161.220 Definitions for KRS 161.220 to 161.716 and 161.990.

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161.220 Definitions for KRS 161.220 to 161.716 and 161.990. As used in KRS 161.220 to 161.716 and 161.990: <br>(1) "Retirement system" means the arrangement provided for in KRS 161.220 to 161.716 and 161.990 for payment of allowances to members; (2) "Retirement allowance" means the amount annually payable during the course of his natural life to a member who has been retired by reason of service; (3) "Disability allowance" means the amount annually payable to a member retired by reason of disability; (4) "Member" means the commissioner of education, deputy commissioners, associate commissioners, and all division directors in the State Department of Education, <br>employees participating in the system pursuant to KRS 196.167(3)(b)1., and any <br>full-time teacher or professional occupying a position requiring certification or <br>graduation from a four (4) year college or university, as a condition of employment, <br>and who is employed by public boards, institutions, or agencies as follows: <br>(a) Local boards of education; <br>(b) Eastern Kentucky University, Kentucky State University, Morehead State University, Murray State University, Western Kentucky University, and any <br>community colleges established under the control of these universities; (c) State-operated secondary area vocational education or area technology centers, Kentucky School for the Blind, and Kentucky School for the Deaf; (d) The Education Professional Standards Board, other public education agencies as created by the General Assembly, and those members of the administrative <br>staff of the Teachers' Retirement System of the State of Kentucky whom the <br>board of trustees may designate by administrative regulation; (e) Regional cooperative organizations formed by local boards of education or other public educational institutions listed in this subsection, for the purpose <br>of providing educational services to the participating organizations; (f) All full-time members of the staffs of the Kentucky Association of School Administrators, Kentucky Education Association, Kentucky Vocational <br>Association, Kentucky High School Athletic Association, Kentucky Academic <br>Association, and the Kentucky School Boards Association who were members <br>of the Kentucky Teachers' Retirement System or were qualified for a position <br>covered by the system at the time of employment by the association in the <br>event that the board of directors of the respective association petitions to be <br>included. The board of trustees of the Kentucky Teachers' Retirement System <br>may designate by resolution whether part-time employees of the petitioning <br>association are to be included. The state shall make no contributions on <br>account of these employees, either full-time or part-time. The association shall <br>make the employer's contributions, including any contribution that is specified <br>under KRS 161.550. The provisions of this paragraph shall be applicable to <br>persons in the employ of the associations on or subsequent to July 1, 1972; (g) Employees of the Council on Postsecondary Education who were employees of the Department for Adult Education and Literacy and who were members of the Kentucky Teachers' Retirement System at the time the department was <br>transferred to the council pursuant to Executive Order 2003-600; (h) The Office of Career and Technical Education, except that the executive director shall not be a member; (i) The Office of Vocational Rehabilitation; <br>(j) The Kentucky Educational Collaborative for State Agency Children; <br>(k) The Governor's Scholars Program; <br>(l) Any person who is retired for service from the retirement system and is reemployed by an employer identified in this subsection in a position that the <br>board of trustees deems to be a member; (m) Employees of the former Cabinet for Workforce Development who are transferred to the Kentucky Community and Technical College System and <br>who occupy positions covered by the Kentucky Teachers' Retirement System <br>shall remain in the Teachers' Retirement System. New employees occupying <br>these positions, as well as newly created positions qualifying for Teachers' <br>Retirement System coverage that would have previously been included in the <br>former Cabinet for Workforce Development, shall be members of the <br>Teachers' Retirement System; (n) Effective January 1, 1998, employees of state community colleges who are transferred to the Kentucky Community and Technical College System shall <br>continue to participate in federal old age, survivors, disability, and hospital <br>insurance, and a retirement plan other than the Kentucky Teachers' Retirement <br>System offered by Kentucky Community and Technical College System. New <br>employees occupying positions in the Kentucky Community and Technical <br>College System as referenced in KRS 164.5807(5) that would not have <br>previously been included in the former Cabinet for Workforce Development, <br>shall participate in federal old age, survivors, disability, and hospital insurance <br>and have a choice at the time of employment of participating in a retirement <br>plan provided by the Kentucky Community and Technical College System, <br>including participation in the Kentucky Teachers' Retirement System, on the <br>same basis as faculty of the state universities as provided in KRS 161.540 and <br>161.620; (o) Employees of the Office of General Counsel, the Office of Budget and Administrative Services, and the Office of Quality and Human Resources <br>within the Office of the Secretary of the former Cabinet for Workforce <br>Development and the commissioners of the former