully reimbursed for the benefits paid to the\nmember and on the member's behalf, additional contributions and\nservice credit based on the reinstated employment shall be added to the\nmember's account.\n(7) (a) Effective August 1, 1998, the provision s of subsections (1) to (4) of this\nsection shall no longer apply to a retired member who is reemployed in a\nposition covered by the same retirement system from which the member\nretired. Reemployed retired members shall be treated as new members upon\nreemployment. Any retired member whose reemployment date preceded\nAugust 1, 1998, who does not elect, within sixty (60) days of notification by\nthe retirement systems, to remain under the provisions of subsections (1) to\n(4) of this section shall be deemed to h ave elected to participate under this\nsubsection.\n(b) A retired member whose disability retirement was discontinued pursuant to\nKRS 61.615 and who is reemployed in one (1) of the systems administered by\nthe Kentucky Retirement Systems or County Employees R etirement System\nprior to his or her normal retirement date shall have his or her accounts\ncombined upon termination for determining eligibility for benefits. If the\nmember is eligible for retirement, the member's service and creditable\ncompensation earned as a result of his or her reemployment shall be used in\nthe calculation of benefits, except that the member's final compensation shall\nnot be less than the final compensation last used in determining his or her\nretirement allowance. The member shall not c hange beneficiary or payment\noption designations. This provision shall apply to members reemployed on or\nafter August 1, 1998.\n(8) If a retired member accepts employment or begins serving as a volunteer with an\nemployer participating in the systems adminis tered by Kentucky Retirement\nSystems or County Employees Retirement System within twelve (12) months of his\nor her retirement date, the retired member shall notify the Authority and the\nparticipating employer shall submit the information required or reques ted by the\nAuthority to confirm the individual's employment or volunteer status. The retired\nmember shall not be required to notify the Authority regarding any employment or\nvolunteer service with a participating agency that is accepted after twelve (12)\nmonths following his or her retirement date.\n(9) If the retired member is under a contract to provide services as an independent\ncontractor or leased employee to an employer participating in the systems\nadministered by Kentucky Retirement Systems or County Employees Retirement\nSystem within twelve (12) months of his or her retirement date, the member shall\nsubmit a copy of that contract to the Authority, and the Authority shall determine if\nthe member is an independent contractor or leased employee for purpo ses of\nretirement benefits. The retired member and the participating employer shall submit\nthe information required or requested by the Authority to confirm the individual's\nstatus as an independent contractor or leased employee. The retired member shall\nnot be required to notify the Authority regarding any services entered into as an\nindependent contractor or leased employee with a participating agency that the\nemployee enters into after twelve (12) months following his or her retirement date.\n(10) If a member is receiving a retirement allowance, or has filed the forms required for\na retirement allowance, and is employed within one (1) month of the member's\ninitial retirement date in a position that is required to participate in the same\nretirement system from which the member retired, the member's retirement shall be\nvoided and the member shall repay to the retirement system all benefits received.\nThe member shall contribute to the member account established for him or her prior\nto his or her voided retirem ent. The retirement allowance for which the member\nshall be eligible upon retirement shall be determined by total service and creditable\ncompensation.\n(11) (a) If a member of the Kentucky Employees Retirement System retires from a\ndepartment which particip ates in more than one (1) retirement system and is\nreemployed within one (1) month of his or her initial retirement date by the\nsame department in a position participating in another retirement system, the\nretired member's retirement allowance shall be sus pended for the first month\nof his or her retirement, and the member shall repay to the retirement system\nall benefits received for the month.\n(b) A retired member of the County Employees Retirement System who after\ninitial retirement is hired by the county  from which the member retired shall\nbe considered to have been hired by the same employer.\n(12) (a) If a hazardous member who retired prior to age fifty -five (55), or a\nnonhazardous member who retired prior to age sixty -five (65), is reemployed\nwithin six (6) months of the member's termination by the same employer, the\nmember shall obtain from his or her previous and current employers a copy of\nthe job description established by the employers for the position and a\nstatement of the duties performed by the member for the position from which\nhe or she retired and for the position in which he or she has been reemployed.