KRS § 21.402 — KY Code / Title IV / Chapter 21 / Section 21.402
21.402 Hybrid cash balance plan for certain members of Legislators' Retirement Plan and Judicial Retirement Plan -- Member contributions and employer pay credits -- Interest credits -- Termination of employment -- Options upon retirement -- Individual members' accounts established by board of Judicial Form Retirement System
Status: in_force

21.402 Hybrid cash balance plan for certain members of Legislators' Retirement

Plan and Judicial Retirement Plan -- Member contributions and employer pay

credits -- Interest credits -- Termination of employment -- Options upon

retirement -- Individual members' accounts established by board of Judicial

Form Retirement System.

(1) A member of the Legislators' Retirement Plan or the Judicial Retirement Plan,

whose participation in the Legislators' Retirement Plan or the Judicial Retirement

Plan begins on or after January 1, 2014, or a member making an election pursuant to

KRS 21.374, shall receive the retirement benefits provided by this section in lieu of

the retirement benefits provided under KRS 6.520 and 21.400. The retirement

benefit provided by this section shall be known as the hybrid cash balance plan and

shall operate as another benefit tier within the Legislators' Retirement Plan and the

Judicial Retirement Plan.

(2) The hybrid cash balance plan shall provide a retirement benefit based upon the

member's accumulated account balance, which shall include:

(a) Contributions made by the member as provided by KRS 6.500 to 6.577 and

21.345 to 21.580, except for employee contributions prescribed by KRS

6.505(1)(d)2.b. and 21.360(1)(a)3.b.;

(b) An employer pay credit of four percent (4%) of the creditable compensation

earned by the employee for each month the employee is contributing to the

hybrid cash balance plan provided by this section; and

(c) Interest credits added annually to the member's accumulated account balance

as provided by this section.

(3) (a) Member contributions and employer pay credits as provided by subsection

(2)(a) and (b) of this section shall be credited to the member's account

monthly as contributions are reported and posted to the plan.

(b) Interest credits, as provided by subsection (2)(c) of this section, shall be

credited to the member's account annually on June 30 of each fiscal year, as

determined by subsection (4) of this section.

(4) (a) On June 30 of each fiscal year, the plan shall determine if the member

contributed to the hybrid cash balance plan during the fiscal year.

(b) If the member contributed to the hybrid cash balance plan during the fiscal

year, the interest credit added to the member's account for that fiscal year shall

be determined by multiplying the member's accumulated account balance on

June 30 of the preceding fiscal year by a percentage increase equal to:

1. Four percent (4%); plus

2. Seventy-five percent (75%) of the plan's geometric average net

investment return in excess of a four percent (4%) rate of return.

(c) If the member did not contribute to the hybrid cash balance plan during the

fiscal year, the interest credit added to the member's account for that fiscal

year shall be determined by multiplying the member's accumulated account

balance on June 30 of the preceding fiscal year by four percent (4%).

(d) For purposes of this subsection, "plan's geometric average net investment

return":

1. Means the annual average geometric investment return, net of

administrative and investment fees and expenses, over the last five (5)

fiscal years as of the date the interest is credited to the member's

account; and

2. Shall be expressed as a percentage and based upon the plan in which the

member has an account.

(5) (a) Upon termination of employment, a member who has less than five (5) years

of service credited under the Legislators' Retirement Plan or the Judicial

Retirement Plan, who elects to take a refund of his or her accumulated account

balance as provided by KRS 21.460, shall forfeit the accumulated employer

credit, and shall only receive a refund of his or her accumulated contributions.

(b) Upon termination of employment, a member who has five (5) or more years of

service credited under the Legislators' Retirement Plan or the Judicial

Retirement Plan, who elects to take a refund of his or her accumulated account

balance as provided by KRS 21.460, shall receive a full refund of his or her

accumulated account balance.

(6) A member participating in the hybrid cash balance plan provided by this section

may retire:

(a) Upon reaching normal retirement age, provided he or she has earned five (5)

or more years of service credited under the Legislators' Retirement Plan or the

Judicial Retirement Plan, or another state-administered retirement system; or

(b) If the member is at least age fifty-seven (57) and has an age and years of

service total of at least eighty-seven (87) years. The years of service used to

determine eligibility for retirement under this paragraph shall only include

years of service credited under the Legislators' Retirement Plan or the Judicial

Retirement Plan, or another state-administered retirement system.

(7) A member eligible to retire under subsection (6) of this section may elect to:

(a) Receive a monthly retirement allowance payable for life by having his or her

accumulated account balance annuitized by the retirement plan in accordance

with the actuarial assumptions and actuarial methods adopted by the board

and in effect on the member's retirement date;

(b) Receive the actuarial equivalent of his or her retirement allowance calculated

under paragraph (a) of this subsection payable under one (1) of the options set

forth in KRS 21.420(8)(b); or

(c) Take a refund of his or her accumulated account balance as provided by KRS

21.460.

(8) The board of the Judicial Form Retirement System shall establish individual

members' accounts for each member participating in the hybrid cash balance plan as

provided by this section. The Judicial Form Retirement System may promulgate

administrative regulations in accordance with KRS Chapter 13A to administer the

provisions of this section.

(9) The provisions of this section shall not apply to members who began participating

in the Legislators' Retirement Plan or the Judicial Retirement Plan prior to January

1, 2014, except for those members who make an election pursuant to KRS 21.374.