{"data":{"id":"us-ky/krs-95.290","jurisdiction":"us-ky","citation":"KRS 95.290","heading":"Pension system for police and fire divisions -- Governing bodies -- Repeal of","body":"ordinances establishing pension fund -- Liquidation and distribution of\nresidual assets -- Report -- Distribution of funds -- Administration expenses --\nEqual protection  for beneficiaries -- Participation by policemen and\nfirefighters in County Employees Retirement System -- Contributions.\n(Effective April 1, 2021)\n(1) The city legislative body in cities of the first class may enact ordinances providing\nfor a system of p ensions for retired and disabled members of the police and fire\ndivisions of the department of public safety and their dependents, may appropriate\nfunds for the purpose of paying such pensions, may allot and pay to the policemen's\npension fund or the firefighters' pension fund or either or both of them, all fines and\nforfeitures imposed upon members of the respective divisions, and may provide for,\nassess, and collect contributions from the members for the benefit of the fund.\n(2) (a) There shall be a gover ning body of the policemen's pension fund, and a\ngoverning body of the firefighters' pension fund. The governing bodies of the\nrespective funds shall hold title to all assets in their respective funds, and shall\nhave exclusive authority relating to investm ent of the assets of the funds,\nincluding contracting with investment advisors or managers to perform\ninvestment services as deemed necessary and prudent by the board. A majority\nof the governing body of each fund shall be composed of persons receiving\npension benefits from the respective pension systems, and no more than one\n(1) member of the city legislative body may be a member of the governing\nbody of either the policemen's or the firefighters' pension fund, except if there\nare fewer than six (6) active  and retired members of the policemen's or the\nfirefighters' pension fund, the governing body of the pension fund shall be\ncomposed of the mayor, city treasurer or chief financial officer, and two (2)\nemployees appointed by the mayor from the city's respec tive police\ndepartment or fire department. To be effective, an action of the governing\nbody of a fund shall require only a simple majority of the votes cast at a\nproperly convened meeting of the governing body where a quorum is present,\nwith a quorum being a majority of the members of a governing body.\n(b) If there are fewer than twelve (12) active and retired members or beneficiaries\nof the policemen's or the firefighters' pension fund, the governing body of the\nfund may elect to offer to individuals entit led to benefits from the fund a one\n(1) time irrevocable option to convert monthly pension benefits from the fund\nto monthly annuity benefits from an insurance company for the same amount.\nAn insurance company accepting a benefit transfer shall honor any f eatures\nand options available under the existing plan. If the governing body of the\nfund elects to offer the option to convert monthly pension benefits to monthly\nannuity benefits, it shall provide to individuals entitled to benefits from the\nfund sufficiently complete and appropriate disclosures to assist in making an\ninformed decision.\n(c) If all liabilities to all individuals entitled to benefits from the policemen's\npension fund or firefighters' pension fund have been satisfied, the ordinances\nestablishing the fund may be repealed by the majority vote of the duly elected\nmembers of the entire legislative body. If repealed, the governing body of the\npolicemen's or firefighters' pension fund shall, within sixty (60) days of repeal,\nproceed with the liquida tion of any residual assets of the fund. All residual\nassets liquidated pursuant to this paragraph shall be distributed by the\ngoverning body to the city's general fund provided the return of assets\ncomplies with federal and state law governing the distrib ution of assets.\nWithin thirty (30) days following the distribution of residual assets, the\ngoverning body of the fund shall as its last act file a complete report with the\nlegislative body of the city, for retention by the city clerk the same as for other\ncity records, of the actions taken to dissolve the fund and liquidate residual\nassets of the fund.