KRS § 61.640 — KY Code / Title VIII / Chapter 61 / Section 61.640
61.640 Death before retirement -- Beneficiary's options -- Taxable distributions
Status: in_force

61.640 Death before retirement -- Beneficiary's options -- Taxable distributions.

(1) If a member dies prior to the first day of the month in which the member would

have received his or her first retirement allowance, the member's beneficiary shall

be eligible for the benefits provided by this section if the member had on file a

written designation of a beneficiary with the retirement office as provided by KRS

61.542 and the member met the following conditions at the date of his or her death:

(a) The member was eligible to retire under KRS 61.559(2) or (3), 61.5956(5)(a)

or (b), or 61.597(6)(a) or (b);

(b) The member was in active employment or on authorized leave of absence with

five (5) or more years of service credit and died prior to his or her normal

retirement date or was normal retirement age or older and had at least four (4)

years of service credit; or

(c) The member was not in active employment or on authorized leave of absence

with twelve (12) or more years of service credit and died prior to his or her

normal retirement date.

(2) If the beneficiary eligible for benefits as provided in subsection (1) of this section is

a single person, then the beneficiary may elect to receive:

(a) A monthly benefit payable for the life of the beneficiary that is equal to the

benefit that would have been paid had the member retired immediately prior

to his or her date of death and elected to receive benefits payable under the

survivorship one hundred percent (100%) option as provided in KRS

61.635(2);

(b) A monthly benefit payable for the life of the beneficiary under the beneficiary

Social Security adjustment option as provided in KRS 61.635(9) that is the

actuarial equivalent to the amount computed under paragraph (a) of this

subsection;

(c) A monthly benefit payable for a period of sixty (60) months that is the

actuarial equivalent to the amount computed under paragraph (a) of this

subsection;

(d) A monthly benefit payable for a period of one hundred twenty (120) months

that is the actuarial equivalent to the amount computed under paragraph (a) of

this subsection;

(e) If the member began participating in the system prior to January 1, 2014, a

monthly benefit payable for:

1. Sixty (60) months certain;

2. One hundred twenty (120) months certain;

3. The actuarial equivalent refund; or

4. The Social Security adjustment option;

that is equivalent to the benefit the member would have been entitled to

receive based on his or her years of service and final compensation at the date

of his or her death reduced by the survivorship fifty percent (50%) factor as

provided for in KRS 61.635(4), then reduced by fifty percent (50%), and that

is the actuarial equivalent to the amount computed under paragraph (a) of this

subsection; or

(f) The higher of a refund of the member's accumulated account balance as

described in KRS 61.625(1) or one (1) time lump-sum payment which shall be

the actuarial equivalent of the amount payable under paragraph (a) of this

subsection for a period of sixty (60) months.

(3) If the beneficiary eligible for benefits as provided by subsection (1) of this section

are multiple beneficiaries or a trust, then the multiple beneficiaries by consensus or

the trustee may elect to receive the actuarial equivalent amounts payable under

subsection (2)(c), (d), (e), or (f) of this section using the assumption that the

beneficiary's age is the same as the member's age.

(4) If the beneficiary eligible for benefits as provided in subsection (1) of this section is

the member's estate, then the beneficiary shall receive the higher of a refund of the

member's accumulated account balance as described in KRS 61.625(1) or the one

(1) time lump-sum payment payable under subsection (2)(f) of this section, using

the assumption that the beneficiary's age is the same as the member's age.

(5) Payments of taxable distributions made pursuant to this section shall be subject to

state and federal income tax as appropriate.