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 -- Retired member serving as volunteer, independent contractor, or leased employee -- Effect of reelection for same office -- Resignation not
KRS 61.637
in effect61.637. 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 -- Retired member serving as volunteer, independent contractor, or leased employee -- Effect of reelection for same office -- Resignation not
required of certain mayors and city legislative body members to draw benefits -- Certification of absence of prearranged agreement or q ualification as independent contractor or leased employee -- Forms.
(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 or her retirement payments suspended for the duration of reemployment. Monthly payments shall not be suspended for a retired member who is reemployed if he or she anticipates that he or she 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 reemploy ment 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 allow ance 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 or her estate, if he or she 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 or her 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 or her period of reemployment as an employee, his or her retirement allowance shall be recomputed under the plan under whic h 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 or her period of reemployment; however, the final compensation resulting from the rec alculation shall not be less than that of the member when his or her retirement allowance was last determined; 2. If the retired member initially retired on or subsequent to his or her normal retirement date, his or her retirement allowance shall be recomputed by using the formula in KRS 61.595(1); 3. If the retired member initially retired prior to his or her normal retirement date, his or her 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 or her age at the time of his or her 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. of this paragraph. The member shall not receive less in benefits as a result of the recomputation than he or she 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 or her 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 or her 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) 1. A retired member who has been ordered reinstated without loss of pay by the Personnel Board under authority of KRS 18A.095 or by court order or by order of the Kentucky Commission on Human Rights and accepts employment by an agency participating in the Kentucky Employees Retirement System, State Police Retirement System, or County Employees Retirement System shall void his or her retirement by reimbursing the system in the full amount of his or her retirement allowance payments received, including any health insurance benefits paid to or on behalf of the member. 2. Within twelve (12) months of the date of the final order of the Personnel Board, the Kentucky Commission on Human Rights, or the court, the member shall repay the system the full amount of his or her retirement allowance payments and health insurance benefits by lump sum or enter into an agreement with the Authority for repayment by installments. 3. Once the system has been fully reimbursed for the benefits paid to the member and on the member's behalf, additional contributions and service credit based on the reinstated employment shall be added to the member's account.
(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 or County Employees Retirement System 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) If a retired member accepts employment or begins serving as a volunteer with an employer participating in the systems administered by Kentucky Retirement Systems or County Employees Retirement System within twelve (12) months of his or her retirement date, the retired member shall notify the Authority and the participating employer shall submit the information required or requested by the Authority to confirm the individual's employment or volunteer status. The retired member shall not be required to notify the Authority regarding any employment or volunteer service with a participating agency that is accepted after twelve (12) months following his or her retirement date.
(9) If the retired member is under a contract to provide services as an independent contractor or leased employee to an employer participating in the systems administered by Kentucky Retirement Systems or County Employees Retirement System within twelve (12) months of his or her retirement date, the member shall submit a copy of that contract to the Authority, and the Authority shall determine if the member is an independent contractor or leased employee for purposes of retirement benefits. The retired member and the participating employer shall submit the information required or requested by the Authority to confirm the individual's status as an independent contractor or leased employee. The retired member shall not be required to notify the Authority regarding any services entered into as an independent contractor or leased employee with a participating agency that the employee enters into after twelve (12) months following his or her retirement date.
(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 or her prior to his or her 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 or her 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 or her 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 or her 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 or she retired and for the position in which he or she 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 or County Employees Retirement System 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 or her initial retirement account shall no longer be suspended, and the member shall receive the amount to which he or she 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 or her 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 or her 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 or she retired, the retired member shall continue to receive his or her 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 or she was eligible to purchase prior to his or her initial retirement.
