{"data":{"id":"us-ky/krs-78.635","jurisdiction":"us-ky","citation":"KRS 78.635","heading":"Employer's annual contribution to system -- Computation -- Limitation","body":"on  annual increase of employer contribution rate -- Notification of rate\nchange.\n(1) (a) Except as provided by subsection (4) of this section, each employer\nparticipating in the County Employees Retirement System as provided for\nin KRS  78.510 to 78.852 shall contribute annually to the system an\namount  determined by the actuarial valuation completed in accordance\nwith KRS  78.784 and as specified by this section. Employer contributions\nfor the system shall be equal to the sum of the \"normal cost contribution\"\nand the \"actuarially accrued liability contribution.\"\n(b) For  purposes of this section, the normal cost contribution shall be\ncomputed  as a percentage of pay and shall be an annual amount that is\nsufficient when  combined with employee contributions to fund benefits\nearned during the year in the system. The amount shall be:\n1. Paid as a percentage of creditable compensation reported for each\nemployee participating in the system and accruing benefits; and\n2. The same percentage of pay for all employees who are participating\nin the system, except that separate percentage rates shall be\ndeveloped in each system for those employers whose employees\nare participating in hazardous duty retirement coverage as provided\nby KRS 78.5520.\n(c) For purposes of this section, the actuarially accrued liability contribution\nshall be:\n1. Computed  by amortizing the total unfunded actuarially accrued\nliability of the system over a closed period of thirty (30) years\nbeginning with the 2019  actuarial valuation using the level\npercentage of payroll amortization method, except that any increase\nor decrease in the unfunded actuarially accrued liability occurring\nafter the completion of the 2019  actuarial valuation shall be\namortized over a closed period of twenty (20) years beginning with\nthe actuarial valuation in which the increase or decrease in the\nunfunded actuarially accrued liability is recognized. An increase or\ndecrease in the unfunded actuarially accrued liability may  result\nfrom, but not be limited to, legislative changes to benefits, changes\nin actuarial methods or assumptions, or actuarial gains or losses;\n2. Paid as a percentage of payroll on the creditable compensation\nreported for each employee participating in the system and accruing\nbenefits; and\n3. The same percentage of pay for all employees who are participating\nin the system, except that separate percentage rates shall be\ndeveloped in each system for those employers whose employees\nare participating in hazardous duty retirement coverage as provided\nby KRS 78.5520.\n(d) The  employer contributions computed  under this section shall be\ndetermined using:\n1. The entry age normal cost funding method;\n2. An  asset smoothing method that smooths investment gains and\nlosses over a five (5) year period; and\n3. Other funding methods and assumptions established by the board in\naccordance with KRS 78.784.\n(2) Normal contribution and the actuarially accrued liability contribution rates shall\nbe determined by the board on the basis of the annual actuarial valuation last\npreceding the July 1 of a new fiscal year.\n(3) Employer  contribution rates as provided by this section shall include an\nemployer  contribution rate to fund pension benefits and  an  employer\ncontribution rate to fund retiree health benefits.\n(4) The  employer contribution rate established by the board for the County\nEmployees  Retirement System that is payable on or after July 1, 2018, and\nuntil June 30, 2028, for the pension and retiree health insurance funds,\nincluding the normal cost contribution and the actuarially accrued liability\ncontribution for each fund, shall not increase by more than a factor of one and\ntwelve one hundredths (1.12) over the prior fiscal year's employer contribution\nrate as determined by the system's consulting actuary.\n(5) The  system shall advise each employer prior to the beginning of each fiscal\nyear of any change in the employer contribution rate. Based on the employer\ncontribution rate, each employer shall include in the budget sufficient funds to\npay the employer contributions as determined by the board under this section.","path":["KRS Chapter 78"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=50798","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:39Z","sha256":"4b948a7f3c5c07aaf1aa6bd2e1b1501e26159381d94da8143574dd3b3bb7e5cf","source_id":"us-ky","stale":false,"prev":"us-ky/krs-78.630","next":"us-ky/krs-78.640"},"notice":"GroundRules: Original legal text. Not legal advice."}