RELATES TO:
KRS
161.420(5),
161.540(2),
161.605,
161.677,
161.700(4),
26 U.S.C.
401(a),
414(h),
26 C.F.R. 1.401-1, 1.401(a)-1
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
161.310 requires the Board of Trustees of
Teachers' Retirement System (TRS) to promulgate administrative regulations for
the administration of funds of the retirement system.
KRS
161.716 requires the board to promulgate
administrative regulations as are necessary to remove any conflicts with
federal law. TRS is a qualified plan under Section 401(a) et seq. of the
Internal Revenue Code. As a qualified plan, member contributions are
"picked-up" contributions under IRC Section 414(h) and made to TRS on a
tax-deferred basis. This administrative regulation establishes guidelines to
help ensure that a bona fide retirement has occurred under federal law before a
member returns to employment with a TRS-participating employer. This
administrative regulation is necessary to help maintain compliance with federal
tax law and the qualified status of TRS under IRC Section 401(a) et seq.
Section 1. Definitions.
(1) "Bona fide retirement" means a complete
cessation of all employment relationships between the member and any
participating employer, regardless of whether the position is one that
participates in TRS, and that there shall be no prearranged agreement prior to
retirement between the member and any participating employer that the member
will be reemployed or otherwise return to work for the employer in any
capacity.
(2) "Break in service"
means the period of time required under
KRS
161.605(7)(a)-(b) during
which the member shall have a complete separation from service before becoming
reemployed with any participating employer.
(3) "Participating employer" means an
employer that participates in TRS pursuant to
KRS
161.220(4).
(4) "Reemployed" and "Reemployment," unless
indicated otherwise in this administrative regulation, shall mean employment as
defined by
KRS
161.220(12) following
retirement with a participating employer and shall include both paid and unpaid
employment and full-time, part-time, temporary, seasonal, voluntary, and hourly
employment.
(5) "Reemployment date"
means the first date that the member is reemployed after their retirement
date.
(6) "Retirement date" means
the member's most recent effective retirement date with TRS.
Section 2.
(1) A retired member may not be reemployed
unless he or she has first experienced a bona fide retirement with the
appropriate break in service, as provided in
KRS
161.605(7)(a) or (b), prior
to reemployment. Failure to do so shall void the member's retirement and
require the return of all benefits with interest as provided under
KRS
161.605(7)(c). This
requirement applies to all members and participating employers.
(2) The period of time established for the
break in service shall be measured from the member's retirement date to the
member's reemployment date.
Section
3.
(1) There shall be no
prearranged agreement, prior to retirement, between the member and any
participating employer that the member shall be reemployed or otherwise return
to work in any capacity after retirement.
(2) A retired member shall not be reemployed
by a participating employer, unless prior to reemployment both the member and
the participating employer have certified that there was no prearranged
agreement prior to retirement between the member and the employer that the
member would be reemployed. This requirement applies to both reemployment in
positions that participate in TRS and those that do not.
Section 4.
(1) The member and participating employer
shall complete and file with TRS Form 10-C prior to reemployment of that
retired member. If the member has been retired twelve (12) months or longer
following his or her retirement date, the member and participating employer
shall not be required to file Form 10-C.
(2) A participating employer shall complete
and file Form 30-E with TRS prior to reemployment of any retired member who is
returning to work in a position that the employer deems to be a position that
is not required to contribute to TRS.
Section 5. Incorporation by Reference.
(1) Form 10-C, "Reemployment Certification",
06/17/2019; and
(2) Form 30-E,
"Employment Limitations Exemption Request", 06/17/2019.
(3) This material may be inspected, copied,
or obtained, subject to applicable copyright law, at Teachers' Retirement
System, 479 Versailles Road, Frankfort, Kentucky 40601, Monday through Friday,
8 a.m. to 5 p.m.
