KRS § 61.685 — KY Code / Title VIII / Chapter 61 / Section 61.685
61.685 Records -- Audits -- Authority's enforcement powers -- Limitation of liability -- Fraudulent claims to obtain benefits -- Investigation, enforcement, and penalties
Status: in_force

61.685 Records -- Audits -- Authority's enforcement powers -- Limitation of

liability -- Fraudulent claims to obtain benefits -- Investigation, enforcement,

and penalties.

(1) (a) Notwithstanding the provisions of KRS Chapter 413, upon discovery of any

error or omission in system records, the Authority shall correct all system

records, including but not limited to membership in the system, service credit,

member and employer contributions, and benefits paid or payable.

(b) The Authority may conduct audits to detect possible fraud, misrepresentation,

and change in circumstance, which may result in errors or omissions in the

system's records.

(c) The Authority, by its executive director or by representatives appointed in

writing by the executive director, may take testimony or depositions, and may

examine records, documents, or files of any person whose records,

documents, or files may furnish knowledge concerning any system records,

when the executive director or representative deems this reasonably necessary

for purposes incident to the performance of the system's functions.

(d) The Authority may enforce these powers by application to the Franklin

Circuit Court, which court may compel compliance with the orders of the

executive director or representatives appointed by the executive director.

(2) Neither the board nor any of its individual members shall be liable to any person for

any claim arising from the failure of any participating employer, or any employer

who should have been participating in any retirement system operated by the board,

to make retirement contributions on behalf of the person.

(3) (a) For purposes of this subsection:

1. "Knowingly" means, with respect to conduct or to a circumstance

described by this subsection, that a person is aware that his or her

conduct is of that nature or that the circumstance exists; and

2. "Person" means a natural person, individual, county, city, agency, board

or commission, sole proprietorship, partnership, corporation, limited

liability company, organization, association, business, trust, or other

legal entity. "Person" may be construed as singular or plural.

(b) A person shall be liable under this subsection if he or she knowingly:

1. Submits or causes to be submitted a false or fraudulent claim for the

payment or receipt of any benefit provided under KRS 16.505 to 16.652,

61.510 to 61.705, and 78.510 to 78.852;

2. Makes, uses, or causes to be made or used a false record or statement

material to a false or fraudulent claim to obtain benefits provided under

KRS 16.505 to 16.652, 61.510 to 61.705, and 78.510 to 78.852;

3. Possesses or otherwise has custody or control of money, records, or

property used or to be used by the Kentucky Public Pensions Authority

or the systems it administers and fails to deliver or delivers less than all

of the money, records, or property to which the authority or the

retirement systems it administers are entitled, including but not limited

to member agencies failing to report and remit employer and employee

contributions and employment records to the authority; or

4. Receives a retirement allowance or health insurance benefit to which he

or she is not entitled.

(c) A person found to have committed one (1) or more of the actions under

paragraph (b) of this subsection by a preponderance of the evidence in an

administrative process before the Authority or in an action before the Franklin

Circuit Court in conformity with all due process protections shall be liable for:

1. Restitution of any payments or other benefits received that the person

was not entitled to receive pursuant to KRS 16.505 to 16.652, 61.510 to

61.705, or 78.510 to 78.852 and interest at the maximum legal rate

pursuant to KRS 360.010 in effect on the date any payment was made

for the period from the date payment was made to the date of repayment

to the Authority;

2. A civil payment in an amount up to three (3) times the amount of the

excess payments;

3. A civil payment of five hundred dollars ($500) for each false or

fraudulent claim submitted for the payment of benefits under KRS

16.505 to 16.652, 61.510 to 61.705, and 78.510 to 78.852; and

4. Legal fees and costs of investigation and enforcement of civil remedies,

including all attorneys' fees and costs of litigation.

(d) Upon the written request of the authority, the Attorney General shall

investigate and file the necessary actions to enforce civil penalties for

violations of this subsection and, if funds are recovered by or on behalf of the

authority in any legal action, may recover reasonable costs of litigation as

determined by the court as provided by KRS 48.005.

(e) Civil payments, interest, and costs of investigation and enforcement of civil

remedies, including attorneys' fees and other costs not included under

paragraph (d) of this subsection, recovered on behalf of the authority under

this subsection shall be made payable to the State Treasurer and remitted to

the Kentucky Public Pensions Authority for deposit in the affected trusts

administered by the Kentucky Public Pension Authority. The affected trusts

shall be made whole, and any additional penalties and fees shall be distributed

to the trusts as a whole consistent with the methods used to distribute

administrative expenses between the trusts.

(f) The remedies under this section are separate from and cumulative to any other

administrative, civil, or criminal remedies available to the authority and the

systems it administers under federal or state law or regulation.