KRS § 161.661 — KY Code / Title XIII / Chapter 161 / Section 161.661
161.661 Disability retirement
Status: in_force

161.661 Disability retirement.

(1) (a) Any member who is accredited by the Teachers' Retirement System for five

(5) or more years of service in Kentucky after July 1, 1941, may retire for

disability and be granted a disability allowance if found to be eligible as

provided in this section. Application for disability benefits shall be made

within one (1) year of the last contributing service in Kentucky, and the

disability must have occurred during the most recent period of employment in

a position covered by the Teachers' Retirement System and subsequent to the

accreditation by the Teachers' Retirement System of five (5) years of

retirement system service credit in Kentucky. The deadline for filing an

application for disability benefits shall not be subject to the jurisdiction of any

court or appeal process, nor shall it otherwise be tolled or waived. A disability

occurring during the regular vacation immediately following the last period of

active service in Kentucky or during an official leave for which the member is

entitled to make regular contributions to the retirement system, shall be

considered as having occurred during a period of active service.

(b) The annual disability allowance shall be equal to sixty percent (60%) of the

member's final average salary.

(c) The following individuals shall not be eligible for disability benefits under

this section:

1. Members with twenty-seven (27) or more years of service credit; and

2. Individuals who become members on or after July 1, 2021, who are

eligible for an unreduced benefit under KRS 161.600(1)(b)2. or (d).

(2) The provisions of KRS 161.520, 161.525, and subsections (3), (4), and (5) of this

section shall not apply to disability retirees whose benefits were calculated on the

service retirement formula nor to survivors of these members.

(3) Members shall earn one (1) year of entitlement to disability retirement, at sixty

percent (60%) of the member's final average salary, for each four (4) years of

service in a covered position, but any member meeting the service requirement for

disability retirement shall be credited with no less than five (5) years of eligibility.

(4) A member retired by reason of disability shall continue to earn service credit at the

rate of one (1) year for each year retired for disability. This service shall be credited

to the member's account at the expiration of entitlement as defined in subsection (3)

of this section, or when the member's eligibility for disability benefits is terminated

upon recommendation of a medical review committee, and this service shall be

used in calculating benefits as provided in subsection (5) of this section, but under

no circumstances shall this service be used to provide the member with more than

twenty-seven (27) years of total service credit. The service credit shall be valued at

the same level as service earned by active members as provided under KRS 161.600

or 161.620.

(5) Any member retired by reason of disability and remaining disabled at the expiration

of the entitlement period shall have his or her disability benefits recalculated using

the service retirement formula with service credit earned as set out in subsection (4)

of this section. The retirement allowance shall be calculated as set forth in KRS

161.620, except that those persons less than sixty (60) years of age shall be

considered as sixty (60) years of age. Members having their disability benefits

recalculated under this subsection shall not be entitled to a benefit based upon an

average of their three (3) highest salaries as set forth in KRS 161.220(9), unless

approved otherwise by the board of trustees.

(6) Members who have their disability retirement allowance recalculated at the

expiration of the entitlement period shall continue to have coverage under the post-

retirement medical insurance program. Restrictions on employment shall remain in

effect until the member attains age seventy (70) or until the member's eligibility is

discontinued. KRS 161.520 and 161.525 shall not apply to survivors of disability

retirees whose retirement allowances have been recalculated at the expiration of the

entitlement period. Members who have their disability retirement allowance

recalculated at the expiration of their entitlement period shall be entitled to a

minimum monthly allowance of five hundred dollars ($500) as the basic straight

life annuity. The minimum allowance shall be effective July 1, 1992, and shall

apply to those members who have had their allowance recalculated prior to that date

and to disability retirees who will have their benefit allowance recalculated on or

after that date. For individuals who become members on or after July 1, 2021,

disability retirement payments and any other recurring payments payable by any

other state-administered retirement system shall be applied to reduce, on a dollar-

for-dollar basis, the minimum monthly disability retirement allowance payable

under this subsection.

(7) Effective July 1, 1992, members retired for disability prior to July 1, 1964, shall be

entitled to a minimum monthly allowance of five hundred dollars ($500) as their

basic straight life annuity and their surviving spouse shall be eligible for survivor

benefits as provided in KRS 161.520(1)(a) and (b).

(8) Any member retired by reason of disability may voluntarily waive disability

benefits and any member, who is immediately eligible for service retirement, may

elect to waive disability benefits and retire for service on the basis of service

credited to the member on the effective date of the disability retirement.

(9) In order to qualify for retirement by reason of disability a member must suffer from

a physical or mental condition presumed to be permanent in duration and of a

nature as to render the member incapable of being gainfully employed in a covered

position. The incapability must be revealed by a competent examination by a

licensed physician or physicians and must be approved by a majority of a medical

review committee.

(10) A member retired by reason of disability shall be required to undergo periodic

examinations at the discretion of the board of trustees to determine whether the

disability allowance shall be continued. When examination and recommendation of

a medical review committee indicate the disability no longer exists, the allowance

shall be discontinued. Failure to undergo examinations and provide the Teachers'

Retirement System with requested medical documentation shall result in a

suspension of disability benefits.

(11) Eligibility for payment shall begin on the first day of the month following receipt of

the application in the Teachers' Retirement System office, or the first of the month

next following the last payment of salary or sick leave benefits by the employer,

whichever is the later date.