\n(3) Any policemen's pension fund or any firefighters' pension fund established under\nthe provisions of this section shall be held or distributed for, and only for, any of the\nfollowing purposes of the respective fund as applicable:\n(a) Paying pensions, and any bonus payments under applicable ordinances;\n(b) Making payments to the city for transfer to the County Employees Retirement\nSystem for alternate participation pursuant to KRS 78.530(3)(a) and 78.531(2)\nor for the distribution of residual assets in the event the fund is dissolved\npursuant to subsection (2)(c) of this section;\n(c) Making payments to the city for transfer to an insurance company for\nconversion of monthly pension benefits to monthly annuity benefits as\nprovided in subsection (2)(b) of this section;\n(d) Transferring pension assets through investment contract or other financial\ninstrument for the purpose of amortizing unfunded service liabilities; and\n(e) Payment from the city to the County Employees Retirement System for future\npension contributions required pursuant to KRS 61.702 and 78.635.\nPursuant to the terms of this section, if policemen of the city of the first class elect\nentry into th e County Employees Retirement System and thereby create excess\nfunds over those required to provide for the purposes set forth in paragraphs (a), (b),\n(c), (d), and (e) of this subsection, these excess funds shall be distributed to the city\nfor use by the city for any other purpose it may elect, including but not limited to\nthe establishment of a reserve for payment under paragraph (e) of this subsection.\nThe governing board of the fund may annually expend for the necessary expenses\nconnected with the fund,  including but not limited to expenses for medical,\nactuarial, accounting, and legal services, the amount such governing board deems\nproper.\n(f) Payment from the city to the County Employees Retirement System for future\npension contributions required pursu ant to KRS 61.702 and 78.635. Pursuant\nto the terms of this section, if firefighters of the city of the first class elect\nentry into the County Employees Retirement System and thereby create excess\nfunds over those required to provide for the purposes set forth in paragraphs\n(a), (b), (c), (d), and (e) of this subsection, these excess funds shall be\ndistributed according to the terms of an agreement negotiated between the city\nand the union organization representing the firefighters. The city may use its\nshare of the distributed excess funds for any purpose it may elect, including\nbut not limited to the establishment of a reserve for payment under paragraph\n(f) of this subsection.\n(4) (a) The governing body of each pensio n fund shall ensure that all of the assets in\nthe fund are distributed for the purposes in subsection (3) of this section, and\nonly for these purposes. If in any calendar year the assets in either fund exceed\nthose needed for the actuarial liability for payment of pension benefits and any\nanticipated liabilities under subsection (3)(b) and (d) of this section, the\nlegislative body of the city establishing the pension system shall ensure by\npension bonus ordinance that a portion of these excess funds be dist ributed in\nan equitable manner to all eligible pension recipients. Nothing in this\nsubsection shall be construed to require any change to be made to any pension\nordinance as it exists on July 15, 1998.\n(b) The governing board of either fund may annually ex pend for the necessary\nexpenses connected with the fund, including but not limited to expenses for\nmedical, actuarial, accounting, and legal or other professional services, the\namount such governing board deems proper.\n(5) Any ordinance establishing a pens ion fund under this section shall make equitable\nprovision for the rights of persons having an interest in assets transferred to the fund\nfrom any fund heretofore established by statute.\n(6) To assure equal protection for the beneficiaries of either fund, any action taken by\nthe city executive or legislative body in cities of the first class that affects a\npolicemen's pension fund or a firefighters' pension fund established under this\nsection shall, to the maximum extent permitted by law, treat each fund in  a uniform\nmanner and shall not cause any change to be made to the structure or operation of\neither fund, whether through legislation, litigation, compromise, settlement, or\notherwise, unless any proposed change is offered to the other fund before it takes\neffect. Nothing in this subsection shall be construed to require any change to be\nmade to any pension ordinance as it exists on July 15, 1998.\n(7) The legislative body in a city of the first class shall issue the appropriate order,\npursuant to KRS 78.530( 1), directing participation for policemen in the County\nEmployees Retirement System. All new employees who would have been granted\nmembership in the local policemen's pension system shall be members of the\nCounty Employees Retirement System. All active members of the local policemen's\npension system at the time of transition to the County Employees Retirement\nSystem may choose membership in the County Employees Retirement System or\nmay retain membership in the local system. The city shall elect the alternat e\nparticipation plan, pursuant to KRS 78.530(3), for policemen who transfer to the\nCounty Employees