RELATES TO:
KRS
161.620,
161.630,
161.650
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
161.310 requires the Board of Trustees of the
Teachers' Retirement System of the State of Kentucky to promulgate
administrative regulations for the administration of retirement system funds
and for the transaction of business.
KRS
161.630 provides that a member of the
Teachers' Retirement System retiring for service, may elect an optional benefit
in lieu of the life annuity provided by
KRS
161.620. This administrative regulation
establishes the various options which may be elected by the retiring member at
the time of retirement.
Section 1.
Option I - Straight Life Annuity with Refundable Balance. If no option is
chosen by the retiring member, or if member is retiring for disability, Option
I shall prevail, and shall consist of a life annuity (a retirement allowance
payable throughout life). Upon death of a retired member, unless Options II,
III, III(a), IV, IV(a), or V are selected, an amount consisting of the excess,
if any, of his accumulated account at time of retirement over the amount of all
annuity payments received by the member prior to his death shall be refundable
to his named beneficiary or to his estate, pursuant to
KRS
161.650.
Section 2. Option II - Annuity for Ten (10)
Years Certain and for Life Thereafter.
(1) At
time of retirement the retiring member may file with application for retirement
a sworn statement choosing Option II, and this option shall be a lesser annuity
actuarially equivalent to the annuity provided under Option I above with
payments guaranteed for ten (10) years in any event and for life thereafter if
the member survives the ten (10) year period from date of retirement. If the
member's death occurs within the ten (10) year guarantee period, annuity
payments shall continue for the remainder of the ten (10) year guarantee period
to the named beneficiary, if any, or estate.
(2) Death during the first thirty (30) days
immediately after retirement shall not affect the payment of this annuity for
ten (10) years certain.
(3) Under
Option II, a member may also select an annuity for five (5), fifteen (15), or
twenty (20) years certain and for life thereafter under the conditions provided
for the ten (10) years certain annuity, except that the length of time that the
survivor would receive an annuity if the member dies would vary according to
the years certain option selected. To select a years certain period other than
ten (10) years certain, the member shall specifically designate the number of
years to be included in the years certain period. Selection of Option II
without designation of a period of years certain shall be deemed to be the
selection of Option II as an annuity for ten (10) years certain and life
thereafter.
(4) Under Option II, in
the event of the death of both the member and the primary beneficiary before
the expiration of the years certain period selected by the member, the
surviving contingent beneficiary, if any, shall be entitled to receive annuity
payments for the remainder of the term certain. In the event of the death of
the surviving contingent beneficiary who has been predeceased by the member and
the primary beneficiary prior to the expiration of the years certain period, a
lump sum payment of the present value of all remaining annuity payments shall
be paid to the contingent beneficiary's estate. In the event that the primary
beneficiary dies before the expiration of the years certain period, but the
member did not designate a contingent beneficiary, or the contingent
beneficiary predeceases the primary beneficiary, a lump sum payment of the
present value of all remaining annuity payments shall be paid to the primary
beneficiary's estate, unless the primary beneficiary predeceases the member in
which case a lump sum payment of the present value of all remaining annuity
payments shall be paid to the member's estate.
Section 3. Option III - Joint and Last
Survivor Annuity.
(1) The retiring member may
file with application for retirement a sworn statement choosing Option III, and
this option shall be a lesser annuity actuarially equivalent to the annuity
provided under Option I above with payments continuing for the life of the
annuitant (member) plus the provision that upon his death prior to that of his
named beneficiary his annuity shall be continued throughout the life of the
beneficiary having an insurable interest in the life of the member.
(2) If both annuitant and the named
beneficiary die within thirty (30) days after date of retirement, this option
shall be void and Option I shall prevail.
Section 4. Option III(a) - Joint and Last
Survivor with "Pop-up" Option. The retiring member may file with application
for retirement a sworn statement choosing Option III(a), which option shall be
a lesser annuity actuarially equivalent to the annuity provided under Option I
and incorporating the same guarantee provision as Option III with the
additional provision that if the named beneficiary dies prior to the death of
the annuitant, the benefit payable shall revert to that which would have been
applicable under Option I at the time of retirement of the member.
Section 5. Option IV - Joint and Last
Survivor Annuity, One-half (1/2) Benefit to Survivor.
(1) The retiring member may file with
application for retirement a sworn statement choosing Option IV, which option
shall be a lesser annuity actuarially equivalent to the annuity provided under
Option I above with payments continuing for the life of the annuitant (member)
plus the provision that upon his death prior to that of his named beneficiary
one-half (1/2) of his annuity shall be continued throughout the life of the
beneficiary having an insurable interest in the life of the member.
(2) If both the annuitant and the beneficiary
die within thirty (30) days after retirement, this option shall be void and
Option I shall prevail.
Section
6. Option IV(a) - Joint and Last Survivor with One-half (1/2) to
Surviving Beneficiary with "Pop-up" Option. The retiring member may file with
application for retirement a sworn statement choosing Option IV(a), which
option shall be a lesser annuity actuarially equivalent to the annuity provided
under Option I and incorporating the same guarantee provision as Option IV with
the additional provision that if the named beneficiary dies prior to the death
of the annuitant, the benefit payable shall revert to that which would have
been applicable under Option I at the time of retirement of the
member.
Section 7. Option V -
General. In lieu of any option outlined above, the retiring member may file
with his or her application for retirement a sworn statement requesting that
some other benefit or benefits be paid to the member with or without a
survivorship option that upon the death of the member would pay to the other
person or persons having an insurable interest in the life of the member as he
or she shall nominate in writing, if the other benefit or benefits, together
with the lesser annuity, shall be certified by the actuary to be of equivalent
actuarial value to the annuity provided under Option I above and shall be
approved by the board.