KRS § 21.440 — KY Code / Title IV / Chapter 21 / Section 21.440
21.440 Duties of investment committee -- Duties of board -- Actuarial valuations, investigations, and analyses -- Audit
Status: in_force

21.440 Duties of investment committee -- Duties of board -- Actuarial valuations,

investigations, and analyses -- Audit.

(1) (a) The investment committee for the judicial retirement fund shall at least once

in every two (2) year period procure an actuarial valuation of the judicial

retirement fund. The valuation shall, at a minimum, include:

1. A description of the actuarial assumptions used in the actuarial

valuation, which shall be reasonably related to the experience of the

fund and represent the actuary's best estimate of anticipated experience;

2. A description of any funding methods utilized or required by state law in

the development of the actuarial valuation results;

3. A description of any changes in actuarial assumptions and methods from

the previous year's actuarial valuation;

4. The actuarially recommended contribution rate for employers for the

upcoming budget periods;

5. A thirty (30) year projection of the funding levels, unfunded liabilities,

and actuarially recommended contribution rates for employers based

upon the actuarial assumptions, funding methods, and experience of the

system as of the valuation date;

6. A sensitivity analysis that evaluates the impact of changes in plan

assumptions, including but not limited to the investment return

assumption, payroll growth assumption, and medical inflation

assumptions, on employer contribution rates, funding levels, and

unfunded liabilities; and

7. An actuarial investigation to be made of all of the economic experience

under the plans, including but not limited to the inflation rate and

investment return assumptions, relative to the economic assumptions

and funding methods previously adopted by the board. The actuarial

investigation shall include at a minimum a summary of the changes in

actuarial assumptions and funding methods recommended in the

investigation and the projected impact of the recommended changes on

funding levels, unfunded liabilities, and actuarially recommended

contribution rates for employers over a thirty (30) year period.

(b) At least once in each five (5) year period, the board of trustees of the Judicial

Form Retirement System shall cause an actuarial investigation to be made of

all the relevant demographic experience under the retirement plan, including

but not limited to mortality tables, withdrawal rates, and retirement rate

assumptions, relative to the demographic actuarial assumptions previously

adopted by the board. The actuarial investigation shall include at a minimum a

summary of the changes in actuarial assumptions recommended in the

investigation and the projected impact of the recommended changes on

funding levels, unfunded liabilities, and actuarially recommended contribution

rates for employers over a thirty (30) year period.

(c) Pursuant to the investigation, the board shall from time to time revise the

actuarial tables previously adopted by the board and shall thereupon revise the

bases of the rates of contributions required under KRS 21.345 to 21.580.

(d) For any change in actuarial assumptions, funding methods, retiree health

insurance premiums and subsidies, or any other decisions made by the board

that impact system liabilities and actuarially recommended contribution rates

for employers and that are not made in conjunction with the actuarial

investigations required by paragraphs (a)7. and (b) of this subsection, an

actuarial analysis shall be completed showing the projected impact of the

changes on funding levels, unfunded liabilities, and actuarially recommended

contribution rates for employers over a thirty (30) year period.

(e) A copy of the valuation, each actuarial investigation, and any analysis required

by this subsection shall be forwarded electronically to the Legislative

Research Commission within ten (10) days of receipt by the committee, and

the Legislative Research Commission shall distribute the information received

to the committee staff and co-chairs of any committee that has jurisdiction

over the Judicial Form Retirement System. The actuarial valuation required by

paragraph (a) of this subsection shall be submitted no later than November 15

following the close of the fiscal year.

(f) All the investigations and valuations shall be certified to the board by an

actuary who shall be a fellow of the Conference of Consulting Actuaries or a

member of the American Academy of Actuaries.

(2) (a) The board of trustees of the Judicial Form Retirement System shall annually

procure an audit of the system and each of the funds therein. The audit shall

be conducted in accordance with generally accepted auditing standards.

Except as provided by paragraph (b) of this subsection, the board may select

an independent certified public accountant or the Auditor of Public Accounts

to perform the audit. If the audit is performed by an independent certified

public accountant, the Auditor of Public Accounts shall not be required to

perform an audit pursuant to KRS 43.050(2)(a), but may perform an audit at

his discretion. The board shall make copies of the audit required by this

section available for examination by any member or beneficiary in the office

of the manager of the system and in such other places as may be necessary to

make the audit available to all members and beneficiaries. A copy of the audit

shall be sent to the Legislative Research Commission within ten (10) days of

receipt by the committee.

(b) Once every five (5) years, the Auditor of Public Accounts shall perform the

audit described by this subsection, and the system shall reimburse the Auditor

of Public Accounts for all costs of the audit. The Auditor of Public Accounts

shall determine which fiscal year during the five (5) year period the audit

prescribed by this paragraph will be completed.