KRS § 161.605 — KY Code / Title XIII / Chapter 161 / Section 161.605
161.605 Resumption of employment by retired member -- Continuation of retirement allowance -- Individuals who retire and are reemployed -- Part-time, substitute teaching, and nonteaching employment -- Health insurance coverage
Status: in_force

161.605 Resumption of employment by retired member -- Continuation of

retirement allowance -- Individuals who retire and are reemployed -- Part-

time, substitute teaching, and nonteaching employment -- Health insurance

coverage.

Any member retired by reason of service may return to work in a position covered by the

Kentucky Teachers' Retirement System and continue to receive his or her retirement

allowance under the following conditions:

(1) Any member who is retired with thirty (30) or more years of service may return to

work in a full-time or a part-time position, or in a position providing substitute

teaching service, covered by the Teachers' Retirement System and earn up to a

maximum of seventy-five percent (75%) of the member's last annual compensation

measured on a daily rate to be determined by the board of trustees. For purposes of

determining whether the salary of a member returning to work is seventy-five

percent (75%) or less of the member's last annual compensation, all remuneration

paid and benefits provided to the member, on an actual dollar or fair market value

basis as determined by the retirement system, excluding employer-provided medical

insurance required under subsection (4) of this section, shall be considered.

Members who were retired on or before June 30, 2002, shall be entitled to return to

work under the provisions of this section as if they had retired with thirty (30) years

of service. Nonqualified service credit purchased under the provisions of KRS

161.5465 or elsewhere with any state-administered retirement system shall not be

used to meet the thirty (30) year requirement set forth in this subsection. Out-of

state teaching service provided in public schools for kindergarten through grade

twelve (12) may count toward the thirty (30) year requirement set forth in this

subsection even if it is not purchased as service credit, if the member obtains from

his or her out-of-state employer certification of this service on forms prescribed by

the retirement system;

(2) Any member who is retired with less than thirty (30) years of service after June 30,

2002, may return to work in a full-time or part-time position, or in a position

providing substitute teaching service, covered by the Teachers' Retirement System

and earn up to a maximum of sixty-five percent (65%) of the member's last annual

compensation measured on a daily rate to be determined by the board of trustees.

For purposes of determining whether the salary of a member returning to work is

sixty-five percent (65%) or less of the member's last annual compensation, all

remuneration paid and benefits provided to the member, on an actual dollar or fair

market value basis as determined by the retirement system, excluding employer-

provided medical insurance required under subsection (4) of this section, shall be

considered;

(3) Under this section, an employer may employ full-time a number of retired members

not to exceed ten percent (10%) of the membership actively employed full-time by

that employer. The board of trustees may reduce this ten percent (10%) cap upon

recommendation of the retirement system's actuary if a reduction is necessary to

maintain the actuarial soundness of the retirement system. The board of trustees

may increase the ten percent (10%) cap upon a determination that an increase is

warranted to help address a shortage in the number of available teachers and upon

the determination of the retirement system's actuary that the proposed cap increase

allows the actuarial soundness of the retirement system to be maintained. For

purposes of this subsection, "full-time" means the same as defined by KRS

161.220(21). A local school district may exceed the quota established by this

subsection by making an annual written request to the Kentucky Department of

Education which the department may approve on a year-by-year basis;

(4) (a) Except as provided by subsection (9) of this section, a member returning to

work in a full-time or part-time position, or in a position providing substitute

teaching service, under subsection (1) or (2) of this section shall contribute to

an account with the retirement system that shall be administered

independently from and with no reciprocal impact with the member's original

retirement account, or any other account from which the member is eligible to

draw a retirement allowance.

(b) Except as provided by subsection (9) of this section, a member returning to

work under subsection (1) or (2) of this section shall make contributions to the

retirement system at the rate provided under KRS 161.540. The new account

shall independently meet all vesting requirements as well as all other

conditions set forth in KRS 161.600(1) or (2), as applicable, before any

retirement allowance is payable from this account. The retirement allowance

accruing under this new account shall be calculated pursuant to KRS 161.620.

This new account shall not entitle the member to a duplication of the benefits

offered under KRS 161.620(7) or 161.675, nor shall this new account provide

the benefits offered by KRS 161.520, 161.525, 161.620(3), 161.655, 161.661,

or 161.663.

(c) A member returning to work under subsection (1) or (2) of this section shall

waive his or her medical insurance with the Teachers' Retirement System

during the period of reemployment and shall receive the medical insurance

coverage that is generally provided by the member's active employer to the

other members of the retirement system that the active employer employs. If

medical insurance coverage is not available from the employer, the Kentucky

Teachers' Retirement System may provide coverage for the member.

