KRS § 161.400 — KY Code / Title XIII / Chapter 161 / Section 161.400
161.400 Duties of actuary -- Actuarial investigations, valuations, and analyses
Status: in_force

161.400 Duties of actuary -- Actuarial investigations, valuations, and analyses.

(1) (a) The board of trustees shall designate as actuary a competent person who shall

be a fellow of the Conference of Consulting Actuaries or a member of the

American Academy of Actuaries. He or she shall be the technical adviser of

the board on matters regarding the operation of the funds of the system and

shall perform such other duties as are required in connection therewith.

(b) 1. At least once in each two (2) year period, the board shall cause an

actuarial investigation to be made of all of the economic experience

under the retirement system, including but not limited to the inflation

rate, investment return, and payroll growth assumptions, relative to the

economic assumptions and funding methods previously adopted by the

board.

2. At least once in each five (5) year period, the actuary shall make an

actuarial investigation into all of the demographic actuarial assumptions

used, including but not limited to mortality tables, withdrawal rates, and

retirement rate assumptions, relative to the demographic actuarial

assumptions previously adopted by the board.

3. Each 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.

(c) At least annually the actuary shall make an actuarial valuation of the

retirement system. The valuation shall include:

1. A description of the actuarial assumptions used, and the assumptions

shall be reasonably related to the experience of the system 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 system

assumptions, including but not limited to the investment return

assumption, payroll growth assumption, and medical inflation rates, on

employer contribution rates, funding levels, and unfunded liabilities;

7. The full actuarial cost of the sick leave program established by KRS

161.155(10) and the full actuarial costs of annual leave program

established by KRS 161.540(1)(f), including the total actuarially accrued

liabilities of the sick leave program and the annual leave program

determined and reported separately, and the total actuarial costs to

annually finance each program as a percentage of payroll and in total

dollars broken down by each funding source; and

8. A breakdown of each individual employer's share of the actuarially

accrued liability as determined solely by the system's consulting actuary

and assigned to each employer based upon the last participating

employer of the member or annuitant as of the valuation date. The

breakdown shall include a value for each individual employer, including

but not limited to each individual school district, each university, each

state agency, and every other individual employer who participates in

the system.

(d) On the basis of the results of the valuations, the board of trustees shall make

necessary changes in the retirement system within the provisions of law and

shall establish the contributions payable by employers and the state specified

in KRS 161.550, including changes prescribed by KRS 161.633, 161.634,

161.635, and 161.636, as applicable.

(e) 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 paragraph (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.

(2) Actuarial factors and actuarial cost factor tables in use by the retirement system for

all purposes shall be determined by the actuary of the retirement system and

approved by the board of trustees by resolution and implemented without the

necessity of an administrative regulation.

(3) A copy of each actuarial investigation, actuarial analysis, and valuation required by

subsection (1) of this section shall be forwarded electronically to the Legislative

Research Commission no later than ten (10) days after receipt by the board, 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

Teachers' Retirement System. The actuarial valuation required by subsection (1)(c)

of this section shall be submitted no later than November 15 following the close of

the fiscal year.