KRS § 78.5516 — KY Code / Title IX / Chapter 78 / Section 78.5516
78.5516 Hybrid cash balance plan for members in hazardous positions who began participating on or after January 1, 2014, and for members who make election under KRS 61.5955
Status: in_force

78.5516 Hybrid cash balance plan for members in hazardous positions who

began participating on or after January 1, 2014, and for members who

make election under KRS 61.5955.

(1) A member of the County Employees Retirement System in a hazardous

position covered by this section, who begins participating in the system on or

after January 1, 2014, or a member who makes an election pursuant to KRS

61.5955, shall receive the retirement benefits provided by this section in lieu of

the retirement benefits provided under KRS 78.5514. The retirement benefit

provided by this section shall be known as the hybrid cash balance plan and

shall operate as another benefit tier within the County Employees Retirement

System.

(2) The hybrid cash balance plan shall provide a retirement benefit based upon the

member's accumulated account balance, which shall include:

(a) Contributions made by the member as provided by KRS 78.510 to

78.852, except for employee contributions prescribed by KRS

78.5536(3)(b);

(b) An employer pay credit of seven and one-half percent (7.5) of the

creditable compensation earned by the employee for each month the

employee is contributing to the hybrid cash balance plan provided by this

section; and

(c) Interest credits added annually to the member's accumulated account

balance as provided by this section.

(3) (a) Member contributions and employer pay credits as provided by

subsection (2)(a) and (b) of this section shall be credited to the member's

account monthly as contributions are reported and posted to the system

in accordance with KRS 78.625.

(b) Interest credits, as provided by subsection (2)(c) of this section, shall be

credited to the member's account annually on June 30 of each fiscal year,

as determined by subsection (4) of this section.

(4) (a) On June 30 of each fiscal year, the system shall determine if the member

contributed to the hybrid cash balance plan or the Kentucky Retirement

Systems during the fiscal year.

(b) If the member contributed to the hybrid cash balance plan or the

Kentucky Retirement Systems during the fiscal year, the interest credit

added to the member's account for that fiscal year shall be determined by

multiplying the member's accumulated account balance on June 30 of the

preceding fiscal year by a percentage increase equal to:

1. Four percent (4); plus

2. Seventy-five percent (75) of the system's geometric average net

investment return in excess of a four percent (4) rate of return.

(c) If the member did not contribute to the hybrid cash balance plan or the

Kentucky Retirement Systems during the fiscal year, the interest credit

added to the member's account for that fiscal year shall be determined by

multiplying the member's accumulated account balance on June 30 of the

preceding fiscal year by four percent (4).

(d) For purposes of this subsection, "system's geometric average net

investment return":

1. Means the annual average geometric investment return, net of

administrative and investment fees and expenses, over the last five

(5) fiscal years as of the date the interest is credited to the member's

account; and

2. Shall be expressed as a percentage and based upon the system in

which the member has an account.

(e) No employer pay credits or interest credits shall be provided to a member

who has taken a refund of contributions as provided by KRS 61.625 or

who has retired and annuitized his or her accumulated account balance

as prescribed by this section.

(5) (a) Upon termination of employment, a member who has less than five (5)

years of service credited under KRS 16.543(1), 61.543(1), and 78.615(1),

who elects to take a refund of his or her accumulated account balance as

provided by KRS 61.625, shall forfeit the accumulated employer credit,

and shall only receive a refund of his or her accumulated contributions.

(b) Upon termination of employment, a member who has five (5) or more

years of service credited under KRS 16.543(1), 61.543(1), and 78.615(1),

who elects to take a refund of his or her accumulated account balance as

provided by KRS 61.625, shall receive a full refund of his or her

accumulated account balance.

(6) A member participating in the hybrid cash balance plan provided by this

section may retire:

(a) At his or her normal retirement date, provided he or she has earned five

(5) or more years of service credited under KRS 16.543(1), 61.543(1), or

78.615(1), or another state-administered retirement system; or

(b) At any age, provided he or she has earned twenty-five (25) or more years

of service credited under KRS 16.543(1), 61.543(1), or 78.615(1), or

another state-administered retirement system.

(7) A member eligible to retire under subsection (6) of this section may elect to:

(a) Receive a monthly retirement allowance payable for life by having his or

her accumulated account balance annuitized by the system in accordance

with the actuarial assumptions and actuarial methods adopted by the

board and in effect on the member's retirement date;

(b) Receive the actuarial equivalent of his or her retirement allowance

calculated under paragraph (a) of this subsection payable under one (1)

of the options set forth in KRS 61.635, except for the option provided by

KRS 61.635(11); or

(c) Take a refund of his or her account balance as provided by KRS 61.625.

(8) The provisions of this section shall not apply to members who began

participating in the Kentucky Employees Retirement System, County

Employees Retirement System, or the State Police Retirement System prior to

January 1, 2014, except as provided by KRS 61.5955.