RELATES TO:
KRS
161.220(9)
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
161.310(1) requires the
board of trustees to promulgate administrative regulations for the
administration of the funds of the retirement system and for the transaction of
business.
KRS
161.220(9) establishes the
definition of "final average salary" for retirement calculation purposes, which
limits the amount of increases in salaries that can be included as final
average salary if those increases are received for any of the three (3) years
of employment immediately prior to retirement, unless the member experiences a
corresponding change in position or in length of employment. This
administrative regulation establishes the method for calculating final average
salary if there is a change in position or in length of employment for any of
the final three (3) years immediately prior to retirement, and measuring the
increase in compensation for those final three (3) years.
Section 1. Definitions.
(1) "Additional duties" means service from a
duty or duties outside of the member's primary job duty. This includes
compensation paid from a district's supplemental or extra service salary
schedule, such as coaching, club sponsoring, and summer school teaching.
Additional duties also includes extended school services (ESS). For members
employed by employers that are not school districts, additional duties includes
assignments, responsibilities, duties, college credit hour classes taught,
grant writing, and projects that are outside of, or added to, the member's
position.
(2) "Newly Created
Position" means a position that did not exist at least a full twelve (12)
months prior to the member's assumption of that position.
(3) "Position" means:
(a) The primary job duty performed by a
member that, standing alone, earns service credit in TRS, whether that job duty
is provided in full-time employment as defined in
KRS
161.220(21), part-time
employment, or substitute teaching; and
(b) Does not include additional duties as
defined in this administrative regulation.
(4) "Previously Existing Position" means a
position that existed at least a full twelve (12) months prior to the member's
assumption of that position.
Section
2. A member who receives an increase in salary that exceeds the
limits permitted for inclusion as final average salary pursuant to
KRS
161.220(9)(b), but
experiences a corresponding change in length of employment, shall have his or
her final average salary calculated using salaries adjusted in the manner
established in this section.
(1) The member
shall receive one (1) additional day of salary for retirement calculation
purposes at the member's base daily rate of pay for each day added to the
member's annual contract in excess of the member's contracted days from the
last immediately prior fiscal year.
(2) The base daily rate of pay used as an
additional day of salary for retirement calculation purposes shall not include
compensation:
(a) For extra duties worked
beyond the member's primary job duty for which the member receives most of his
or her compensation;
(b) That
exceeds the limitations established by
KRS
161.220(9)(b);
(c) That is not "annual compensation" as
defined by
KRS
161.220(10); or
(d) That is otherwise excluded from use in
retirement calculations pursuant to the provisions of
KRS
161.220 through
161.716.
(3) The additional days shall be
worked days in order to have the additional salary included for retirement
calculation purposes.
Section
3. The limitation established by
KRS
161.220(9)(b) on the amount
of salary included in each of the member's three (3) highest salaries shall not
apply if the increase in the member's salary is due to a corresponding change
in position. A corresponding change in position only occurs if:
(1) The member assumes a newly created
position in which all duties are new and different from the previous position
the member held;
(2) The member
moves from one (1) position to another separate, previously existing position;
or
(3) The member assumes a second,
previously existing position in its entirety, and now occupies two (2)
different positions.
(4) For
purposes of paragraphs (b) and (c) of this subsection:
(a) For school district employers, the
district salary schedule shall be proof of a previously existing
position.
(b) For other employers,
proof of a previously existing position includes official employment records,
such as those for classified and non-classified positions established under the
state merit system.
(c) For all
employers, a title change in and of itself, shall not be proof.
Section 4. The
limitation established by
KRS
161.220(9)(b) on the amount
of salary included in each of the member's three (3) highest salaries shall
apply in situations including if:
(1) A member
performs additional duties during a fiscal year; or
(2) The employer changes the member's duties
or responsibilities to include additional duties or responsibilities within the
member's existing position; or
(3)
The member assumes some, but not all, duties of a second position; or
(4) The member assumes a newly created
position in which not all duties are new and different.
Section 5.
(1) Members who experience a corresponding
change in position shall be entitled to receive salary credit:
(a) If the employer is a school district,
based upon the compensation paid to the new position from the previous year's
salary schedule, plus a percentage increase equal to the highest percentage
increase received by members on any one (1) rank and step of the salary
schedule of the school district; or
(b) If the employer is not a school district,
the percentage increase received by all other members.
(2) Any contributions paid to TRS on salaries
that are disallowed under
KRS
161.220(9)(b) shall be
refunded to the school district on the member's behalf. 102 KAR
1:340.
Calculation of final average salary if there is a corresponding change in
position or in length of employment during any of the final three (3) years
immediately prior to retirement.
Section 6. The measurement of the limitation
under
KRS
161.220(9)(b) shall be
applied so that the combined increase in salary for each of the last three (3)
full years of salary prior to retirement shall not exceed the total
permissible, percentage increase received by other members of the employer for
the same three (3) year period.