KRS § 61.635 — KY Code / Title VIII / Chapter 61 / Section 61.635
61.635 Optional retirement plans
Status: in_force

61.635 Optional retirement plans.

(1) Each member shall have the right to elect to have his or her retirement allowance

payable under any one (1) of the options set forth in this section in lieu of the

retirement allowance otherwise payable to the member upon retirement under any

of the provisions of KRS 16.505 to 16.652, 61.510 to 61.705, and 78.510 to 78.852.

The amount of any optional retirement allowance shall be actuarially equivalent to

the amount of retirement allowance otherwise payable to the member.

(2) Survivorship one hundred percent (100%). The member may elect to receive a

decreased retirement allowance during his or her lifetime and have the retirement

allowance continued after the member's death to his or her beneficiary during the

lifetime of the person.

(3) Survivorship sixty-six and two-thirds percent (66-2/3%). The member may elect to

receive a decreased retirement allowance during his or her lifetime and have two-

thirds (2/3) of the retirement allowance continue after the member's death to his or

her beneficiary during the lifetime of the person.

(4) Survivorship fifty percent (50%). The member may elect to receive a decreased

retirement allowance during his or her lifetime and have one-half (1/2) of the

retirement allowance continued after the member's death to his or her beneficiary

during the lifetime of the person.

(5) Life with ten (10) years certain. The member less than age seventy-six (76) may

elect to receive a monthly retirement allowance during his or her lifetime which

shall guarantee payments for one hundred twenty (120) months. If the member dies

before receiving payments for one hundred twenty (120) months, the member's

beneficiary shall receive the remaining payments monthly, for the duration of the

one hundred twenty (120) months' period. However, if the trust is designated as

beneficiary, the trustee of the trust may elect to receive a lump-sum payment which

shall be the actuarial equivalent to the remaining payments, or the trustee may elect

to continue the remaining monthly payments to the trust of the member. If the estate

is designated as beneficiary, the estate shall receive a lump-sum payment which

shall be the actuarial equivalent to the remaining payments.

(6) Life with fifteen (15) years certain. The member less than age sixty-eight (68) may

elect to receive a monthly retirement allowance during his or her lifetime which

shall guarantee payments for one hundred eighty (180) months. If the member dies

before receiving payments for one hundred eighty (180) months, the member's

beneficiary shall receive the remaining payments monthly for the duration of the

one hundred eighty (180) months' period. However, if the trust is designated as

beneficiary, the trustee of the trust may elect to receive a lump-sum payment which

shall be the actuarial equivalent to the remaining payments, or the trustee may elect

to continue the remaining payments to the trust of the member. If the estate is

designated as beneficiary, the estate shall receive a lump-sum payment which shall

be the actuarial equivalent to the remaining payments.

(7) Life with twenty (20) years certain. The member less than age sixty-two (62) may

elect to receive a monthly retirement allowance during his or her lifetime which

shall guarantee payments for two hundred forty (240) months. If the member dies

before receiving payments for two hundred forty (240) months, the member's

beneficiary shall receive the remaining payments for the duration of the two

hundred forty (240) months period. However, if the trust is beneficiary, the trustee

of the trust may elect to receive a lump-sum payment which shall be the actuarial

equivalent to the remaining payments, or the trustee may elect to continue the

remaining payments to the trust of the member. If the estate is designated as

beneficiary, the estate shall receive a lump-sum payment which shall be the

actuarial equivalent to the remaining payments.

(8) Social Security adjustment options. These options shall be available to any member

who has not attained age sixty-two (62) as follows:

(a) No survivor rights. The member may elect to receive an increased retirement

allowance from his or her effective retirement date through the month he or

she attains age sixty-two (62) at which time his retirement allowance shall be

decreased for the remainder of his or her lifetime;

(b) Survivor rights. The member may elect to receive an increased retirement

allowance from his or her effective retirement date through the month he

attains age sixty-two (62) based on the option payable under subsection (2) of

this section, if the retirement allowance shall be decreased in the month

following the month he or she attains age sixty-two (62), or the month

following the month he or she would have attained age sixty-two (62), in

event of the member's death, and have the retirement allowance continue after

the member's death to his or her beneficiary during the lifetime of the person.

