KRS § 6.350 — KY Code / Title II / Chapter 6 / Section 6.350
6.350 Actuarial analysis required for bill before General Assembly to increase benefits or participation in state-administered retirement system
Status: in_force

6.350 Actuarial analysis required for bill before General Assembly to increase

benefits or participation in state-administered retirement system.

(1) A bill which would increase or decrease the benefits or increase or decrease

participation in the benefits or change the actuarial accrued liability of any state-

administered retirement system shall not be reported from a legislative committee

of either house of the General Assembly for consideration by the full membership

of that house unless the bill is accompanied by an actuarial analysis.

(2) (a) An actuarial analysis required by this section shall show the economic effect

of the bill on the state-administered retirement system over a thirty (30) year

period, including:

1. An estimate of the effect on the unfunded actuarial accrued liabilities

and funding levels of the affected systems; and

2. A projection of the annual employer costs to the systems of

implementing the legislation over the thirty (30) year period. The annual

employer cost projection shall include the effect on the contributions of

participating employers as a percentage of total payroll and in total

dollars of contributions.

(b) If a bill affects more than one (1) state-administered retirement system, the

actuarial analysis shall project costs for each affected state-administered

retirement system.

(c) A statement that the cost is negligible or indeterminable shall not be

considered in compliance with this section. If a cost cannot be determined by

the actuary in accordance with paragraph (a) of this subsection, then the

systems shall certify in writing:

1. The estimated number of individuals affected;

2. The estimated change in benefit payments;

3. The estimated change to employer costs; and

4. The estimated change to administrative expenses.

(d) An actuarial analysis shall state the actuarial assumptions and methods of

computation used in the analysis and shall state whether or not the bill or

resolution, if enacted, would, in the opinion of the actuary, make the affected

state-administered retirement system actuarially unsound or, in the case of a

system already actuarially unsound, more unsound. Actuarial cost methods

and assumptions that meet actuarial standards of practice established by the

Actuarial Standards Board shall be used in all cost projections.

(e) An actuarial analysis required by this section shall be prepared by an actuary

who is a fellow of the Conference of Consulting Actuaries or a member of the

American Academy of Actuaries.

(3) (a) An actuary commissioned to make an actuarial analysis that is required by this

section, or for the purpose of seeking appropriations for a state-administered

retirement system, shall include in the analysis a complete definition of each

actuarial term used in the analysis and, either in the analysis or in a separate

actuarial valuation report made available as a public record, an enumeration

and explanation of each actuarial assumption used to complete the actuarial

analysis.

(b) If the actuary commissioned to complete the actuarial analysis is relying upon

assumptions or methods that have not been previously established by the

actuary in an actuarial valuation of the affected state-administered retirement

system, the actuary shall clearly note and describe the new assumption or

method and the basis for selecting the assumption or method, including any

documentation, studies, written opinions, calculations, and citations the

actuary used to support the use of the assumption or method.

(4) The actuarial analysis required by this section:

(a) Shall be completed by the actuary retained by the affected state-administered

retirement system. The state-administered retirement systems shall provide

the analysis without cost to the General Assembly;

(b) Shall be provided in a uniform format established by the Legislative Research

Commission;

(c) Shall include on the front page a summary of relevant data from the analysis,

including but not limited to:

1. The total nominal dollar savings or costs over the thirty (30) year period;

2. The net present value of savings or costs over the thirty (30) year period;

and

3. The estimated change in the normal cost, if applicable; and

(d) Shall include a certification by the actuary that the information provided is

accurate.

(5) For purposes of this section, the terms:

(a) "Funding level" means the actuarial value of assets divided by the actuarially

accrued liability expressed as a percentage; and

(b) "State-administered retirement system" shall include:

1. The Kentucky Employees Retirement System and the State Police

Retirement System administered by the Kentucky Retirement Systems

and established under the provisions of KRS 16.505 to 16.652 and

61.510 to 61.705;

2. The Kentucky Teachers' Retirement System established under KRS

161.220 to 161.716;

3. The Judicial Retirement Plan established under KRS 21.345 to 21.580;

4. The Legislators' Retirement Plan established under KRS 6.500 to 6.577;

and

5. The County Employees Retirement System established under KRS

78.510 to 78.852.