KRS § 161.620 — KY Code / Title XIII / Chapter 161 / Section 161.620
161.620 Retirement allowances for university and nonuniversity retirees -- Amount -- Increases -- Payments for adult dependents
Status: in_force

161.620 Retirement allowances for university and nonuniversity retirees -- Amount

-- Increases -- Payments for adult dependents.

(1) The retirement allowance, in the form of a life annuity with refundable balance, of a

member retiring for service shall be calculated as follows:

(a) For retirements effective July 1, 1998, and thereafter, except as otherwise

provided by this section, the annual allowance for each year of service shall be

two percent (2%) of the final average salary for service performed prior to

July 1, 1983, and two and one-half percent (2.5%) of the final average salary

for service performed after July 1, 1983, for all nonuniversity members.

Except as otherwise provided by this section, the annual retirement allowance

for each year of service performed by members of the Teachers' Retirement

System who are university members shall be two percent (2%) of the final

average salary. Actuarial discounts due to age or service credit at retirement

may be applied as provided in this section;

(b) For individuals who become nonuniversity members of the Teachers'

Retirement System on or after July 1, 2002, and before July 1, 2008, who

upon retirement have earned less than ten (10) full years of service credit, the

retirement allowance shall be two percent (2%) of the member's final average

salary for each year of service. For individuals who become nonuniversity

members of the Teachers' Retirement System on or after July 1, 2002, and

before July 1, 2008, and who upon retirement have earned at least ten (10) full

years of service credit, the annual allowance for each year of service shall be

two and one-half percent (2.5%) of the member's final average salary;

(c) The board of trustees may approve for members who initially retire on or after

July 1, 2004, and who become nonuniversity members before July 1, 2008, a

retirement allowance of three percent (3%) of the member's final average

salary for each year or partial year of service credit earned in excess of thirty

(30) years. This three percent (3%) factor shall be in lieu of the two and one-

half percent (2.5%) factor provided for in paragraph (b) of this subsection for

every year or fraction of a year of service in excess of thirty (30) years. Upon

approval of this three percent (3%) retirement factor, the board of trustees may

establish conditions of eligibility regarding the type of service credit that will

qualify for meeting the requirements of this subsection. This subsection is

optional with the board of trustees and shall not be subject to KRS 161.714;

(d) For individuals who become nonuniversity members of the Teachers'

Retirement System on or after July 1, 2008, but prior to January 1, 2022, the

retirement allowance shall be:

1. a. One and seven-tenths percent (1.7%) of the member's final average

salary for each year of service if the member has earned ten (10) or

less years of service at retirement;

b. Two percent (2%) of the member's final average salary for each

year of service if the member has earned greater than ten (10) but

no more than twenty (20) years of service at retirement;

c. Two and three-tenths percent (2.3%) of the member's final average

salary for each year of service if the member has earned greater

than twenty (20) but no more than twenty-six (26) years of service

at retirement; or

d. Two and one-half percent (2.5%) of the member's final average

salary for each year of service if the member has earned greater

than twenty-six (26) but no more than thirty (30) years of service at

retirement; and

2. Three percent (3%) of the member's final average salary for each year or

partial year of service earned in excess of thirty (30) years of service at

retirement subject to the same terms and conditions as set forth in

paragraph (c) of this subsection;

(e) For individuals who become university members of the Teachers' Retirement

System on or after July 1, 2008, but prior to January 1, 2022, the retirement

allowance shall be:

1. One and one-half percent (1.5%) of the member's final average salary for

each year of service if the member has earned ten (10) or less years of

service at retirement;

2. One and seven-tenths percent (1.7%) of the member's final average

salary for each year of service if the member has earned greater than ten

(10) but no more than twenty (20) years of service at retirement;

3. One and eighty-five hundredths percent (1.85%) of the member's final

average salary for each year of service if the member has earned greater

than twenty (20) but less than twenty-seven (27) years of service at

retirement; or

4. Two percent (2%) of the member's final average salary for each year of

service if the member has earned twenty-seven (27) or more years of

service at retirement;

(f) For individuals who become nonuniversity members of the Teachers'

Retirement System on or after January 1, 2022, the retirement allowance shall,

except as adjusted by the board pursuant to KRS 161.633, be the following

percentage of the member's final average salary for each year of service:

1. One and seven-tenths percent (1.7%), which shall be increased

incrementally each month the member's age at retirement is greater than

sixty (60) so that the incremental increase is four one-hundredths of one

percent (0.04%) for each complete additional year of age at retirement in

excess of sixty (60), not to exceed a value of one and nine-tenths percent

(1.9%) at age sixty-five (65) or greater; plus

2. a. One-quarter of one percent (0.25%), if the member has earned at

least twenty (20) but less than thirty (30) years of service at

retirement; or

b. One-half of one percent (0.50%), if the member has earned thirty

(30) or more years of service at retirement;

(g) For individuals who become university members of the Teachers' Retirement

System on or after January 1, 2022, the retirement allowance shall, except as

adjusted by the board pursuant to KRS 161.634, be the following percentage

of the member's final average salary for each year of service:

