KRS § 164A.704 — KY Code / Title XIII / Chapter 164A / Section 164A.704
164A.704 Duties of board
Status: in_force

164A.704 Duties of board.

The board shall:

(1) Promulgate administrative regulations, set fees, and adopt procedures as are

necessary to implement the provisions of KRS 164A.700 to 164A.709;

(2) Enter into contractual agreements, including contracts for legal, actuarial, financial,

and consulting services;

(3) Invest moneys in the fund in any instruments, obligations, securities, or property as

permitted by KRS 164A.701(4) and deemed appropriate by the board;

(4) Procure insurance to protect against any loss in connection with the fund's property,

assets, or activities and to indemnify board members from personal loss or

accountability from liability arising from any action or inaction as a board member;

(5) Make arrangements with eligible educational institutions in the Commonwealth to

fulfill obligations under prepaid tuition contracts, including, but not limited to,

payment from the fund of the tuition cost on behalf of a qualified beneficiary to

attend an eligible educational institution in which the beneficiary is admitted and

enrolled;

(6) Develop requirements, procedures, and guidelines regarding prepaid tuition

contracts, including but not limited to, the termination, withdrawal, or transfer of

payments under a prepaid tuition contract; tuition shortfalls; number of participants;

time limitations for prepaid tuition contracts and the use of tuition benefits; tuition

conversions; payment schedules; payroll deductions; penalties for failure of

purchasers to adhere to contracts; and transfer of prepaid tuition credits towards

private education in the Commonwealth or for out-of-state institutions;

(7) Have the actuarial soundness of the fund evaluated by a nationally recognized

independent actuary annually, by October 1 of each year, to determine:

(a) The amount of prepaid tuition for each tuition plan; and for each eligible

educational institution for specific academic years, the corresponding value;

(b) Whether additional assets are necessary to defray the obligations of the

portion of the fund relating to contracts entered into before April 25, 2006,

and when those funds will be needed.

1. For purposes of this paragraph, a "real liability expected to accrue during

the next biennium" exists if the amount in the fund representing

contracts entered into before April 25, 2006, is not sufficient to meet all

anticipated distributions under contracts entered into before April 25,

2006, and the expense of maintaining and operating the fund for the

upcoming biennium.

2. If the report of the actuary submitted in an odd-numbered year reflects

that there will be a real liability expected to accrue during the next

biennium, the secretary of the Finance and Administration Cabinet shall

include in the budget request for the cabinet an appropriation to the

board in an amount necessary to meet the real liability in each fiscal year

of the biennium, and the General Assembly shall appropriate the

necessary funds; and

(c) Whether additional assets are necessary to defray the obligations of the

portion of the fund relating to contracts entered into after April 25, 2006, and

when those funds will be needed. If the assets of the portion of the fund

relating to contracts entered into after April 25, 2006, are insufficient to

ensure the actuarial soundness of that portion of the fund, as reported by the

actuary, the board shall adjust the price of subsequent purchases of prepaid

tuition contracts to the extent necessary to restore the actuarial soundness of

the fund. The board may suspend the sale of prepaid tuition contracts until the

next annual actuarial evaluation is completed if the board determines the

action is needed to restore the actuarial soundness of the fund. During a

suspension of sales of contracts, the board and Tuition Account Program

Office shall continue to service existing contract accounts and meet all

obligations under existing prepaid tuition contracts; and

(8) Make an annual report each year by November 1 to the Legislative Research

Commission and the Governor showing the fund's condition, and whether additional

assets will be necessary to defray the obligations of the fund.