(17) Notwithstanding any provision of subsections (1) to (7)(a) 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 or County Employees Retirement System on or after September 1, 2008:
(a) If a member is receiving a retirement allowance from one (1) of the systems administered by Kentucky Retirement Systems or County Employees Retirement System, or has filed the forms required to receive a retirement allowance from one (1) of the systems administered by Kentucky Retirement Systems or County Employees Retirement System, and is employed in a regular full-time position required to participate in one (1) of the systems administered by Kentucky Retirement Systems or County Employees Retirement System 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 or 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 or County Employees Retirement System, 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) If a member is receiving a retirement allowance from one (1) of the systems administered by Kentucky Retirement Systems or County Employees Retirement System and is employed in a regular full-time position required to participate in one (1) of the systems administered by Kentucky Retirement Systems or 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. If a member is reemployed by a participating agency within twelve (12) months of the member's retirement date, the participating agency shall certify in writing on a form prescribed by the Authority 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 an elected official is reelected to a new term of office in the same position as the elected official held prior to retirement and takes office within twelve (12) months of his or her retirement date, he or she shall be deemed by the Authority as having a prearranged agreement under the provisions of this subparagraph and shall have his or her retirement voided. If the participating agency fails 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. Employment that is accepted by the retired member after twelve (12) months following the member's retirement date shall not constitute a prearranged agreement under this paragraph; 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. Except as provided by KRS 70.291 to 70.293, 95.022, and 164.952 and except for any retiree employed as a school resource officer as defined by KRS 158.441 or as a Kentucky guardian as defined by KRS 158.4431, the employer shall pay employer contributions as specified by KRS 61.565, 61.702, and 78.635, as applicable, 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. Except as provided by KRS 70.291 to 70.293, 95.022, and 164.952 and except for any retiree employed as a school resource officer as defined by KRS 158.441 or as a Kentucky guardian as defined by KRS 158.4431, 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 July 1, 2015, local school boards shall not be required to pay the reimbursement required by this subparagraph for retirees employed by the board for eighty (80) days or less during the fiscal year. Effective August 1, 2024, the Department of Education shall pay for the health reimbursements required by this subparagraph for a retiree who participated in a hazardous position prior to July 1, 2003, in one (1) of the systems administered by the Kentucky Retirement Systems or the County Employees Retirement System, and who is reemployed by a local school board;
(c) Notwithstanding paragraphs (a) and (b) of this subsection, a retired member who qualifies as a volunteer for an employer participating in one (1) of the systems administered by Kentucky Retirement Systems or County Employees Retirement System and who is receiving reimbursement of actual expenses, a nominal fee for his or her volunteer services, or both, shall not be considered an employee of the participating employer and shall not be subject to paragraphs (a) and (b) of this subsection if: 1. Prior to the retired member's most recent retirement date, he or she did not receive creditable compensation from the participating employer in which the retired member is performing volunteer services; 2. Any reimbursement or nominal fee received prior to the retired member's most recent retirement date has not been credited as creditable compensation to the member's account or utilized in the calculation of the retired member's benefits; 3. The retired member has not purchased or received service credit under any of the provisions of KRS 61.510 to 61.705 or 78.510 to 78.852 for service with the participating employer for which the retired member is performing volunteer services; and 4. Other than the status of volunteer, the retired member does not become an employee, leased employee, or independent contractor of the employer for which he or she is performing volunteer services for a period of at least twelve (12) months following the retired member's most recent retirement date. If a retired member, who provided volunteer services with a participating employer under this paragraph violates any provision of this paragraph, then he or she shall be deemed an employee of the participating employer as of the date he or she began providing volunteer services and both the retired member and the participating employer shall be subject to paragraphs (a) and (b) of this subsection for the period of volunteer service;
(d) Notwithstanding any provision of this section, any mayor or member of a city legislative body shall not be required to resign from his or her position as mayor or as a member of the city legislative body in order to begin drawing benefits from the systems administered by Kentucky Retirement Systems or subject to any provision of this section as it relates solely to his or her service as a mayor or member of the city legislative body if the mayor or member of a city legislative body: 1. Has not participated in the County Employees Retirement System prior to retirement, but is otherwise eligible to retire from the Kentucky Employees Retirement System or the State Police Retirement System; or 2. Has been or is participating in the County Employees Retirement System and is at least sixty-two (62) years of age. If a mayor or member of a city legislative body who is at least sixty-two (62) years of age retires from the systems administered by Kentucky Retirement Systems but remains in office after his or her effective retirement date, the mayor or member of the city legislative body shall not accrue any further service credit or benefits in the systems administered by Kentucky Retirement Systems for any employment occurring on or after the effective retirement date;
(e) Notwithstanding any provision of this section, any current or future part-time adjunct instructor for the Kentucky Fire Commission who has not participated in the Kentucky Employees Retirement System prior to retirement, but who is otherwise eligible to retire from the County Employees Retirement System, shall not be: 1. Required to resign from his or her position as a part-time adjunct instructor for the Kentucky Fire Commission in order to begin drawing benefits from the County Employees Retirement System; or 2. Subject to any provision of this section as it relates solely to his or her service as a part-time adjunct instructor for the Kentucky Fire Commission;
(f) If a member is receiving a retirement allowance from any of the retirement systems administered by the Kentucky Retiremen t Systems or County Employees Retirement System and enters into a contract or becomes a leased employee of an employer under contract with an employer participating in one (1) of the systems administered by the Kentucky Retirement Systems or County Employees Retirement System: 1. At any time following retirement, if the Authority determines the employment arrangement does qualify as an independent contractor or leased employee, the member may continue to receive his or her retirement allowance during the pe riod of the contract; 2. Within one (1) month following the member's initial retirement date, if the Authority determines the employment arrangement does not qualify as an independent contractor or leased employee, the member's retirement shall be voided in accordance with paragraph (a) of this subsection; 3. After one (1) month but within twelve (12) months following the member's initial retirement, if the Authority determines the employment arrangement does not qualify as an independent contractor or leased employee and that a prearranged agreement existed between the member and the agency for the member to return to work with the agency, the member's retirement shall be voided in accordance with paragraph (a) of this subsection; 4. After a twelve (12) month period following the member's initial retirement, the member may continue to receive his or her retirement allowance during the period of the contract and the member shall not be required to notify the system or submit any documentation for purposes of this section to the system; and 5. After twelve (12) months or more following the retired member's retirement date, the initiation of a contract or the initial date of the leased employment of a retired member by a participating agency shall not constitute a prearranged agreement under this subsection; and
(g) The Authority shall issue a final determination regarding a certification of the absence of a prearranged agreement or the retired member's qualification as an independent contractor or leased employee as required under this section no later than thirty (30) days after the retired member and participating employer provide all required forms and additional information required by the Authority.
