61.565 Employer's contributions -- Phase-in of full actuarially required contribution rates. - Kentucky Statutes

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61.565 Employer's contributions -- Phase-in of full actuarially required contribution rates. (1) Each employer participating in the State Police Retirement System as provided for in KRS 16.505 to 16.652, each employer participating in the County Employees
Retirement System as provided for in KRS 78.510 to 78.852, and each employer
participating in the Kentucky Employees Retirement System as provided for in KRS
61.510 to 61.705 shall contribute annually to the respective retirement system an
amount equal to the percent, as computed under subsection (2) of this section, of the
creditable compensation of its employees to be known as the "normal
contributions," and an additional amount to be known as the "actuarially accrued
liability contribution" which shall be computed by amortizing the total unfunded
actuarially accrued liability over a period of thirty (30) years using the level-
percentage-of-payroll amortization method. This method shall be used beginning
with the 2007 actuarial valuation. The initial thirty (30) year amortization period
shall begin with the 2007 valuation. Any significant increase in the actuarially
accrued liability due to benefit improvements after the 2007 valuation shall be
amortized using the level-percentage-of-payroll amortization method over a
separate thirty (30) year period commencing in the year of the actuarial valuation in
which the benefit improvements are first reflected. (2) The normal contribution rate shall be determined by the entry age normal cost funding method. The actuarially accrued liability shall be determined by actuarial
method consistent with the methods prescribed for determining the normal
contribution rate. Normal contributions and the actuarially accrued liability
contribution shall be determined on actuarial bases adopted by the board. (3) Normal contribution and the actuarially accrued liability contribution rates shall be determined by the board on the basis of the annual actuarial valuation last preceding
the July 1 of a new biennium. The board may amend contribution rates as of July 1
of the second year of a biennium, if it is determined on the basis of a subsequent
actuarial valuation that amended contribution rates are necessary to satisfy the
requirements of subsections (1) and (2) of this section. (4) The system shall advise each employer prior to the beginning of each biennium, or prior to July 1 of the second year of a biennium, of any change in the employer
contribution rate. Based on the employer contribution rate, each employer shall
include in the budget sufficient funds to pay the employer contributions as
determined by the board under subsections (1) to (3) of this section. (5) (a) It is the intent of the General Assembly to begin phasing into the full actuarially required contribution rates for the Kentucky Employees Retirement
System and the State Police Retirement System. (b) For the employer contribution rate for the Kentucky Employees Retirement System pertaining to nonhazardous employees, it is the intent of the General
Assembly to work towards the goal of contributing the actuarially required
employer contribution as follows:
1. Forty-four percent (44%) of the actuarially required contribution for the
fiscal year beginning July 1, 2010; 2. Forty-eight percent (48%) of the actuarially required contribution for the
fiscal year beginning July 1, 2011; 3. Fifty-three percent (53%) of the actuarially required contribution for the
fiscal year beginning July 1, 2012; 4. Fifty-seven percent (57%) of the actuarially required contribution for the
fiscal year beginning July 1, 2013; 5. Sixty-one percent (61%) of the actuarially required contribution for the
fiscal year beginning July 1, 2014; 6. Sixty-five percent (65%) of the actuarially required contribution for the
fiscal year beginning July 1, 2015; 7. Sixty-nine percent (69%) of the actuarially required contribution for the
fiscal year beginning July 1, 2016; 8. Seventy-three percent (73%) of the actuarially required contribution for
the fiscal year beginning July 1, 2017; 9. Seventy-seven percent (77%) of the actuarially required contribution for
the fiscal year beginning July 1, 2018; 10. Eighty-one percent (81%) of the actuarially required contribution for the fiscal year beginning July 1, 2019; 11. Eighty-five percent (85%) of the actuarially required contribution for the fiscal year beginning July 1, 2020; 12. Eighty-nine percent (89%) of the actuarially required contribution for the fiscal year beginning July 1, 2021; 13. Ninety-three percent (93%) of the actuarially required contribution for the fiscal year beginning July 1, 2022; 14. Ninety-seven percent (97%) of the actuarially required contribution for the fiscal year beginning July 1, 2023; and 15. One hundred percent (100%) of the actuarially required contribution for the fiscal year beginning July 1, 2024. (c) For the employer contribution rate for the Kentucky Employees Retirement System pertaining to hazardous employees, it is the intent of the General
Assembly to work towards the goal of contributing the full actuarially
required employer contribution as follows:
1. Seventy-six percent (76%) of the actuarially required contribution for
the fiscal year beginning July 1, 2010; 2. Seventy-nine percent (79%) of the actuarially required contribution for
the fiscal year beginning July 1, 2011; 3. Eighty-three percent (83%) of the actuarially required contribution for
