KRS § 61.637 — KY Code / Title VIII / Chapter 61 / Section 61.637
61.637 Suspension of retirement payments on reemployment -- Reinstatement -- Recomputation of allowance -- Waiver of provisions in certain instances -- Reemployment in a different position -- Effect of reemployment of retired member -- Retired member serving as volunteer, independent contractor, or leased employee -- Effect of reelection for same office -- Resignation not required of certain mayors and city legislative body members to draw benefits -- Certification of absence of prearranged agreement or qualification as independent contractor or leased employee -- Forms
Status: in_force

61.637 Suspension of retirement payments on reemployment -- Reinstatement --

Recomputation of allowance -- Waiver of provisions in certain instances --

Reemployment in a different position -- Effect of reemployment of retired

member -- Retired member serving as volunteer, independent contractor, or

leased employee -- Effect of reelection for same office -- Resignation not

required of certain mayors and city legislative body members to draw benefits

-- Certification of absence of prearranged agreement or qualification as

independent contractor or leased employee -- Forms.

(1) A retired member who is receiving monthly retirement payments under any of the

provisions of KRS 61.510 to 61.705 and 78.510 to 78.852 and who is reemployed

as an employee by a participating agency prior to August 1, 1998, shall have his or

her retirement payments suspended for the duration of reemployment. Monthly

payments shall not be suspended for a retired member who is reemployed if he or

she anticipates that he or she will receive less than the maximum permissible

earnings as provided by the Federal Social Security Act in compensation as a result

of reemployment during the calendar year. The payments shall be suspended at the

beginning of the month in which the reemployment occurs.

(2) Employer and employee contributions shall be made as provided in KRS 61.510 to

61.705 and 78.510 to 78.852 on the compensation paid during reemployment,

except where monthly payments were not suspended as provided in subsection (1)

of this section or would not increase the retired member's last monthly retirement

allowance by at least one dollar ($1), and the member shall be credited with

additional service credit.

(3) In the month following the termination of reemployment, retirement allowance

payments shall be reinstated under the plan under which the member was receiving

payments prior to reemployment.

(4) (a) Notwithstanding the provisions of this section, the payments suspended in

accordance with subsection (1) of this section shall be paid retroactively to the

retired member, or his or her estate, if he or she does not receive more than

the maximum permissible earnings as provided by the Federal Social Security

Act in compensation from participating agencies during any calendar year of

reemployment.

(b) If the retired member is paid suspended payments retroactively in accordance

with this section, employee contributions deducted during his or her period of

reemployment, if any, shall be refunded to the retired employee, and no

service credit shall be earned for the period of reemployment.

(c) If the retired member is not eligible to be paid suspended payments for his or

her period of reemployment as an employee, his or her retirement allowance

shall be recomputed under the plan under which the member was receiving

payments prior to reemployment as follows:

1. The retired member's final compensation shall be recomputed using

creditable compensation for his or her period of reemployment;

however, the final compensation resulting from the recalculation shall

not be less than that of the member when his or her retirement allowance

was last determined;

2. If the retired member initially retired on or subsequent to his or her

normal retirement date, his or her retirement allowance shall be

recomputed by using the formula in KRS 61.595(1);

3. If the retired member initially retired prior to his or her normal

retirement date, his or her retirement allowance shall be recomputed

using the formula in KRS 61.595(2), except that the member's age used

in computing benefits shall be his or her age at the time of his or her

initial retirement increased by the number of months of service credit

earned for service performed during reemployment;

4. The retirement allowance payments resulting from the recomputation

under this subsection shall be payable in the month following the

termination of reemployment in lieu of payments under subparagraph 3.

of this paragraph. The member shall not receive less in benefits as a

result of the recomputation than he or she was receiving prior to

reemployment or would receive as determined under KRS 61.691; and

5. Any retired member who was reemployed prior to March 26, 1974, shall

begin making contributions to the system in accordance with the

provisions of this section on the first day of the month following March

26, 1974.