(9) Beneficiary Social Security adjustment option. This option is available to the

beneficiary of a deceased member if the beneficiary, who is a person, has not

attained age sixty (60), and is eligible to receive Social Security payments at age

sixty (60). The beneficiary may elect to receive during his or her lifetime an

increased retirement allowance based on his or her annual benefit payable for life.

The payment shall begin on his or her effective retirement date and continue

through the month he or she attains age sixty (60) at which time his or her

retirement allowance shall be decreased for the remainder of his or her lifetime.

(10) Pop-up option. The member may elect to receive a decreased retirement allowance

during his or her lifetime and have the retirement allowance continued after the

member's death to his or her beneficiary during the lifetime of the person. If the

beneficiary dies prior to the member, or if the beneficiary is the member's spouse

and they divorce, the member's retirement allowance shall increase to the amount

that would have been payable as a single life annuity.

(11) Actuarial equivalent refund. A member who began participating in the system prior

to January 1, 2014, may elect to receive a one (1) time lump-sum payment which

shall be the actuarial equivalent of the amount payable for a period of sixty (60)

months under KRS 61.595 (1).

(12) Partial lump-sum option.

(a) No survivor rights. A member may elect to receive a one-time lump-sum

payment equal to twelve (12), twenty-four (24), thirty-six (36), forty-eight

(48), or sixty (60) monthly retirement allowances payable under the

applicable retirement formula for the system and receive a reduced monthly

retirement allowance payable for his or her lifetime. The lump-sum payment

shall be paid in the month the first monthly retirement allowance is payable.

(b) Survivor rights. A member may elect to receive a one-time lump-sum

payment equal to twelve (12), twenty-four (24), thirty-six (36), forty-eight

(48), or sixty (60) monthly retirement allowances payable under subsection

(2) of this section and receive a reduced monthly retirement allowance

payable for his or her lifetime. The lump-sum payment shall be paid in the

month the first monthly retirement allowance is payable. The reduced

retirement allowance shall be continued after the member's death to his or her

beneficiary during the lifetime of the person.

(c) In order to explain the partial lump-sum option to members, the Authority

shall:

1. Provide, for all retirement estimates that include the partial lump-sum

option, including estimates calculated by a member using an automatic

estimator available on the Authority's website, the additional months of

service a member would have to be employed in order to recoup the

actuarial reduction in his or her monthly retirement allowance from

selecting a partial lump-sum option at each payment level; and

2. Prepare and make available to all members and participating employers

in the form of a paper or electronic pamphlet or booklet a summary of

the partial lump-sum option, written in a manner that can be understood

by the average member and sufficiently accurate and comprehensive to

reasonably apprise them of the benefits and potential consequences,

including federal tax consequences, of taking a partial lump-sum option.

(13) The other provisions of this section notwithstanding, the beneficiary of a retired

member of the General Assembly shall, after the member's death, receive sixty-six

and two-thirds percent (66-2/3%) of the member's retirement allowance during his

or her lifetime if the member of the General Assembly began participating in the

system prior to January 1, 2014, and has elected this option and has made

contributions in accordance with subsection (14) of this section and of KRS 61.560.

The retirement allowance of the retired member of the General Assembly shall not

be actuarially reduced to provide for this survivor benefit.

(14) A member of the General Assembly who began participating in the system prior to

January 1, 2014, who wishes to obtain the survivorship option specified in

subsection (13) of this section shall so notify the Kentucky Public Pensions

Authority:

(a) Within thirty (30) days after first becoming a member of the General

Assembly if he or she is not a member of the General Assembly on July 15,

1980; or

(b) Within thirty (30) days after July 15, 1980, if he or she is a member of the

General Assembly on July 15, 1980.

(15) The system shall forward to members of the General Assembly a form on which a

member who began participating in the system prior to January 1, 2014, may elect

the option provided for in subsections (13) and (14) of this section.

(16) The options described in subsections (2), (3), (4), (8)(b), (10), (12)(b), and (13) of

this section shall be extended to the member only if the designated beneficiary is a

person.