the fiscal year beginning July 1, 2012; 4. Eighty-six percent (86%) of the actuarially required contribution for the
fiscal year beginning July 1, 2013; 5. Eighty-nine percent (89%) of the actuarially required contribution for
the fiscal year beginning July 1, 2014; 6. Ninety-two percent (92%) of the actuarially required contribution for the
fiscal year beginning July 1, 2015; 7. Ninety-five percent (95%) of the actuarially required contribution for the
fiscal year beginning July 1, 2016; 8. Ninety-eight percent (98%) of the actuarially required contribution for
the fiscal year beginning July 1, 2017; and 9. One hundred percent (100%) of the actuarially required contribution for
the fiscal year beginning July 1, 2018. (d) For the employer contribution rate for the State Police Retirement System, it is the intent of the General Assembly to work towards the goal of contributing
the full actuarially required employer contribution as follows:
1. Sixty percent (60%) of the actuarially required contribution for the fiscal
year beginning July 1, 2010; 2. Sixty-five percent (65%) of the actuarially required contribution for the
fiscal year beginning July 1, 2011; 3. Seventy percent (70%) of the actuarially required contribution for the
fiscal year beginning July 1, 2012; 4. Seventy-five percent (75%) of the actuarially required contribution for
the fiscal year beginning July 1, 2013; 5. Eighty percent (80%) of the actuarially required contribution for the
fiscal year beginning July 1, 2014; 6. Eighty-five percent (85%) of the actuarially required contribution for the
fiscal year beginning July 1, 2015; 7. Ninety percent (90%) of the actuarially required contribution for the
fiscal year beginning July 1, 2016; 8. Ninety-five percent (95%) of the actuarially required contribution for the
fiscal year beginning July 1, 2017; 9. Ninety-eight percent (98%) of the actuarially required contribution for
the fiscal year beginning July 1, 2018; and 10. One hundred percent (100%) of the actuarially required contribution for the fiscal year beginning July 1, 2019. (6) Notwithstanding any other provision of KRS Chapter 61 to the contrary, the board shall establish employer contribution rates for the County Employees Retirement
System that will phase in to the full actuarially required contribution for the health
insurance fund over a ten (10) year period using the 2007-2008 fiscal year employer
contribution for the health insurance fund as a base employer rate and incrementally
increasing the employer rate from fiscal year 2008-2009 through fiscal year 2017-
2018. Effective: June 25, 2009 History: Amended 2009 Ky. Acts ch. 65, sec. 1, effective June 25, 2009; and ch. 77, sec. 11, effective June 25, 2009. -- Amended 2008 (1st Extra. Sess.) Ky. Acts ch. 1,
sec. 15, effective June 27, 2008. -- Amended 1992 Ky. Acts ch. 240, sec. 24,
effective July 14, 1992. -- Amended 1990 Ky. Acts ch. 489, sec. 2. effective July 13,
1990. -- Amended 1986 Ky. Acts ch. 176, sec. 4, effective July 15, 1986. -- Amended
1980 Ky. Acts ch. 186, sec. 25, effective July 15, 1980; and ch. 246, sec. 4, effective
July 15, 1980. -- Amended 1976 Ky. Acts ch. 321, sec. 40. -- Amended 1974 Ky.
Acts ch. 128, sec. 17. -- Amended 1972 Ky. Acts ch. 116, sec. 34. -- Amended 1962
Ky. Acts ch. 58, sec. 7. -- Created 1956 Ky. Acts ch. 110, sec. 12. Legislative Research Commission Note (6/25/2009). This section was amended by 2009 Ky. Acts chs. 65 and 77, which do not appear to be in conflict and have
codified together. Legislative Research Commission Note (6/25/2009). 2009 Ky. Acts ch. 65, sec. 2, provides, "The provisions of subsection (6) of Section 1 of this Act [KRS 61.565(6)]
shall become effective for the contribution rates paid by employers participating in
the County Employees Retirement System on or after July 1, 2009." Legislative Research Commission Note (6/27/2008). A manifest clerical or typographical error in 2008 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 15 (this statute),
has been corrected in codification by the Reviser of Statutes under the authority of
KRS 7.136(1)(h). Legislative Research Commission Note (6/27/2008). 2008 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 43, provides "Notwithstanding any provision of KRS 61.565 or 61.702 to
the contrary, the employer contribution rates for the County Employees Retirement
Systems (sic) from July 1, 2008, through June 30, 2009, shall be 13.5 percent,
consisting of 7.76 percent for pension and 5.74 percent for insurance, for
nonhazardous duty employees; and 29.5 percent, consisting of 15.04 percent for
pension and 14.46 percent for insurance, for hazardous duty employees." Legislative Research Commission Note (10/19/2004). 2004 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 9, provides, "Notwithstanding KRS 61.565, the employer contribution rate
for an entity participating in the Kentucky Employees Retirement System or State
Police Retirement System shall be as follows: (1) From July 1, 2004, through June 30, 2005, the contribution rates shall be no more than 5.89 percent for nonhazardous duty employees, 18.84 percent for hazardous duty employees, and 21.58 percent for employees of the State Police Retirement System. This provision shall be retroactive to July 1, 2004; and (2) From July 1, 2005, through June 30, 2006, the employer contribution rate shall
be no more than 5.89 percent for nonhazardous duty employees, 18.84 percent for hazardous duty employees, and 21.58 percent for employees of the State Police Retirement System."