(d) A member returning to work under subsection (1) or (2) of this section shall

not be eligible to purchase service credit for any service provided after the

member's effective date of retirement but prior to the date that the member

returns to work. A member returning to work under subsection (1) or (2) of

this section shall not be eligible to purchase service credit that the member

would have otherwise been eligible to purchase prior to the member's initial

retirement.

(e) A member who returns to work under subsection (1) or (2) of this section, or

in the event of the death of the member, the member's estate or applicably

designated beneficiary, shall be entitled, within ninety (90) days of the posting

of the annual report submitted by the employer, to a refund of contributions as

permitted and limited by KRS 161.470;

(5) The board of trustees may annually, on July 1, adjust the current daily rate of a

member's last annual compensation, for each full twelve (12) month period that has

elapsed subsequent to the member earning his or her last annual compensation, by

the percentage increase in the annual average of the consumer price index for all

urban consumers for the calendar year preceding the adjustment as published by the

Federal Bureau of Labor Statistics, not to exceed five percent (5%) annually. Each

annual adjustment shall become part of the member's daily rate base. Failure to

comply with the salary limitations set forth in subsections (1) and (2) of this section

as may be adjusted by this subsection shall result in a reduction of the member's

retirement allowance or any other benefit to which the member would otherwise be

entitled on a dollar-for-dollar basis for each dollar that the member exceeds these

salary limitations, and the member shall be refunded his or her retirement

contributions made on the compensation that exceeds these salary limitations.

Notwithstanding any other provision of law to the contrary, a member retiring from

a local school district who returns to work for a local school district under

subsection (1) or (2) of this section shall be entitled, without any reduction to his or

her retirement allowance or any other retirement benefit, to earn a minimum

amount equal to one hundred seventy dollars ($170) per day;

(6) (a) A retired member returning to work under subsection (1) or (2) of this section

shall have separated from service for a period of at least one (1) year if

returning to work for the same employer on a full-time basis, and at least three

(3) months if returning to work for a different employer on a full-time basis.

A retired member returning to work under subsection (1) or (2) of this section

on a part-time basis shall have separated from service for a period of at least

three (3) months before returning to work for any employer.

(b) As an alternative to the separation-from-service requirements in paragraph (a)

of this subsection, a retired member who is returning to work for the same

employer in a full-time position under subsections (1) and (2) of this section

may elect a separation-from-service of not less than two (2) months followed

by a forfeiture of the retired member's retirement allowance on a month-to-

month basis for each month that the member has separated from service for

less than twelve (12) full months. A retired member returning to work for the

same employer in a part-time position, or for a different employer in a full-

time position, may elect an alternative separation-from-service requirement of

at least two (2) months followed by a forfeiture of the member's retirement

allowance for one (1) month. During the period that the member forfeits his or

her retirement allowance and thereafter, member and employer contributions

shall be made to the retirement system as a result of employment in any

position subject to membership in the retirement system. The member shall

contribute to an account with the retirement system subject to the conditions

set forth in subsection (4) of this section.

(c) A retired member who is returning to work for an employer that has

employees who participate in the Teachers' Retirement System shall comply

with the separation-from-service requirements in this subsection before

performing any service for the employer, regardless of whether the retired

member is providing service in a position covered by the Teachers'

Retirement System.

(d) The starting date for any separation from service required under this

subsection shall be the effective date of the member's retirement.

(e) The separation-from-service requirements of this subsection are not met if

there is a prearranged agreement between the member and an employer that

has employees who participate in the Teachers' Retirement System prior to

retirement for the member to work for the employer after retirement.

(f) The Teachers' Retirement System may require the member and the employer

for which the member is returning to work to certify in writing on a form

prescribed by the Teachers' Retirement System that no prearranged agreement

was or will be entered into between the member and employer prior to

retirement for the member to work for the employer after retirement.

(g) Failure to comply with the separation-from-service requirements in this

subsection voids a member's retirement and the member shall be required to

return all the retirement benefits he or she received, with interest, for the

period of time that the member returned to work without a sufficient

separation from service;

(7) (a) Effective July 1, 2004, local school districts may employ retired members in

full-time or part-time teaching or administrative positions in critical shortage

areas without limitation on the compensation of the retired members that is

otherwise required by subsections (1) and (2) of this section. The number of

retired members that a local school district may employ under this subsection

shall be no more than four (4) members per local school district or ten percent

(10%) of the total active members employed by the local school district on a

full-time basis as defined under KRS 161.220(21), whichever number is

greater. Retired members returning to work under this subsection shall be

subject to the separation-from-service requirements set forth in subsection (6)

of this section. Retired members returning to work under this subsection shall

waive their medical insurance coverage with the retirement system during

their period of reemployment and receive medical insurance coverage that is

offered to other full-time members employed by the local school district.

Retired members returning to work under this subsection shall contribute to

an account subject to the conditions set forth in subsection (4) of this section.

