102 Ky. Admin. Regs. 1:370 – Annuitization and disbursement from supplemental benefit.

RELATES TO:

KRS 161.220(13)(c), 161.635, 161.636

STATUTORY AUTHORITY:

KRS 161.310(1)

NECESSITY, FUNCTION, AND CONFORMITY:

KRS 161.310 requires the Board of Trustees of the Teachers' Retirement System of the State of Kentucky (TRS) to promulgate all administrative regulations for the administration of the funds of the retirement system. KRS 161.635 and 161.636 establish a supplemental benefit component for TRS 4 members. Under these statutes, the member may, upon retirement or subsequently, choose to have the accumulated contributions in the supplemental benefit component annuitized into a lifetime monthly retirement allowance or receive the actuarial equivalent under one (1) of the options established by the board pursuant to KRS 161.630 or take a distribution over a period certain or a full or partial refund. This administrative regulation provides the process for, and rules of, the annuitization of and disbursement from the supplemental component.

Section 1. Definition. (1) "TRS 4 members" means those individuals who establish membership in the retirement system on or after January 1, 2022.
Section 2. Upon retirement or subsequently, members may elect to annuitize into a lifetime monthly retirement allowance the total contributions to the supplemental benefit component in accordance with the actuarial assumptions and methods adopted by the board and in effect at the time of the member's retirement date. Members may also elect to annuitize a portion of the contributions to the supplemental benefit component and either receive a disbursement of the remaining contributions or leave the remaining balance in the supplemental benefit component to be accredited regular interest in accordance with KRS 161.220(13)(c). Members may not elect an annuity that provides a retirement allowance of less than $100 per month unless that retirement annuity represents an annuitization of all the contributions to the supplemental benefit component.
Section 3. Upon retirement or subsequently, members may request distribution of all contributions to the supplemental benefit component, partial disbursements, or leave all or part of the contributions in the supplemental benefit component to be accredited interest in accordance with KRS 161.220(13)(c). Partial disbursements shall be in amounts not less than $5,000 unless the remaining balance is less than $5,000.

History

(51 Ky.R. 431, 855; eff. 11-8-2024.)

FILED WITH LRC: October 15, 2024

CONTACT PERSON: Robert B. Barnes, Deputy Executive Secretary of Operations and General Counsel, Kentucky Teachers' Retirement System, 479 Versailles Road, Frankfort, Kentucky 40601, phone (502) 848-8508, fax (502) 573-0199, email Beau.Barnes@trs.ky.gov.

REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT

Contact Person:
1. (1) Provide a brief summary of:
  1. (a) What this administrative regulation does:
  2. (b) The necessity of this administrative regulation:
  3. (c) How this administrative regulation conforms to the content of the authorizing statutes:
  4. (d) How this administrative regulation currently assists or will assist in the effective administration of the statutes:
2. (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
  1. (a) How the amendment will change this existing administrative regulation:
  2. (b) The necessity of the amendment to this administrative regulation:
  3. (c) How the amendment conforms to the content of the authorizing statutes:
  4. (d) How the amendment will assist in the effective administration of the statutes:
3. (3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation:
4. (4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:
  1. (a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment:
  2. (b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3):
  3. (c) As a result of compliance, what benefits will accrue to the entities identified in question (3):
5. (5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:
  1. (a) Initially:
  2. (b) On a continuing basis:
6. (6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation:
7. (7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment:
8. (8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees:
9. (9) TIERING: Is tiering applied?

FISCAL IMPACT STATEMENT

(1) Identify each state statute, federal statute, or federal regulation that requires or authorizes the action taken by the administrative regulation.
(2) Identify the promulgating agency and any other affected state units, parts, or divisions:
1. (a) Estimate the following for the first year:
  1. Expenditures:
  2. Revenues:
  3. Cost Savings:
2. (b) How will expenditures, revenues, or cost savings differ in subsequent years?
(3) Identify affected local entities (for example: cities, counties, fire departments, school districts):
1. (a) Estimate the following for the first year:
  1. Expenditures:
  2. Revenues:
  3. Cost Savings:
2. (b) How will expenditures, revenues, or cost savings differ in subsequent years?
(4) Identify additional regulated entities not listed in questions (2) or (3):
1. (a) Estimate the following for the first year:
  1. Expenditures:
  2. Revenues:
  3. Cost Savings:
2. (b) How will expenditures, revenues, or cost savings differ in subsequent years?
(5) Provide a narrative to explain the:
1. (a) Fiscal impact of this administrative regulation:
2. (b) Methodology and resources used to determine the fiscal impact:
(6) Explain:
1. (a) Whether this administrative regulation will have an overall negative or adverse major economic impact to the entities identified in questions (2) - (4). ($500,000 or more, in aggregate)
2. (b) The methodology and resources used to reach this conclusion: