{"data":{"id":"us-ky/krs-67a.402","jurisdiction":"us-ky","citation":"KRS 67A.402","heading":"Employee purchase of service credit -- Payment procedures.","body":"(1) (a) Except as otherwise provided in paragraph (d) of this subsection, any member\nwhose participation date in the fund is prior to March 14, 2013, who has at\nleast five (5) years of total service credit as a member of the fund may\npurchase service credit, that is not otherwise purchasable, for up to a\nmaximum of four (4) years of service.\n(b) Except as otherwise provided in paragraph (d) of this subsection, any member\nwhose participation date in the fund is on or after March 14, 2013, who has at\nleast five (5) but no more than ten (10) years of membership service may,\nsubject to the limitations provided by this section, purchase periods of active\nmilitary duty service in the Armed Forces of the United States, not to exceed\nfour (4) years, that are not otherwise credited under KRS 67A.400(2)(c). The\nmember shall provide verification of the period of active military duty as\nprescribed by the board.\n(c) The member shall not be entitled to purchase any service credit under this\nsection for which he or she has been gi ven credit in another defined benefit\nretirement fund; however, the member may purchase government service\ncredit by transferring funds directly from another public defined benefit\nretirement plan if the member provides proof that he or she is not eligible for a\nretirement benefit from the other public defined benefit retirement fund.\n(d) Any provision of law to the contrary notwithstanding:\n1. No service credit purchase under this subsection shall be counted toward\nthe accrual of a health or other medical insurance retirement benefit in\nthis fund;\n2. No service purchased under this section by a member whose\nparticipation date in the fund is on or after March 14, 2013, shall be used\nto determine the member's eligibility to retire or to withdraw on a\ncertificate under KRS 67A.410(2) or (3)(b); and\n3. The amount of service a member can purchase under this section shall\nnot exceed the amounts specified by paragraphs (a) and (b) of this\nsubsection.\n(2) A member who purchases service credit shall file an applicati on with the board no\nlater than sixty (60) days prior to the anticipated service purchase payment date. The\nmember shall pay to the fund an amount which shall be determined by actuarial\nmethod consistent with the methods prescribed for determining the purc hase of\nprior service credit which shall be the principal.\n(3) Payment of the principal shall be made in a lump sum or payment of the principal\nand interest may be made by installments. Interest, at the annual rate of return on\ninvestments of the fund for the preceding year, shall be established by the\ncommissioner of finance on or before August 31 of each year and shall be based on\nfinancial statements of the fund for the year ending June 30, except that the interest\nshall not be less than three percent (3 %). Interest shall be added to the principal for\nthe time period for which installments are to be made.\n(4) If payments are made by installment, the cost of purchasing the service credit shall\nbe recalculated annually based upon the member's current salary , the interest rate\nestablished by the commissioner of finance, and other factors required by the\nactuarial method. The member's payments shall be adjusted annually to reflect the\nannual recalculation of the cost of purchasing service credit. Installment p ayments\nshall be consecutive and the total number of monthly installments shall not be less\nthan twelve (12) or more than two hundred forty (240). The member shall pay the\ninstallments by payroll deduction.\n(5) Payments shall not be picked up by the urban -county government. No employer\ncontribution shall be paid on the installments. The board shall determine how much\nof the total cost represents payment for one (1) quarter of the service to be\npurchased and the member shall receive service credit for one (1 ) quarter of the\nservice each time this amount is paid.\n(6) If the member dies, retires, or ceases to be a member of the fund before he or she\nhas made all installment payments for the purchase of service credit, the fund shall\nrefund to the member, his or her qualified surviving spouse, or his or her estate, the\nportion of any payment that does not represent a full quarter of service.\n(7) A member whose participation date in the fund is prior to March 14, 2013, who\ndoes not repay a refund of contributions, as provided in KRS 67A.500(3), shall be\nentitled to purchase service credit for prior membership service.\n(8) The member may cancel a purchase obligation at any time, but once canceled, a\nmember shall have forever forfeited, waived, and relinquished the right to purchase\nservice credit.","path":["KRS Chapter 67A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=41658","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:27Z","sha256":"87e48c1b5cb17dd6fbd76ede31ed648416ab903b1acd49ae963f634470aefc0e","source_id":"us-ky","stale":false,"prev":"us-ky/krs-67a.400","next":"us-ky/krs-67a.404"},"notice":"GroundRules: Original legal text. Not legal advice."}