KRS § 61.701 — KY Code / Title VIII / Chapter 61 / Section 61.701
61.701 Kentucky Retirement Systems insurance trust fund -- Purpose -- Participation, regulation, and termination
Status: in_force

61.701 Kentucky Retirement Systems insurance trust fund -- Purpose --

Participation, regulation, and termination.

(1) (a) There is hereby maintained a trust fund known as "Kentucky Retirement

Systems insurance trust fund."

(b) Insurance trust fund assets shall be deemed trust funds to be held and

applied solely as provided in this section. Assets shall not be used for any

other purpose and shall not be used to pay the claims of creditors or any

individual, person, or employer participating in the Kentucky Employees

Retirement System, County Employees Retirement System, or State

Police Retirement System.

(c) The trust fund has been established as a trust exempt from taxation

under 26 U.S.C. sec. 115.

(2) The insurance trust fund has been created for the purpose of providing a trust

separate from the retirement funds. Trust fund assets are and shall be:

(a) Dedicated for use for health benefits as provided in KRS 61.702 and

78.5536 and as permitted under 26 U.S.C. secs. 105 and 106, to retired

recipients and employees of employers participating in the Kentucky

Employees Retirement System, County Employees Retirement System,

and State Police Retirement System, and to certain of their dependents or

beneficiaries, including but not limited to qualified beneficiaries as

described in 42 U.S.C. secs. 300bb-1 et seq.;

(b) For recordkeeping purposes, segregated from the retirement trust funds

established under KRS 16.510, 61.515, and 78.520 and attributable to

members of the State Police Retirement System, the Kentucky

Employees Retirement System, and the County Employees Retirement

System, respectively, and when payment is made from the insurance trust

fund:

1. The assets attributable to members of the Kentucky Employees

Retirement System shall not be used to pay health benefits for

members of the County Employees Retirement System or the State

Police Retirement System;

2. The assets attributable to members of the County Employees

Retirement System shall not be used to pay health benefits for

members of the Kentucky Employees Retirement System or the

State Police Retirement System; and

3. The assets attributable to members of the State Police Retirement

System shall not be used to pay health benefits for members of the

Kentucky Employees Retirement System or the County Employees

Retirement System; and

(c) For recordkeeping purposes for the assets attributable to the members of

the Kentucky Employees Retirement System and the County Employees

Retirement System, further segregated between members in hazardous

positions as defined in KRS 61.592 and 78.510 and members in

nonhazardous positions as defined in KRS 61.510 and 78.510, and when

payment is made from the insurance trust fund:

1. The assets attributable to members in hazardous positions shall not

be used to pay health benefits to members in nonhazardous

positions; and

2. The assets attributable to members in nonhazardous positions shall

not be used to pay health benefits to members in hazardous

positions.

(3) The boards shall manage the assets of the insurance fund in the same manner

in which the respective board administers its retirement funds, except that

separate accounting and financial reporting shall be maintained for the

insurance trust fund.

(4) In addition to the requirements of subsection (2) of this section, the employers

participating in the trust funds are limited to the Commonwealth, political

subdivisions of the Commonwealth, and entities whose income is exempt from

taxation under 26 U.S.C. sec. 115. No other entity may participate in the

insurance trust funds.

(5) If the insurance trust fund is terminated, the assets in the insurance trust fund

may revert, after the payment of all liabilities, to the participating employers as

determined by the board of trustees.

(6) The respective board of trustees may adopt regulations and procedures and

take all action necessary and appropriate to provide that the income of the

insurance trust fund the board administers is exempt from taxation under Title

26 of United States Code.

(7) The establishment of the Kentucky Retirement Systems insurance trust fund

shall not diminish or expand the rights of any recipients, employees, or

dependents to health benefits.