(5) A retired member, or his or her estate, shall pay to the retirement fund the total

amount of payments which are not suspended in accordance with subsection (1) of

this section if the member received more than the maximum permissible earnings as

provided by the Federal Social Security Act in compensation from participating

agencies during any calendar year of reemployment, except the retired member or

his or her estate may repay the lesser of the total amount of payments which were

not suspended or fifty cents ($0.50) of each dollar earned over the maximum

permissible earnings during reemployment if under age sixty-five (65), or one

dollar ($1) for every three dollars ($3) earned if over age sixty-five (65).

(6) (a) "Reemployment" or "reinstatement" as used in this section shall not include a

retired member who has been ordered reinstated by the Personnel Board under

authority of KRS 18A.095.

(b) 1. A retired member who has been ordered reinstated without loss of pay

by the Personnel Board under authority of KRS 18A.095 or by court

order or by order of the Kentucky Commission on Human Rights and

accepts employment by an agency participating in the Kentucky

Employees Retirement System, State Police Retirement System, or

County Employees Retirement System shall void his or her retirement

by reimbursing the system in the full amount of his or her retirement

allowance payments received, including any health insurance benefits

paid to or on behalf of the member.

2. Within twelve (12) months of the date of the final order of the Personnel

Board, the Kentucky Commission on Human Rights, or the court, the

member shall repay the system the full amount of his or her retirement

allowance payments and health insurance benefits by lump sum or enter

into an agreement with the Authority for repayment by installments.

3. Once the system has been fully reimbursed for the benefits paid to the

member and on the member's behalf, additional contributions and

service credit based on the reinstated employment shall be added to the

member's account.

(7) (a) Effective August 1, 1998, the provisions of subsections (1) to (4) of this

section shall no longer apply to a retired member who is reemployed in a

position covered by the same retirement system from which the member

retired. Reemployed retired members shall be treated as new members upon

reemployment. Any retired member whose reemployment date preceded

August 1, 1998, who does not elect, within sixty (60) days of notification by

the retirement systems, to remain under the provisions of subsections (1) to

(4) of this section shall be deemed to have elected to participate under this

subsection.

(b) A retired member whose disability retirement was discontinued pursuant to

KRS 61.615 and who is reemployed in one (1) of the systems administered by

the Kentucky Retirement Systems or County Employees Retirement System

prior to his or her normal retirement date shall have his or her accounts

combined upon termination for determining eligibility for benefits. If the

member is eligible for retirement, the member's service and creditable

compensation earned as a result of his or her reemployment shall be used in

the calculation of benefits, except that the member's final compensation shall

not be less than the final compensation last used in determining his or her

retirement allowance. The member shall not change beneficiary or payment

option designations. This provision shall apply to members reemployed on or

after August 1, 1998.

(8) If a retired member accepts employment or begins serving as a volunteer with an

employer participating in the systems administered by Kentucky Retirement

Systems or County Employees Retirement System within twelve (12) months of his

or her retirement date, the retired member shall notify the Authority and the

participating employer shall submit the information required or requested by the

Authority to confirm the individual's employment or volunteer status. The retired

member shall not be required to notify the Authority regarding any employment or

volunteer service with a participating agency that is accepted after twelve (12)

months following his or her retirement date.

(9) If the retired member is under a contract to provide services as an independent

contractor or leased employee to an employer participating in the systems

administered by Kentucky Retirement Systems or County Employees Retirement

System within twelve (12) months of his or her retirement date, the member shall

submit a copy of that contract to the Authority, and the Authority shall determine if

the member is an independent contractor or leased employee for purposes of

retirement benefits. The retired member and the participating employer shall submit

the information required or requested by the Authority to confirm the individual's

status as an independent contractor or leased employee. The retired member shall

not be required to notify the Authority regarding any services entered into as an

independent contractor or leased employee with a participating agency that the

employee enters into after twelve (12) months following his or her retirement date.

(10) If a member is receiving a retirement allowance, or has filed the forms required for

a retirement allowance, and is employed within one (1) month of the member's

initial retirement date in a position that is required to participate in the same

retirement system from which the member retired, the member's retirement shall be

voided and the member shall repay to the retirement system all benefits received.