(12) No person who receives a disability allowance may be employed in a position that

entails duties or qualification requirements similar to positions subject to

participation in the retirement system either within or without the State of

Kentucky. So doing shall constitute a misdemeanor and shall result in loss of the

allowance from the first date of this service. For purposes of this subsection and

subsection (13) of this section, "employment" and "occupation," and derivatives

thereof, mean any activity engaged in by the member receiving disability allowance

from which income is earned. A member who applies for and is approved for

disability retirement on or after July 1, 2002, and whose annual disability benefit is

less than forty thousand dollars ($40,000) may earn income in any occupation other

than covered employment only to the extent that the annual income from the other

employment when added to the annual disability benefit does not exceed forty

thousand dollars ($40,000). For any member who exceeds this limit as a result of

income from other employment, the Kentucky Teachers' Retirement System shall

reduce the member's disability benefit on a dollar-for-dollar basis for each dollar

that the member's combined annual disability benefit and annual income from other

employment exceeds forty thousand dollars ($40,000). The board of trustees may

annually increase the forty thousand dollar ($40,000) limit by the percentage

increase in the annual average of the consumer price index for all urban consumers

for the most recent calendar year as published by the Federal Bureau of Labor

Statistics, not to exceed five percent (5%). The retirement system may require

income and employment verification from the member, including but not limited to

copies of tax returns and federal forms W-2 and W-4P. Failure to provide the

Teachers' Retirement System with requested income and employment verification

documentation shall result in a suspension of disability benefits. Submission of

false or fraudulent documentation shall, in addition to criminal penalties, result in

disqualification of all disability benefits from the date the fraudulent documentation

was submitted.

(13) All members who applied for disability retirement before July 1, 2002, and were

approved as a result of that application shall be subject to the income limitations as

they existed on June 30, 2002, until July 1, 2006. Effective July 1, 2006, the

twenty-seven thousand dollar ($27,000) limitation shall be increased to forty

thousand dollars ($40,000) and may be adjusted by the board of trustees by the

consumer price index in the manner described in subsection (12) of this section.

The recipient of a disability allowance who engages in any gainful occupation other

than covered employment must make a report of the duties involved, compensation

received, and any other pertinent information required by the board of trustees. The

retirement system may require income and employment verification from the

member, including but not limited to copies of tax returns and federal forms W-2

and W-4P. Failure to provide the Teachers' Retirement System with requested

income and employment verification documentation shall result in a suspension of

disability benefits. Submission of false or fraudulent documentation shall, in

addition to criminal penalties, result in disqualification of all disability benefits

from the date the fraudulent documentation was submitted.

(14) The board of trustees shall designate medical review committees, each consisting of

three (3) licensed physicians. A medical review committee shall pass upon all

applications for disability retirement and upon all applicant statements, medical

certifications, and examinations submitted in connection with disability

applications. The disposition of each case shall be recommended by a medical

review committee in writing to the retirement system. Members of a medical review

committee shall follow administrative regulations regarding procedures as the board

of trustees may enact and shall be paid reasonable fees and expenses as authorized

by the board of trustees in compliance with the provisions of KRS 161.330 and

161.340. The retirement system may secure additional medical examinations and

information as it deems necessary. A member may appeal any final agency decision

denying his or her disability retirement application pursuant to the provisions of

KRS 161.250(2). In the event of such an appeal, the member and his or her legal

counsel shall be entitled to all written recommendations and reports submitted by

the medical review committee to the Teachers' Retirement System. Such

recommendations and reports shall otherwise be maintained in a confidential

manner and shall not be subject to release under any conditions, including in

response to a subpoena or order issued by a court of law notwithstanding any other

statute to the contrary.

(15) A disability may be presumed to be permanent if the condition creating the

disability may be reasonably expected to continue for one (1) year or more from the

date of application for disability benefits.

(16) Any member who has voluntarily waived disability benefits or whose disability

benefits have been discontinued on recommendation of a medical review

committee, may apply for reinstatement of disability benefits. The application for

reinstatement must be made to the retirement system within twelve (12) months of

the date disability benefits terminated. If the termination of benefits were voluntary,

the reinstatement may be made without medical examination if application is made

within three (3) months of the termination date. Other applications for reinstatement

will be processed in the same manner as new applications for benefits.

(17) No person who is receiving disability benefits under this section may be employed

in a position which qualifies the person for membership in a retirement system

financed wholly or in part with public funds. Employment in a position prohibited

by this subsection shall result in disqualification for those disability benefits from

the date of employment in the prohibited position.

(18) Any person who is receiving benefits and becomes disqualified from receiving

those benefits under this section, or becomes disqualified from receiving a portion

of those benefits due to income from other than covered employment, shall

immediately notify the Teachers' Retirement System of this disqualification in

writing and shall return all benefits paid after the date of disqualification. Failure to

comply with these provisions shall create an indebtedness of that person to the

Teachers' Retirement System. Interest at the rate of eight percent (8%) per annum,

beginning on the date the written notice of disqualification is sent, shall be charged

if the debt is not repaid within sixty (60) days after the date of written notice of

disqualification. Failure to repay this debt creates a lien in favor of the Teachers'

Retirement System upon all property of the person who improperly receives

benefits and does not repay those benefits. The Teachers' Retirement System may,

in order to collect an outstanding debt, reduce or terminate any benefit that a

member is otherwise entitled to receive.

(19) Notwithstanding any other provision of this section to the contrary, individuals who

become members on or after January 1, 2022, shall be eligible for an actuarially

determined disability benefit as prescribed by the board of trustees via

administrative regulations promulgated by the board. The board of trustees shall

arrange by appropriate contract or on a self-insured basis a disability plan to

provide the disability benefits and may adjust the benefits in accordance with KRS

161.633(3) or 161.634(3).