1. Seven-tenths of one percent (0.7%), which shall be increased

incrementally each month the member's age at retirement is greater than

sixty (60) so that the incremental increase is four one-hundredths of one

percent (0.04%) for each complete additional year of age in excess of

sixty (60), not to exceed a value of nine-tenths of one percent (0.9%) at

age sixty-five (65) or greater; plus

2. a. One-quarter of one percent (0.25%), if the member has earned at

least twenty (20) but less than thirty (30) years of service at

retirement; or

b. One-half of one percent (0.50%), if the member has earned thirty

(30) or more years of service at retirement; and

(h) The retirement allowance of a member at retirement, as measured on a life

annuity, shall not exceed the member's last yearly salary or the member's final

average salary, whichever is the greater amount. For purposes of this section,

"yearly salary" means the compensation earned by a member during the most

recent period of contributing service, either consecutive or nonconsecutive,

preceding the member's effective retirement date and shall be subject to the

provisions of KRS 161.220(9) and (10). This paragraph shall not apply to the

supplemental benefit component.

(2) Effective July 1, 2002, and annually on July 1 thereafter, the retirement allowance

of each retired member and of each beneficiary of a retirement option shall be

increased in the amount of one and one-half percent (1.5%), provided the retired

member had been retired for at least the full twelve (12) months immediately

preceding the date that the increase is effective. In the event that the retired member

had been retired for less than the full twelve (12) months immediately preceding the

date that the increase is effective, then the increase shall be reduced on a pro rata

basis by each month that the retired member had not been retired for the full twelve

(12) months immediately preceding the effective date of the increase. This

subsection shall not apply to benefits from the supplemental benefit component, and

the board may adjust this value for individuals who become members on or after

January 1, 2022, as provided by KRS 161.633 or 161.634, as applicable.

(3) Any member qualifying for retirement under a life annuity with refundable balance

shall be entitled to receive an annual allowance amounting to not less than four

hundred dollars ($400) effective July 1, 2002, and not less than four hundred forty

dollars ($440) effective July 1, 2003, multiplied by the service credit years of the

member. These minimums shall apply to the retired members receiving annuity

payments and to those members retiring on or subsequent to the effective dates

listed in this subsection, except the following:

(a) Individuals who become members of the Teachers' Retirement System on or

after July 1, 2008; or

(b) Members whose retirement allowance payment is reduced below the

minimum allowance as a result of its division in a qualified domestic relations

order or any other provision permitted under KRS 161.700.

(4) The minimum retirement allowance provided in this section shall apply in the case

of members retired or retiring under an option other than a life annuity with

refundable balance in the same proportion to the benefits of the member and his or

her beneficiary or beneficiaries as provided in the duly-adopted option tables at the

time of the member's retirement.

(5) Effective July 1, 2008, the monthly allowance of each retired member and each

recipient of a retirement option of the retired member may be increased in an

amount not to exceed three and one-half percent (3.5%) of the monthly allowance in

effect the previous month, provided the retired member had been retired for at least

the full twelve (12) months immediately preceding the date that the increase is

effective. In the event that the retired member had been retired for less than the full

twelve (12) months immediately preceding the date that the increase is effective,

then the increase shall be reduced on a pro rata basis by each month that the retired

member had not been retired for the full twelve (12) months immediately preceding

the effective date of the increase. The level of increase provided for in this

subsection shall be determined by the funding provided in the 2008-2010 biennium

budget appropriation.

(6) Effective July 1, 2009, the monthly allowance of each retired member and each

recipient of a retirement option of the retired member may be increased in an

amount not to exceed seven-tenths of one percent (0.7%) of the monthly allowance

in effect the previous month, provided the retired member had been retired for at

least the full twelve (12) months immediately preceding the date that the increase is

effective. In the event that the retired member had been retired for less than the full

twelve (12) months immediately preceding the date that the increase is effective,

then the increase shall be reduced on a pro rata basis by each month that the retired

member had not been retired for the full twelve (12) months immediately preceding

the effective date of the increase. The level of increase provided for in this

subsection shall be determined by the funding provided in the 2008-2010 biennium

budget appropriation.

(7) Effective July 1, 1990, monthly payments of two hundred dollars ($200) shall be

payable for the benefit of an adult child of a member retired for service when the

child's mental or physical condition is sufficient to cause dependency on the

member at the time of retirement. Eligibility for this payment shall continue for the

life of the child or until the time the mental or physical condition creating the

dependency no longer exists or the child marries. Benefits under this subsection

shall apply to legally adopted survivors provided the proceedings for the adoption

were initiated at least one (1) year prior to the death of the member. The board of

trustees shall be the sole judge of eligibility or dependency and may require formal

application or information relating thereto.

(8) Members of the Teachers' Retirement System shall be subject to the annuity income

limitations imposed by Section 415 of the Internal Revenue Service Code.

(9) Compensation in excess of the limitations imposed by Section 401(a)(17) of the

Internal Revenue Code shall not be used in determining a member's retirement

annuity. The limitation on compensation for eligible members shall not be less than

the amount which was allowed to be taken into account by the retirement system in

effect on July 1, 1993. For this purpose, an eligible member is an individual who

was a member of the retirement system before the first plan year beginning after

December 31, 1995.