161.597 Installment payments for purchase of service credit by active contributing members. - Kentucky Statutes

Download pdf

Loading PDF...

Page 1 of 1 161.597 Installment payments for purchase of service credit by active contributing members. (1) A member in active contributing status may purchase any service credit which the member is authorized to purchase by making installment payments in lieu of a
lump-sum payment. (2) To initiate an installment payment plan, a member shall make a written request to the retirement system for an estimate to purchase service credit by making
installment payments. (3) To qualify for installment payments, the total cost of the service purchase, including any chargeable interest, shall exceed one thousand dollars ($1,000). (4) Installment payments shall be at least fifty dollars ($50) per month and shall be made for a period of time which is not less than twelve (12) months nor more than
sixty (60) months. Interest at eight percent (8%) per annum, unless the board
specifies in an administrative regulation a different interest rate, shall be charged on
all installment payment purchases of service credit that are purchasable at less than
full actuarial cost. (5) Installment payments shall be made on a monthly basis by payroll deduction or electronic fund transfer and forwarded separately to the Teachers' Retirement
System on forms or by computer format not later than fifteen (15) days following
the end of each month. The payments shall be considered accumulated contributions
and shall not be picked up as provided in KRS 161.560, except that subject to
approval by the Internal Revenue Service and only as permitted by the Internal
Revenue Code, installment payments by payroll deduction shall be made on a tax-
deferred basis. (6) A member may elect to terminate payroll deductions at any time and purchase the remaining service credit by lump-sum payment. A member on a leave of absence
may make personal installment payments. Termination of employment in a covered
position shall terminate installment payments. If the member is later employed by a
different employer in a covered position, the member may request a new estimate
and reinstate installment payments. A member that misses two (2) consecutive
installment payments shall be in default. A member in default shall receive service
credit on a pro rata basis for the total amount of contributions made by installment
payments. A member in default may not reinstate installment payments for twelve
(12) months from the date the member was in default. (7) If a member dies before completing scheduled installment payments, the named beneficiary of the member's retirement account may pay the remaining balance due
by a lump-sum payment within thirty (30) days of the death of the member. Effective: July 13, 2004
History: Amended 2004 Ky. Acts ch. 121, sec. 14, effective July 13, 2004. -- Amended 1998 Ky. Acts ch. 515, sec. 10, effective July 1, 1998. -- Created 1996 Ky. Acts
ch. 359, sec. 1, effective July 1, 1996.