The member shall contribute to the member account established for him or her prior

to his or her voided retirement. The retirement allowance for which the member

shall be eligible upon retirement shall be determined by total service and creditable

compensation.

(11) (a) If a member of the Kentucky Employees Retirement System retires from a

department which participates in more than one (1) retirement system and is

reemployed within one (1) month of his or her initial retirement date by the

same department in a position participating in another retirement system, the

retired member's retirement allowance shall be suspended for the first month

of his or her retirement, and the member shall repay to the retirement system

all benefits received for the month.

(b) A retired member of the County Employees Retirement System who after

initial retirement is hired by the county from which the member retired shall

be considered to have been hired by the same employer.

(12) (a) If a hazardous member who retired prior to age fifty-five (55), or a

nonhazardous member who retired prior to age sixty-five (65), is reemployed

within six (6) months of the member's termination by the same employer, the

member shall obtain from his or her previous and current employers a copy of

the job description established by the employers for the position and a

statement of the duties performed by the member for the position from which

he or she retired and for the position in which he or she has been reemployed.

(b) The job descriptions and statements of duties shall be filed with the retirement

office.

(13) If the retirement system determines that the retired member has been employed in a

position with the same principal duties as the position from which the member

retired:

(a) The member's retirement allowance shall be suspended during the period that

begins on the month in which the member is reemployed and ends six (6)

months after the member's termination;

(b) The retired member shall repay to the retirement system all benefits paid from

systems administered by Kentucky Retirement Systems or County Employees

Retirement System under reciprocity, including medical insurance benefits,

that the member received after reemployment began;

(c) Upon termination, or subsequent to expiration of the six (6) month period

from the date of termination, the retired member's retirement allowance based

on his or her initial retirement account shall no longer be suspended, and the

member shall receive the amount to which he or she is entitled, including an

increase as provided by KRS 61.691;

(d) Except as provided in subsection (7) of this section, if the position in which a

retired member is employed after initial retirement is a regular full-time

position, the retired member shall contribute to a second member account

established for him or her in the retirement system. Service credit gained after

the member's date of reemployment shall be credited to the second member

account; and

(e) Upon termination, the retired member shall be entitled to benefits payable

from his or her second retirement account.

(14) (a) If the retirement system determines that the retired member has not been

reemployed in a position with the same principal duties as the position from

which he or she retired, the retired member shall continue to receive his or her

retirement allowance.

(b) If the position is a regular full-time position, the member shall contribute to a

second member account in the retirement system.

(15) (a) If a retired member is reemployed at least one (1) month after initial

retirement in a different position, or at least six (6) months after initial

retirement in the same position, and prior to normal retirement age, the retired

member shall contribute to a second member account in the retirement system

and continue to receive a retirement allowance from the first member account.

(b) Service credit gained after reemployment shall be credited to the second

member account. Upon termination, the retired member shall be entitled to

benefits payable from the second member account.

(16) A retired member who is reemployed and contributing to a second member account

shall not be eligible to purchase service credit under any of the provisions of KRS

16.505 to 16.652, 61.510 to 61.705, or 78.510 to 78.852 which he or she was

eligible to purchase prior to his or her initial retirement.

(17) Notwithstanding any provision of subsections (1) to (7)(a) and (10) to (15) of this

section, the following shall apply to retired members who are reemployed by an

agency participating in one (1) of the systems administered by Kentucky

Retirement Systems or County Employees Retirement System on or after

September 1, 2008:

(a) If a member is receiving a retirement allowance from one (1) of the systems

administered by Kentucky Retirement Systems or County Employees

Retirement System, or has filed the forms required to receive a retirement

allowance from one (1) of the systems administered by Kentucky Retirement

Systems or County Employees Retirement System, and is employed in a

regular full-time position required to participate in one (1) of the systems

administered by Kentucky Retirement Systems or County Employees

Retirement System or is employed in a position that is not considered regular

full-time with an agency participating in one (1) of the systems administered

by Kentucky Retirement Systems or County Employees Retirement System

within one (1) month following the member's initial retirement date, the

member's retirement shall be voided, and the member shall repay to the

retirement system all benefits received, including any health insurance

benefits. If the member is returning to work in a regular full-time position

required to participate in one (1) of the systems administered by Kentucky

Retirement Systems:

1. The member shall contribute to a member account established for him or

her in one (1) of the systems administered by Kentucky Retirement

Systems or County Employees Retirement System, and employer

contributions shall be paid on behalf of the member by the participating

employer; and

2. Upon subsequent retirement, the member shall be eligible for a

retirement allowance based upon total service and creditable

compensation, including any additional service or creditable

compensation earned after his or her initial retirement was voided;

(b) If a member is receiving a retirement allowance from one (1) of the systems

administered by Kentucky Retirement Systems or County Employees

Retirement System and is employed in a regular full-time position required to

participate in one (1) of the systems administered by Kentucky Retirement

Systems or County Employees Retirement System after a one (1) month

period following the member's initial retirement date, the member may

continue to receive his or her retirement allowance during the period of

reemployment subject to the following provisions:

1. If a member is reemployed by a participating agency within twelve (12)

months of the member's retirement date, the participating agency shall

certify in writing on a form prescribed by the Authority that no

prearranged agreement existed between the employee and agency prior

to the employee's retirement for the employee to return to work with the

participating agency. If an elected official is reelected to a new term of

office in the same position as the elected official held prior to retirement

and takes office within twelve (12) months of his or her retirement date,

he or she shall be deemed by the Authority as having a prearranged

agreement under the provisions of this subparagraph and shall have his

or her retirement voided. If the participating agency fails to complete the

certification, the member's retirement shall be voided and the provisions

of paragraph (a) of this subsection shall apply to the member and the

employer. Employment that is accepted by the retired member after

twelve (12) months following the member's retirement date shall not

constitute a prearranged agreement under this paragraph;

2. Notwithstanding any other provision of KRS Chapter 16, 61, or 78 to

the contrary, the member shall not contribute to the systems and shall

not earn any additional benefits for any work performed during the

period of reemployment;

3. Except as provided by KRS 70.291 to 70.293, 95.022, and 164.952 and

except for any retiree employed as a school resource officer as defined

by KRS 158.441 or as a Kentucky guardian as defined by KRS

158.4431, the employer shall pay employer contributions as specified by

KRS 61.565, 61.702, and 78.635, as applicable, on all creditable

compensation earned by the employee during the period of

reemployment. The additional contributions paid shall be used to reduce

the unfunded actuarial liability of the systems; and

4. Except as provided by KRS 70.291 to 70.293, 95.022, and 164.952 and

except for any retiree employed as a school resource officer as defined

by KRS 158.441 or as a Kentucky guardian as defined by KRS

158.4431, the employer shall be required to reimburse the systems for

the cost of the health insurance premium paid by the systems to provide

coverage for the retiree, not to exceed the cost of the single premium.

Effective July 1, 2015, local school boards shall not be required to pay

the reimbursement required by this subparagraph for retirees employed

by the board for eighty (80) days or less during the fiscal year. Effective

August 1, 2024, the Department of Education shall pay for the health

reimbursements required by this subparagraph for a retiree who

participated in a hazardous position prior to July 1, 2003, in one (1) of

the systems administered by the Kentucky Retirement Systems or the

County Employees Retirement System, and who is reemployed by a

local school board;

(c) Notwithstanding paragraphs (a) and (b) of this subsection, a retired member

who qualifies as a volunteer for an employer participating in one (1) of the

systems administered by Kentucky Retirement Systems or County Employees

Retirement System and who is receiving reimbursement of actual expenses, a

nominal fee for his or her volunteer services, or both, shall not be considered

an employee of the participating employer and shall not be subject to

paragraphs (a) and (b) of this subsection if:

1. Prior to the retired member's most recent retirement date, he or she did

not receive creditable compensation from the participating employer in

which the retired member is performing volunteer services;

2. Any reimbursement or nominal fee received prior to the retired

member's most recent retirement date has not been credited as creditable

compensation to the member's account or utilized in the calculation of

the retired member's benefits;

3. The retired member has not purchased or received service credit under

any of the provisions of KRS 61.510 to 61.705 or 78.510 to 78.852 for

service with the participating employer for which the retired member is

performing volunteer services; and

4. Other than the status of volunteer, the retired member does not become

an employee, leased employee, or independent contractor of the

employer for which he or she is performing volunteer services for a

period of at least twelve (12) months following the retired member's

most recent retirement date.