\n(b) The job descriptions and statements of duties shall be filed with the retirement\noffice.\n(13) If the retirement system determines that the  retired member has been employed in a\nposition with the same principal duties as the position from which the member\nretired:\n(a) The member's retirement allowance shall be suspended during the period that\nbegins on the month in which the member is reemplo yed and ends six (6)\nmonths after the member's termination;\n(b) The retired member shall repay to the retirement system all benefits paid from\nsystems administered by Kentucky Retirement Systems or County Employees\nRetirement System under reciprocity, incl uding medical insurance benefits,\nthat the member received after reemployment began;\n(c) Upon termination, or subsequent to expiration of the six (6) month period\nfrom the date of termination, the retired member's retirement allowance based\non his or her i nitial retirement account shall no longer be suspended, and the\nmember shall receive the amount to which he or she is entitled, including an\nincrease as provided by KRS 61.691;\n(d) Except as provided in subsection (7) of this section, if the position in wh ich a\nretired member is employed after initial retirement is a regular full -time\nposition, the retired member shall contribute to a second member account\nestablished for him or her in the retirement system. Service credit gained after\nthe member's date of reemployment shall be credited to the second member\naccount; and\n(e) Upon termination, the retired member shall be entitled to benefits payable\nfrom his or her second retirement account.\n(14) (a) If the retirement system determines that the retired member has not been\nreemployed in a position with the same principal duties as the position from\nwhich he or she retired, the retired member shall continue to receive his or her\nretirement allowance.\n(b) If the position is a regular full -time position, the member shall contribute to a\nsecond member account in the retirement system.\n(15) (a) If a retired member is reemployed at least one (1) month after initial\nretirement in a different position, or at lea st six (6) months after initial\nretirement in the same position, and prior to normal retirement age, the retired\nmember shall contribute to a second member account in the retirement system\nand continue to receive a retirement allowance from the first member account.\n(b) Service credit gained after reemployment shall be credited to the second\nmember account. Upon termination, the retired member shall be entitled to\nbenefits payable from the second member account.\n(16) A retired member who is reemployed and c ontributing to a second member account\nshall not be eligible to purchase service credit under any of the provisions of KRS\n16.505 to 16.652, 61.510 to 61.705, or 78.510 to 78.852 which he or she was\neligible to purchase prior to his or her initial retirement.\n(17) Notwithstanding any provision of subsections (1) to (7)(a) and (10) to (15) of this\nsection, the following shall apply to retired members who are reemployed by an\nagency participating in one (1) of the systems administered by Kentucky\nRetirement S ystems or County Employees Retirement System on or after\nSeptember 1, 2008:\n(a) If a member is receiving a retirement allowance from one (1) of the systems\nadministered by Kentucky Retirement Systems or County Employees\nRetirement System, or has filed the forms required to receive a retirement\nallowance from one (1) of the systems administered by Kentucky Retirement\nSystems or County Employees Retirement System, and is employed in a\nregular full -time position required to participate in one (1) of the system s\nadministered by Kentucky Retirement Systems or County Employees\nRetirement System or is employed in a position that is not considered regular\nfull-time with an agency participating in one (1) of the systems administered\nby Kentucky Retirement Systems or County Employees Retirement System\nwithin one (1) month following the member's initial retirement date, the\nmember's retirement shall be voided, and the member shall repay to the\nretirement system all benefits received, including any health insurance\nbenefits. If the member is returning to work in a regular full -time position\nrequired to participate in one (1) of the systems administered by Kentucky\nRetirement Systems:\n1. The member shall contribute to a member account established for him or\nher in one (1) of the systems administered by Kentucky Retirement\nSystems or County Employees Retirement System, and employer\ncontributions shall be paid on behalf of the member by the participating\nemployer; and\n2. Upon subsequent retirement, the member shall be eligibl e for a\nretirement allowance based upon total service and creditable\ncompensation, including any additional service or creditable\ncompensation earned after his or her initial retirement was voided;\n(b) If a member is receiving a retirement allowance from o ne (1) of the systems\nadministered by Kentucky Retirement Systems or