Retired members returning to work under this subsection shall make

contributions to the retirement system at the rate provided under KRS

161.540. The employer shall make contributions at the rate provided under

KRS 161.550. Local school districts shall make annual payments to the

retirement system on the compensation paid to the reemployed retirees at the

rates determined by the retirement system's actuary that reflect any accrued

liability resulting from the reemployment of these members.

(b) The Department of Education may employ retired members in full-time or

part-time teaching or nonteaching positions without the limitations on

compensation otherwise required by subsections (1) and (2) of this section to

fill critical shortage areas in the schools it operates, including the Kentucky

School for the Blind and the Kentucky School for the Deaf, and to serve on

audit teams. The department shall be subject to the same requirements as local

school districts as provided in paragraph (a) of this subsection, except the

Teachers' Retirement System shall determine the maximum number of

employees that may be employed under this paragraph;

(8) The return-to-work limitations set forth in this section shall apply to retired

members who are returning to work in the same position from which they retired, or

a position substantially similar to the one from which they retired, or a position

described in KRS 161.046 or any position listed in KRS 161.220(4) which requires

membership in the retirement system. Positions which generally require

certification or graduation from a four (4) year college or university as a condition

of employment which are created, or changed to remove the position from coverage

under KRS 161.220(4) are also subject to the return to work limitations set forth in

this section. The board of trustees shall determine whether employment in a

nonteaching position is subject to this subsection;

(9) (a) Notwithstanding the provisions of this section, individuals who become

members on or after January 1, 2022, who subsequently retire and begin

drawing a monthly lifetime retirement allowance from the Teachers'

Retirement System, who following retirement are reemployed with an

employer participating in the Teachers' Retirement System, shall not be

eligible to contribute to or earn benefits in a second retirement account in the

Teachers' Retirement System during the period of reemployment.

(b) The provisions of subsections (1) to (7) of this section are not subject to KRS

161.714;

(10) Retired members may be employed in a part-time teaching capacity by an agency

described in KRS 161.220(4)(b) or (n), not to exceed the equivalent of twelve (12)

teaching hours in any one (1) fiscal year. Retired members may be employed for a

period not to exceed the equivalent of one hundred (100) days in any one (1) fiscal

year in a part-time administrative or nonteaching capacity by an agency described

in KRS 161.220(4)(b) or (n) in a position that would otherwise be covered by the

retirement system. Except as otherwise provided by this subsection, the return to

work provisions set forth in subsections (1) to (7) of this section shall not apply to

retired members who return to work solely for an agency described in KRS

161.220(4)(b) or (n). Calculation of the number of days and teaching hours for part-

time teaching, substitute teaching, or part-time employment in a nonteaching

capacity under this section shall not exceed the ratio between a school year and the

actual months of retirement for the member during that school year. The board of

trustees by administrative regulation may establish fractional equivalents of a day

of teaching service. Any member who exceeds the twelve (12) hour or one hundred

(100) day limitations of this subsection shall be subject to having his or her

retirement voided and be required to return all retirement allowances and other

benefits paid to the member or on the member's behalf since the effective date of

retirement. In lieu of voiding a member's retirement, the system may reduce the

member's retirement allowance or any other benefit to which the member would

otherwise be entitled on a dollar-for-dollar basis for each dollar of compensation

that the member earns in employment exceeding twelve (12) hours, one hundred

(100) days, or any apportionment of the two (2) combined. Retired members

returning to work for an employer described in KRS 161.220(4)(b) or (n) shall

comply with the separation-from-service requirements of subsection (6) of this

section;

(11) When a retired member returns to employment in a part-time teaching capacity or

in a nonteaching capacity as provided in subsection (10) of this section, the

employer shall contribute annually to the retirement system on the compensation

paid to the retired member at rates determined by the retirement system actuary that

reflect accrued liability for retired members who return to work under subsection

(10) of this section; and

(12) For retired members who return to work during any one (1) fiscal year in both a

position described in KRS 161.220(4)(b) or (n) and in a position described under

another provision under KRS 161.220(4), and for retired members who return to

work in a position described under KRS 161.220(4)(b) or (n) in both a teaching and

an administrative or nonteaching capacity, the board of trustees shall adopt a

methodology for a pro rata apportionment of days and hours that the retired

member may work in each position.

(13) Notwithstanding any other provision of KRS 161.220 to 161.716 to the contrary, an

annuitant who has returned to work following retirement with an employer that

does not participate in the state-administered retirement systems shall not be

required to take health insurance coverage through the employer and the system

shall continue to provide health insurance coverage and benefits to the annuitant

during the period of employment, except as may be required by the Medicare

Secondary Payer Act under 42 U.S.C. sec. 1395y(b).