(18) The Authority shall promulgate administrative regulations to implement the requirements of this section, including incorporating by reference board-prescribed forms that a retired member and participating agency shall provide the systems under subsections (8), (9), and (17) of this section.
Effective: July 15, 2024
History: Amended 2024 Ky. Acts ch. 55, sec. 12, effective July 15, 2024; ch. 165, sec. 13, effective July 15, 2024; and ch. 214, sec. 1, effective July 15, 2024. -- Amended 2023 Ky. Acts ch. 71, sec. 2, effective January 1, 2024. -- Amended 2022 Ky. Acts ch. 56, sec. 1, effective July 14, 2022; and ch. 216, sec. 11, effective April 14, 2022. -- Amended 2021 Ky. Acts ch. 102, sec. 65, effective April 1, 2021. -- Amended 2020 Ky. Acts ch. 79, sec. 25, effective April 1, 2021; and ch. 121, sec. 10, effe ctive July 15, 2020. -- Amended 2019 Ky. Acts ch. 127, sec. 2, effective June 27, 2019; ch. 161, sec. 2, effective June 27, 2019; and ch. 189, sec. 1, effective June 27, 2019. - - Amended 2018 Ky. Acts ch. 107, sec. 28, effective July 14, 2018; ch. 171, sec. 20, effective April 14, 2018; and ch. 207, sec. 20, effective April 27, 2018. -- Amended 2016 Ky. Acts ch. 25, sec. 3, effective July 15, 2016; ch. 68, sec. 1, effective July 15, 2016; and ch. 78, sec. 2, effective July 15, 2016. -- Amended 2015 Ky. Acts ch. 25, sec. 1, effective June 24, 2015; and ch. 103, sec. 1, effective June 24, 2015. -- Amended 2014 Ky. Acts ch. 96, sec. 4, effective July 15, 2014. -- Amended 2011 Ky. Acts ch. 52, sec. 3, effective June 8, 2011. -- 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. -- Amended 1992 Ky. Acts ch. 240, sec. 38, effective July 14, 1992. -- Amended 1986 Ky. Acts ch. 90, sec. 18, effective July 15, 1986. -- Amended 1982 Ky. Acts ch. 448, sec. 64, effective July 15, 1982. -- Amended 1980 Ky. Acts ch. 186, sec. 12, effective July 15, 1980. -- Amended 1978 Ky. Acts ch. 311, sec. 17, effective June 17, 1978; and ch. 384, sec. 17, effective June 17, 1978. -- Amended 1976 Ky. Acts ch. 321, sec. 27. -- Amended 1974 Ky. Acts ch. 128, sec. 24. -- Amended 1972 Ky. Acts ch. 116, sec. 46. -- Amended 1970 Ky. Acts ch. 101, sec. 8. -- Created 1966 Ky. Acts ch. 35, sec. 17.
Legislative Research Commission Note (7/15/2024). This statute was amended by 2024 Ky. Acts chs. 55, 165, and 214, which do not appear to be in conflict and have been codified together.
Legislative Research Commission Note (6/27/2019). This statute was amended by 2019 Ky. Acts chs. 127, 161, and 189. Where these Acts are not in conflict, they have been codified together. Where a conflict exists, Acts ch. 127, which was last enacted by the General Assembly, prevails under KRS 446.250. Legislative Research Commission Note (12/13/2018). On December 13, 2018, the Kentucky Supreme Court ruled that the passage of 2018 SB 151 (2018 Ky. Acts ch. 107), did not comply with the three-readings rule of Kentucky Constitution Section 46 and that the legislation is, therefore, constitutionally invalid and declared void. That ruling applies to changes made to this statute in that Act. Legislative Research Commission Note (6/27/2008). A manifest clerical or typographical error in 2008 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 20 (this statute), has been corrected in codification by the Reviser of Statutes under the authority of KRS 7.136(1)(h).
Source: Kentucky Legislative Research Commission (legislature.ky.gov)URL: https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=54856Fetched: 10/20/2026