County Employees\nRetirement System and is employed in a regular full -time position required to\nparticipate in one (1) of the systems administered by Kentucky Retirement\nSystems or County Employees Retirement System after a one (1) month\nperiod following the member's initial retirement date, the member may\ncontinue to receive his or her retirement allowance during the period of\nreemployment subject to the following provisions:\n1. If a member is reemployed by a participating agency within twelve (12)\nmonths of the member's retirement date, the participating agency shall\ncertify in writing on a form prescribed by the Authority that no\nprearranged agreement existed between the employee and agen cy prior\nto the employee's retirement for the employee to return to work with the\nparticipating agency. If an elected official is reelected to a new term of\noffice in the same position as the elected official held prior to retirement\nand takes office within twelve (12) months of his or her retirement date,\nhe or she shall be deemed by the Authority as having a prearranged\nagreement under the provisions of this subparagraph and shall have his\nor her retirement voided. If the participating agency fails to complete the\ncertification, the member's retirement shall be voided and the provisions\nof paragraph (a) of this subsection shall apply to the member and the\nemployer. Employment that is accepted by the retired member after\ntwelve (12) months following the mem ber's retirement date shall not\nconstitute a prearranged agreement under this paragraph;\n2. Notwithstanding any other provision of KRS Chapter 16, 61, or 78 to\nthe contrary, the member shall not contribute to the systems and shall\nnot earn any additional b enefits for any work performed during the\nperiod of reemployment;\n3. Except as provided by KRS 70.291 to 70.293, 95.022, and 164.952 and\nexcept for any retiree employed as a school resource officer as defined\nby KRS 158.441 or as a Kentucky guardian as def ined by KRS\n158.4431, the employer shall pay employer contributions as specified by\nKRS 61.565, 61.702, and 78.635, as applicable, on all creditable\ncompensation earned by the employee during the period of\nreemployment. The additional contributions paid shall be used to reduce\nthe unfunded actuarial liability of the systems; and\n4. Except as provided by KRS 70.291 to 70.293, 95.022, and 164.952 and\nexcept for any retiree employed as a school resource officer as defined\nby KRS 158.441 or as a Kentucky guardi an as defined by KRS\n158.4431, the employer shall be required to reimburse the systems for\nthe cost of the health insurance premium paid by the systems to provide\ncoverage for the retiree, not to exceed the cost of the single premium.\nEffective July 1, 201 5, local school boards shall not be required to pay\nthe reimbursement required by this subparagraph for retirees employed\nby the board for eighty (80) days or less during the fiscal year. Effective\nAugust 1, 2024, the Department of Education shall pay for the health\nreimbursements required by this subparagraph for a retiree who\nparticipated in a hazardous position prior to July 1, 2003, in one (1) of\nthe systems administered by the Kentucky Retirement Systems or the\nCounty Employees Retirement System, and w ho is reemployed by a\nlocal school board;\n(c) Notwithstanding paragraphs (a) and (b) of this subsection, a retired member\nwho qualifies as a volunteer for an employer participating in one (1) of the\nsystems administered by Kentucky Retirement Systems or Co unty Employees\nRetirement System and who is receiving reimbursement of actual expenses, a\nnominal fee for his or her volunteer services, or both, shall not be considered\nan employee of the participating employer and shall not be subject to\nparagraphs (a) and (b) of this subsection if:\n1. Prior to the retired member's most recent retirement date, he or she did\nnot receive creditable compensation from the participating employer in\nwhich the retired member is performing volunteer services;\n2. Any reimbursement  or nominal fee received prior to the retired\nmember's most recent retirement date has not been credited as creditable\ncompensation to the member's account or utilized in the calculation of\nthe retired member's benefits;\n3. The retired member has not purch ased or received service credit under\nany of the provisions of KRS 61.510 to 61.705 or 78.510 to 78.852 for\nservice with the participating employer for which the retired member is\nperforming volunteer services; and\n4. Other than the status of volunteer, th e retired member does not become\nan employee, leased employee, or independent contractor of the\nemployer for which he or she is performing volunteer services for a\nperiod of at least twelve (12) months following the retired member's\nmost recent retirement date.\nIf a retired member, who provided volunteer services with a participating\nemployer under this paragraph violates any provision of this paragraph, then\nhe or she shall be deemed an employee of the participating employer as of the\ndate he or she began providing volunteer services and both the retired member\nand the participating employer shall be subject to paragraphs (a) and (b) of\nthis subsection for the period of volunteer service;\n(d) Notwithstanding any provision of this section, any mayor or memb er of a city\nlegislative body shall not be required to resign from his or her position as\nmayor or as a member of the city legislative body in order to begin drawing\nbenefits from the systems administered by Kentucky Retirement Systems or\nsubject to any provision of this section as it relates solely to his or her service\nas a mayor or member of the city legislative body if the mayor or member of a\ncity legislative body:\n1. Has not participated in the County Employees Retirement System prior\nto retirement, b ut is otherwise eligible to retire from the Kentucky\nEmployees Retirement System or the State Police Retirement System; or\n2. Has been or is participating in the County Employees Retirement\nSystem and is at least sixty-two (62) years of age. If a mayor or member\nof a city legislative body who is at least sixty -two (62) years of age\nretires from the systems administered by Kentucky Retirement Systems\nbut remains in office after his or her effective retirement date, the mayor\nor member of the city legislative  body shall not accrue any further\nservice credit or benefits in the systems administered by Kentucky\nRetirement Systems for any employment occurring on or after the\neffective retirement date;\n(e) Notwithstanding any provision of this section, any current or future part-time\nadjunct instructor for the Kentucky Fire Commission who has not participated\nin the Kentucky Employees Retirement System prior to retirement, but who is\notherwise eligible to retire from the County Employees Retirement System,\nshall not be:\n1. Required to resign from his or her position as a part -time adjunct\ninstructor for the Kentucky Fire Commission in order to begin drawing\nbenefits from the County Employees Retirement System; or\n2. Subject to any provis ion of this section as it relates solely to his or her\nservice as a part -time adjunct instructor for the Kentucky Fire\nCommission;\n(f) If a member is receiving a retirement allowance from any of the retirement\nsystems administered by the Kentucky Retiremen t Systems or County\nEmployees Retirement System and enters into a contract or becomes a leased\nemployee of an employer under contract with an employer participating in\none (1) of the systems administered by the Kentucky Retirement Systems or\nCounty Employees Retirement System:\n1. At any time following retirement, if the Authority determines the\nemployment arrangement does qualify as an independent contractor or\nleased employee, the member may continue to receive his or her\nretirement allowance during the period of the contract;\n2. Within one (1) month following the member's initial retirement date, if\nthe Authority determines the employment arrangement does not qualify\nas an independent contractor or leased employee, the member's\nretirement shall be voided i n accordance with paragraph (a) of this\nsubsection;\n3. After one (1) month but within twelve (12) months following the\nmember's initial retirement, if the Authority determines the employment\narrangement does not qualify as an independent contractor or leas ed\nemployee and that a prearranged agreement existed between the member\nand the agency for the member to return to work with the agency, the\nmember's retirement shall be voided in accordance with paragraph (a) of\nthis subsection;\n4. After a twelve (12) mon th period following the member's initial\nretirement, the member may continue to receive his or her retirement\nallowance during the period of the contract and the member shall not be\nrequired to notify the system or submit any documentation for purposes\nof this section to the system; and\n5. After twelve (12) months or more following the retired member's\nretirement date, the initiation of a contract or the initial date of the\nleased employment of a retired member by a participating agency shall\nnot constitute a prearranged agreement under this subsection; and\n(g) The Authority shall issue a final determination regarding a certification of the\nabsence of a prearranged agreement or the retired member's qualification as\nan independent contractor or leased employe e as required under this section\nno later than thirty (30) days after the retired member and participating\nemployer provide all required forms and additional information required by\nthe Authority.\n(18) The Authority shall promulgate administrative regulati ons to implement the\nrequirements of this section, including incorporating by reference board -prescribed\nforms that a retired member and participating agency shall provide the systems\nunder subsections (8), (9), and (17) of this section.","path":["KRS Chapter 61"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=54856","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:15Z","sha256":"d56f7bddf4d42f86daab9ccf5044a14b8f2caf3c96df918e096b8febb740e989","source_id":"us-ky","stale":false,"prev":"us-ky/krs-61.635","next":"us-ky/krs-61.640"},"notice":"GroundRules: Original legal text. Not legal advice."}