61.637 Suspension of retirement payments on reemployment -- Reinstatement -- Recomputation of allowance -- Waiver of provisions in certain instances -- Reemployment in a different position -- Effect o - Kentucky Statutes

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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 participating on or after September 1, 2008. (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
retirement payments suspended for the duration of reemployment. Monthly
payments shall not be suspended for a retired member who is reemployed if he
anticipates that he 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 estate, if he 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 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 period of reemployment as an employee, his 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 period of reemployment; however, the
final compensation resulting from the recalculation shall not be less than
that of the member when his retirement allowance was last determined; 2. If the retired member initially retired on or subsequent to his normal
retirement date, his retirement allowance shall be recomputed by using
the formula in KRS 61.595(1); 3. If the retired member initially retired prior to his normal retirement date,
his 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 age at the time of his 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.
The member shall not receive less in benefits as a result of the
recomputation than he 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 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 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) A retired member who has been ordered reinstated by the Personnel Board under authority of KRS 18A.095 or by court order or by order of the Human
Rights Commission and accepts employment by an agency participating in the
Kentucky Employees Retirement System or County Employees Retirement
System shall void his retirement by reimbursing the system in the full amount
of his retirement allowance payments received. (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 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) A retired member or his employer shall notify the retirement system if he has accepted employment with an agency that participates in the retirement system from
which the member retired. (9) If the retired member is under a contract, the member shall submit a copy of that contract to the retirement system, and the retirement system shall determine if the
member is an independent contractor for purposes of retirement benefits. (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 prior to his
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 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
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 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 retired
and for the position in which he 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 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 initial retirement account shall no longer be suspended and the member
shall receive the amount to which he 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 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 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 retired, the retired member shall continue to receive his 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 was eligible to
purchase prior to his initial retirement. (17) Notwithstanding any provision of subsections (1) to (7) 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 on or after September 1, 2008:
(a) Except as provided by paragraphs (c) and (d) of this subsection, if a member is receiving a retirement allowance from one (1) of the systems administered by
Kentucky Retirement Systems, or has filed the forms required to receive a
retirement allowance from one (1) of the systems administered by Kentucky
Retirement Systems, and is employed in a regular full-time position required
to participate in one (1) of the systems administered by Kentucky Retirement
Systems 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 within three (3) months 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, 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) Except as provided by paragraphs (c) and (d) of this subsection, if a member is receiving a retirement allowance from one (1) of the systems administered by
Kentucky Retirement Systems and is employed in a regular full-time position
required to participate in one (1) of the systems administered by Kentucky
Retirement Systems after a three (3) 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. Both the employee and participating agency shall certify in writing on a
form prescribed by the board 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 the
participating agency or employer fail 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; 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. The employer shall pay employer contributions as specified by KRS
61.565 and 61.702 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. 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; (c) If a member is receiving a retirement allowance from the State Police Retirement System or from hazardous duty retirement coverage with the
Kentucky Employees Retirement System or the County Employees Retirement
System, or has filed the forms required to receive a retirement allowance from
the State Police Retirement System or from hazardous duty retirement
coverage with the Kentucky Employees Retirement System or the County
Employees Retirement System, and is employed in a regular full-time position
required to participate in the State Police Retirement System or in a hazardous
duty position with the Kentucky Employees Retirement System or the 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, 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; and (d) If a member is receiving a retirement allowance from the State Police Retirement System or from hazardous duty retirement coverage with the
Kentucky Employees Retirement System or the County Employees Retirement
System and is employed in a regular full-time position required to participate
in the State Police Retirement System or in a hazardous duty position with the
Kentucky Employees Retirement System or the 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. Both the employee and participating agency shall certify in writing on a
form prescribed by the board 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 the participating agency or employer fail to complete the certification, the
member's retirement shall be voided and the provisions of paragraph (c)
of this subsection shall apply to the member and the employer; 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. The employer shall pay employer contributions as specified by KRS
61.565 and 61.702 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. 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: June 27, 2008
History: Amended 2008 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 20, effective June 27, 2008. -- Amended 2002 Ky. Acts ch. 52, sec. 10, effective July 15, 2002. -- Amended
2001 Ky. Acts ch. 41, sec. 1, effective June 21, 2001. -- Amended 2000 Ky. Acts
ch. 210, sec 5, effective July 14, 2000; and ch. 385, sec. 22, effective July 14, 2000. -
- Amended 1998 Ky. Acts ch. 75, sec. 1, effective July 15, 1998; and ch. 105,
sec. 28, effective July 15, 1998. -- Amended 1996 Ky. Acts ch. 167, sec. 15, effective
July 15, 1996. -- Amended 1994 Ky. Acts ch. 485, sec. 19, effective July 15, 1994.