HB 441 — AN ACT relating to reemployment after retirement in the Teachers' Retirement System.

UNOFFICIALCHAPTER COPY144 251 RSCHAPTER 144 ( HB 441/EN441 ) AN ACT relating to reemployment after retirement in the Teachers' Retirement System.

Page 1 of 14 HB044120.100 - 357 - XXXX 3/28/2025 3:43 PM Engrossed UNOFFICIAL COPY 25 RS HB 441/EN (2) Any member who is retired with less than thirty (30) years of service after June 30, 2002, may return to work in a full-time or part-time position, or in a position providing substitute teaching service, covered by the Teachers' Retirement System and earn up to a maximum of sixty-five percent (65%) of the member's last annual compensation measured on a daily rate to be determined by the board of trustees.

For purposes of determining whether the salary of a member returning to work is sixty-five percent (65%) or less of the member's last annual compensation, all remuneration paid and benefits provided to the member, on an actual dollar or fair market value basis as determined by the retirement system, excluding employer-employer-provided provided medical insurance required under subsection (4)[(5)] of this section, shall be considered;

The administrative regulations shall ensure that a retired member shall not be hired in a teaching or nonteaching position by a local school district until the superintendent of the school district assures the Kentucky Teachers' Retirement System that every reasonable effort has been made to recruit Page 2 of 14 HB044120.100 - 357 - XXXX 3/28/2025 3:43 PM Engrossed UNOFFICIAL COPY 25 RS HB 441/EN other qualified applicants for the position on an annual basis;

A local school district may exceed the quota established by this subsection by making an annual written request Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY to the Kentucky Department of Education which the department may approve on a year-by-year basis[ if the statewide quota has not been met.

(4)[(5)] (a) Except as provided by subsection (9)[(10)] of this section, a member returning to work in a full-timefull- time or part-time position, or in a position providing substitute teaching service, under subsection (1) or (2) of this section shall contribute to an account with the retirement system that shall be administered independently from and with no reciprocal impact with the member's original retirement account, or any other account from which the member is eligible to draw a retirement allowance.

The new Page 3 of 14 HB044120.100 - 357 - XXXX 3/28/2025 3:43 PM Engrossed UNOFFICIAL COPY 25 RS HB 441/EN account shall independently meet all vesting requirements as well as all other conditions set forth in KRS 161.600(1) or (2), as applicable, before any retirement allowance is payable from this account.

Page 4 of 14 HB044120.100 - 357 - XXXX 3/28/2025 3:43 PM Engrossed UNOFFICIAL COPY 25 RS HB 441/EN (5)[(6)] The board of trustees may annually, on July 1, adjust the current daily rate of a member's last annual compensation, for each full twelve (12) month period that has elapsed subsequent to the member earning his or her last annual compensation, by the percentage increase in the annual average of the consumer price index for all urban consumers for the calendar year preceding the adjustment as published by the Federal Bureau of Labor Statistics, not to exceed five percent (5%) annually.

(6)[(7)] (a) A retired member returning to work under subsection (1) or (2) of this section shall have separated from service for a period of at least one (1) year if returning to work for the same employer on a full-time basis, and at least three (3) months if returning to work for a different employer on a full-timefull- time basis.

(b) As an alternative to the separation-from-service requirements in paragraph (a) of this subsection, a retired member who is returning to work for the same Page 5 of 14 HB044120.100 - 357 - XXXX 3/28/2025 3:43 PM Engrossed UNOFFICIAL COPY 25 RS HB 441/EN employer in a full-time position under subsections (1) and (2) of this section may elect a separation-from-service of not less than two (2) months followed by a forfeiture of the retired member's retirement allowance on a month-to-month-to-month monthCHAPTER 144 3 basis for each month that the member has separated from service for less than twelve (12) full months.

A retired member returning to work for the same employer in a part-time position, or for a different employer in a full-full-time time position, may elect an alternative separation-from-service requirement of at least two (2) months followed by a forfeiture of the member's retirement allowance for one (1) month.

(f) The Teachers' Retirement System may require the member and the employer Page 6 of 14 HB044120.100 - 357 - XXXX 3/28/2025 3:43 PM Engrossed UNOFFICIAL COPY 25 RS HB 441/EN for which the member is returning to work to certify in writing on a form prescribed by the Teachers' Retirement System that no prearranged agreement was or will be entered into between the member and employer prior to retirement for the member to work for the employer after retirement.