Department for Adult <br>Education and Literacy and the former Department for Technical Education <br>who were contributing to the Kentucky Teachers' Retirement System as of <br>July 15, 2000; and (p) Employees of the Kentucky Department of Education only who are graduates of a four (4) year college or university, notwithstanding a substitution clause <br>within a job classification, and who are serving in a professional job <br>classification as defined by the department. (5) "Present teacher" means any teacher who was a teacher on or before July 1, 1940, and became a member of the retirement system created by 1938 (1st Extra. Sess.) <br>Ky. Acts ch. 1, on the date of the inauguration of the system or within one (1) year <br>after that date, and any teacher who was a member of a local teacher retirement <br>system in the public elementary or secondary schools of the state on or before July <br>1, 1940, and continued to be a member of the system until he, with the membership <br>of the local retirement system, became a member of the state Teachers' Retirement <br>System or who becomes a member under the provisions of KRS 161.470(4); (6) "New teacher" means any member not a present teacher; <br>(7) "Prior service" means the number of years during which the member was a teacher in Kentucky prior to July 1, 1941, except that not more than thirty (30) years' prior <br>service shall be allowed or credited to any teacher; (8) "Subsequent service" means the number of years during which the teacher is a member of the Teachers' Retirement System after July 1, 1941; (9) "Final average salary" means the average of the five (5) highest annual salaries which the member has received for service in a covered position and on which the <br>member has made contributions, or on which the public board, institution, or <br>agency has picked-up member contributions pursuant to KRS 161.540(2), or the <br>average of the five (5) years of highest salaries as defined in KRS 61.680(2)(a), <br>which shall include picked-up member contributions. Additionally, the board of <br>trustees may approve a final average salary based upon the average of the three (3) <br>highest salaries for members who are at least fifty-five (55) years of age and have a <br>minimum of twenty-seven (27) years of Kentucky service credit. However, if any of <br>the five (5) or three (3) highest annual salaries used to calculate the final average <br>salary was paid within the three (3) years immediately prior to the date of the <br>member's retirement, the amount of salary to be included for each of those three (3) <br>years for the purpose of calculating the final average salary shall be limited to the <br>lesser of: <br>(a) The member's actual salary; or <br>(b) The member's annual salary that was used for retirement purposes during each of the prior three (3) years, plus a percentage increase equal to the percentage <br>increase received by all other members employed by the public board, <br>institution, or agency, or for members of school districts, the highest <br>percentage increase received by members on any one (1) rank and step of the <br>salary schedule of the school district. The increase shall be computed on the <br>salary that was used for retirement purposes. This limitation shall not apply if the member receives an increase in salary in a <br>percentage exceeding that received by the other members, and this increase was <br>accompanied by a corresponding change in position or in length of employment. <br>This limitation shall also not apply to the payment to a member for accrued annual <br>leave if the individual becomes a member before July 1, 2008, or accrued sick leave <br>which is authorized by statute and which shall be included as part of a retiring <br>member's annual compensation for the member's last year of active service; (10) "Annual compensation" means the total salary received by a member as compensation for all services performed in employment covered by the retirement <br>system during a fiscal year. Annual compensation shall not include payment for any <br>benefit or salary adjustments made by the public board, institution, or agency to the <br>member or on behalf of the member which is not available as a benefit or salary <br>adjustment to other members employed by that public board, institution, or agency. <br>Annual compensation shall not include the salary supplement received by a member <br>under KRS 157.197(2)(c), 158.6455, or 158.782 on or after July 1, 1996. Under no <br>circumstances shall annual compensation include compensation that is earned by a <br>member while on assignment to an organization or agency that is not a public board, <br>institution, or agency listed in subsection (4) of this section. In the event that federal <br>law requires that a member continue membership in the retirement system even <br>though the member is on assignment to an organization or agency that is not a <br>public board, institution, or agency listed in subsection (4) of this section, the <br>member's annual compensation for retirement purposes shall be deemed to be the <br>annual compensation, as limited by subsection (9) of this section, last earned by the <br>member while still employed solely by and providing services directly to a public <br>board, institution, or agency listed in subsection (4) of this section. The board of <br>trustees shall determine if any benefit or salary adjustment qualifies as annual <br>compensation. For an individual who becomes a member on or after July 1, 2008, <br>annual compensation shall not include lump-sum payments upon termination of <br>employment for accumulated annual or compensatory leave; (11) "Age of member" means the age attained on the first day of the month immediately