Retirement System. Notwithstanding the provisions of KRS\n78.530(3)(b), the city may, at its option, extend the payment period for the cost of\nalternate participation to a maximum of twenty (20) years with the interest at the\nrate actuarially assumed by the board. The city shall have the right to use assets in\nthe local pension fund, other than assets necessary to pay benefits to the remaining\nactive members o f the local policemen's pension system and to retirees and their\nsurvivors as determined by actuarial valuation, to assist in the payment of the\nannual installment cost of alternate participation. All policemen who become\nmembers of the County Employees Retirement System pursuant to this section shall\nbe granted hazardous duty coverage, and the city may, at its option, purchase\naccumulated sick leave for each policeman upon retirement pursuant to KRS\n78.616.\n(8) The legislative body in a city of the first c lass may issue the appropriate order,\npursuant to KRS 78.530(1), directing participation for firefighters in the County\nEmployees Retirement System. In the event that the legislative body in a city of the\nfirst class issues such an order, then all new empl oyees who would have been\ngranted membership in the local firefighters' pension system shall be members of\nthe County Employees Retirement System. All active members of the local\nfirefighters' pension system at the time of transition to the County Employee s\nRetirement System may choose membership in the County Employees Retirement\nSystem or may retain membership in the local system. The city shall elect the\nalternate participation plan, pursuant to KRS 78.530(3), for firefighters who transfer\nto the County Employees Retirement System. Notwithstanding the provisions of\nKRS 78.530(3)(b), the city may, at its option, extend the payment period for the cost\nof alternate participation to a maximum of twenty (20) years with the interest at the\nrate actuarially assumed by the board. The city shall have the right to use assets in\nthe local firefighters' pension fund, other than assets necessary to pay benefits to the\nremaining active members of the local firefighters' pension system and to retirees\nand their survivors as determined by actuarial valuation, to assist in the payment of\nthe annual installment cost of alternate participation. After certification by the\nCounty Employees Retirement System of eligibility for hazardous duty coverage,\neach firefighter who become s a member of the County Employees Retirement\nSystem pursuant to this section shall be granted hazardous duty coverage.\n(9) Notwithstanding the provisions of KRS 61.702 and 78.635, which relate to the\ncontributions required of participating employers, any city of the first class\nparticipating in the County Employees Retirement System hazardous duty pension\nplan which has in effect a collective bargaining agreement with a group of\nemployees who participate in said plan, shall have the right to enter into agr eement\nwith its employees or with their respective collective bargaining representatives.\nThis agreement may include but is not limited to specifications of what portion of\nthe required employer contribution shall be borne by the participating employer and\nwhat portion shall be borne by the participating employee. This provision in no way\nmodifies the employer's obligation to remit the contributions required by the County\nEmployees Retirement System pursuant to KRS 61.702 and 78.635, whether such\ncontributions are borne by the city or by its participating employees.\n(10) With regard to the employer participation or employer contributions pursuant to\nKRS 61.702 and 78.635 as it relates to future pension contribution requirements or\nas it relates to payback pe riod or interest charge for service liability cost under\nalternate participation, if any statute or any resolution of the appropriate state board\nof trustees having authority over employer participation or employer contribution\ngrants any terms or conditio ns to any city of the home rule class, or to any county,\nor to any urban -county government, which are more favorable in terms of\nparticipation than terms or conditions granted to any city of the first class, then said\nprovisions for employer participation or contribution shall be available to the city of\nthe first class, at its option and effective upon adoption by the city of the first class\nand notification to the County Employees Retirement System.","path":["KRS Chapter 95"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=50570","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:54Z","sha256":"675e2e834e59095198a68765d47aaac00b22433376ece9db64ca7a37cd7b9a87","source_id":"us-ky","stale":false,"prev":"us-ky/krs-95.280","next":"us-ky/krs-95.300"},"notice":"GroundRules: Original legal text. Not legal advice."}