If a retired member, who provided volunteer services with a participating

employer under this paragraph violates any provision of this paragraph, then

he or she shall be deemed an employee of the participating employer as of the

date he or she began providing volunteer services and both the retired member

and the participating employer shall be subject to paragraphs (a) and (b) of

this subsection for the period of volunteer service;

(d) Notwithstanding any provision of this section, any mayor or member of a city

legislative body shall not be required to resign from his or her position as

mayor or as a member of the city legislative body in order to begin drawing

benefits from the systems administered by Kentucky Retirement Systems or

subject to any provision of this section as it relates solely to his or her service

as a mayor or member of the city legislative body if the mayor or member of a

city legislative body:

1. Has not participated in the County Employees Retirement System prior

to retirement, but is otherwise eligible to retire from the Kentucky

Employees Retirement System or the State Police Retirement System; or

2. Has been or is participating in the County Employees Retirement

System and is at least sixty-two (62) years of age. If a mayor or member

of a city legislative body who is at least sixty-two (62) years of age

retires from the systems administered by Kentucky Retirement Systems

but remains in office after his or her effective retirement date, the mayor

or member of the city legislative body shall not accrue any further

service credit or benefits in the systems administered by Kentucky

Retirement Systems for any employment occurring on or after the

effective retirement date;

(e) Notwithstanding any provision of this section, any current or future part-time

adjunct instructor for the Kentucky Fire Commission who has not participated

in the Kentucky Employees Retirement System prior to retirement, but who is

otherwise eligible to retire from the County Employees Retirement System,

shall not be:

1. Required to resign from his or her position as a part-time adjunct

instructor for the Kentucky Fire Commission in order to begin drawing

benefits from the County Employees Retirement System; or

2. Subject to any provision of this section as it relates solely to his or her

service as a part-time adjunct instructor for the Kentucky Fire

Commission;

(f) If a member is receiving a retirement allowance from any of the retirement

systems administered by the Kentucky Retirement Systems or County

Employees Retirement System and enters into a contract or becomes a leased

employee of an employer under contract with an employer participating in

one (1) of the systems administered by the Kentucky Retirement Systems or

County Employees Retirement System:

1. At any time following retirement, if the Authority determines the

employment arrangement does qualify as an independent contractor or

leased employee, the member may continue to receive his or her

retirement allowance during the period of the contract;

2. Within one (1) month following the member's initial retirement date, if

the Authority determines the employment arrangement does not qualify

as an independent contractor or leased employee, the member's

retirement shall be voided in accordance with paragraph (a) of this

subsection;

3. After one (1) month but within twelve (12) months following the

member's initial retirement, if the Authority determines the employment

arrangement does not qualify as an independent contractor or leased

employee and that a prearranged agreement existed between the member

and the agency for the member to return to work with the agency, the

member's retirement shall be voided in accordance with paragraph (a) of

this subsection;

4. After a twelve (12) month period following the member's initial

retirement, the member may continue to receive his or her retirement

allowance during the period of the contract and the member shall not be

required to notify the system or submit any documentation for purposes

of this section to the system; and

5. After twelve (12) months or more following the retired member's

retirement date, the initiation of a contract or the initial date of the

leased employment of a retired member by a participating agency shall

not constitute a prearranged agreement under this subsection; and

(g) The Authority shall issue a final determination regarding a certification of the

absence of a prearranged agreement or the retired member's qualification as

an independent contractor or leased employee as required under this section

no later than thirty (30) days after the retired member and participating

employer provide all required forms and additional information required by

the Authority.

(18) The Authority shall promulgate administrative regulations to implement the

requirements of this section, including incorporating by reference board-prescribed

forms that a retired member and participating agency shall provide the systems

under subsections (8), (9), and (17) of this section.