(7)[(8)] (a) Effective July 1, 2004, local school districts may employ retired members in full-time or part-timepart- time teaching or administrative positions in critical shortage areas without limitation on the compensation of the retired members that is otherwise required by subsections (1) and (2) of this section.[ Under provisions of this subsection, a local school district may only employ retired members to fill critical shortage positions for which there are no other qualified applicants as determined by the local superintendent.] The number of retired members that a local school district may employ under this subsection shall be no more than four (4)[two (2)] members per local school district or ten[one] percent (10%)[(1%)] of the total active members employed by the local school district on a full-time basis as defined under KRS 161.220(21), whichever number is greater.

Retired members returning to work Page 7 of 14 HB044120.100 - 357 - XXXX 3/28/2025 3:43 PM Engrossed UNOFFICIAL COPY 25 RS HB 441/EN under this subsection shall contribute to an account subject to the conditions set forth in subsection (4)[(5)] of this section.

(8)[(9)] The return-to-work limitations set forth in this section shall apply to retired members who are returning to work in the same position from which they retired, or a position substantially similar to the one from which Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY they retired, or a position described in KRS 161.046 or any position listed in KRS 161.220(4) which requires membership in the retirement system.

Positions which generally require certification or graduation from a four (4) year college or university as a condition of employment which are created, or changed to remove the position from coverage under KRS 161.220(4) are also subject to the return to work limitations set forth in Page 8 of 14 HB044120.100 - 357 - XXXX 3/28/2025 3:43 PM Engrossed UNOFFICIAL COPY 25 RS HB 441/EN this section.

(b) Any member who waives regular annuity benefits and returns to teaching or covered employment shall be entitled to make contributions on the salaries received for this service and have his or her retirement annuity recalculated as Page 9 of 14 HB044120.100 - 357 - XXXX 3/28/2025 3:43 PM Engrossed UNOFFICIAL COPY 25 RS HB 441/EN provided in the regular retirement formula in KRS 161.620(1), less any applicable actuarial discount applied to the original retirement allowance due to the election of a joint and last survivor option.

and (d) A member retired by reason of service who has been employed the equivalent of twenty-five (25) days or more during a school year under KRS 161.605 may waive the member's retirement annuity and return to regular employment covered by the Teachers' Retirement System during that school year a maximum of one (1) time during any five (5) year period, beginning with that school year;] (10)[(12)] Retired members may be employed in a part-time teaching capacity by an Page 10 of 14 HB044120.100 - 357 - XXXX 3/28/2025 3:43 PM Engrossed UNOFFICIAL COPY 25 RS HB 441/EN agency described in KRS 161.220(4)(b) or (n), not to exceed the equivalent of twelve (12) teaching hours in any one (1) fiscal year.

Any member who exceeds the twelve (12) hour or one hundred (100) day limitations of this subsection shall be CHAPTER 144 5 subject to having his or her retirement voided and be required to return all retirement allowances and other benefits paid to the member or on the member's behalf since the effective date of retirement.

(11)[(13)] When a retired member returns to employment in a part-time teaching capacity or in a nonteaching capacity as provided in subsection (10)[(12)] of this Page 11 of 14 HB044120.100 - 357 - XXXX 3/28/2025 3:43 PM Engrossed UNOFFICIAL COPY 25 RS HB 441/EN section, the employer shall contribute annually to the retirement system on the compensation paid to the retired member at rates determined by the retirement system actuary that reflect accrued liability for retired members who return to work under subsection (10)[(12)] of this section;

(2) (a) The Kentucky Board of Education shall promulgate administrative regulations to establish procedures to be used to appoint retired teachers and Page 12 of 14 HB044120.100 - 357 - XXXX 3/28/2025 3:43 PM Engrossed UNOFFICIAL COPY 25 RS HB 441/EN administrators to positions in critical shortage areas under this section and KRS 161.605.[ The administrative regulations shall assure that:

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY Section 3.

Notwithstanding the amendments made to subsection (11) of Section 1 of this Act, retired members participating in the retirement waiver program established by KRS 161.605(11) prior to the effective date of this Act may continue to participate in Page 13 of 14 HB044120.100 - 357 - XXXX 3/28/2025 3:43 PM Engrossed UNOFFICIAL COPY 25 RS HB 441/EN the program.

PageSigned 14by ofGovernor 14April HB044120.1001, -2025. 357 - XXXX 3/28/2025 3:43 PM Engrossed