following the birthdate of the member. This definition is limited to retirement <br>eligibility and does not apply to tenure of members; (12) "Employ," and derivatives thereof, means relationships under which an individual provides services to an employer as an employee, as an independent contractor, as <br>an employee of a third party, or under any other arrangement as long as the services <br>provided to the employer are provided in a position that would otherwise be covered <br>by the Kentucky Teachers' Retirement System and as long as the services are being <br>provided to a public board, institution, or agency listed in subsection (4) of this <br>section; (13) "Regular interest" means interest at three percent (3%) per annum, except for an individual who becomes a member on or after July 1, 2008, "regular interest" means <br>interest at two and one-half percent (2.5%) per annum for purposes of crediting <br>interest to the teacher savings account or any other contributions made by the <br>employee that are refundable to the employee upon termination of employment; (14) "Accumulated contributions" means the contributions of a member to the teachers' savings fund, including picked-up member contributions as described in KRS <br>161.540(2), plus accrued regular interest; (15) "Annuitant" means a person who receives a retirement allowance or a disability allowance; (16) "Local retirement system" means any teacher retirement or annuity system created in any public school district in Kentucky in accordance with the laws of Kentucky; (17) "Fiscal year" means the twelve (12) month period from July 1 to June 30. The retirement plan year is concurrent with this fiscal year. A contract for a member <br>employed by a local board of education may not exceed two hundred sixty-one <br>(261) days in the fiscal year; (18) "Public schools" means the schools and other institutions mentioned in subsection (4) of this section; (19) "Dependent" as used in KRS 161.520 and 161.525 means a person who was receiving, at the time of death of the member, at least one-half (1/2) of the support <br>from the member for maintenance, including board, lodging, medical care, and <br>related costs; (20) "Active contributing member" means a member currently making contributions to the Teachers' Retirement System, who made contributions in the next preceding <br>fiscal year, for whom picked-up member contributions are currently being made, or <br>for whom these contributions were made in the next preceding fiscal year; (21) "Full-time" means employment in a position that requires services on a continuing basis equal to at least seven-tenths (7/10) of normal full-time service on a fiscal year <br>basis; (22) "Full actuarial cost," when used to determine the payment that a member must pay for service credit means the actuarial value of all costs associated with the <br>enhancement of a member's benefits or eligibility for benefit enhancements, <br>including health insurance supplement payments made by the retirement system. <br>The actuary for the retirement system shall determine the full actuarial value costs <br>and actuarial cost factor tables as provided in KRS 161.400; (23) "Last annual compensation" means the annual compensation, as defined by subsection (10) of this section and as limited by subsection (9) of this section, <br>earned by the member during the most recent period of contributing service, either <br>consecutive or nonconsecutive, that is sufficient to provide the member with one (1) <br>full year of service credit in the Kentucky Teachers' Retirement System, and which <br>compensation is used in calculating the member's initial retirement allowance, <br>excluding bonuses, retirement incentives, payments for accumulated sick, annual, <br>personal and compensatory leave, and any other lump-sum payment. For an <br>individual who becomes a member on or after July 1, 2008, payments for annual or <br>compensatory leave shall not be included in determining the member's last annual <br>compensation; (24) "Participant" means a member, as defined by subsection (4) of this section, or an annuitant, as defined by subsection (15) of this section; (25) "Qualified domestic relations order" means any judgment, decree, or order, including approval of a property settlement agreement, that: <br>(a) Is issued by a court or administrative agency; and <br>(b) Relates to the provision of child support, alimony payments, or marital property rights to an alternate payee; and (26) "Alternate payee" means a spouse, former spouse, child, or other dependent of a participant, who is designated to be paid retirement benefits in a qualified domestic <br>relations order. Effective: July 15, 2010 <br>History: Amended 2010 Ky. Acts ch. 104, sec. 4, effective April 8, 2010; ch. 148, sec. 9, effective July 15, 2010; and ch. 164, sec. 3, effective July 1, 2010. -- <br>Amended 2008 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 29, effective June 27, 2008. -- <br>Amended 2008 Ky. Acts ch. 78, sec. 2, effective July 1, 2008. -- Amended 2006 Ky. <br>Acts ch. 211, sec. 91, effective July 12, 2006. -- Amended 2004 Ky. Acts ch. 121, <br>sec. 1, effective July 1, 2004. -- Amended 2002 Ky. Acts ch. 275, sec. 3, effective <br>July 1, 2002; and ch. 300, sec. 4, effective July 15, 2002. -- Amended 2001 Ky. Acts <br>ch. 51, sec. 1, effective June 21, 2001; and ch. 137, sec. 15, effective June 21, 2001. -<br>- Amended 2000 Ky. Acts ch. 498, sec. 5, effective July 1, 2000. -- Amended 1998 <br>Ky. Acts ch. 50, sec. 3, effective July 1, 1998; and ch. 515, sec. 2, effective July 1, <br>1998. -- Amended 1997 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 68, effective May 30, <br>1997. -- Amended 1996 Ky. Acts ch. 271, sec. 10, effective July 15, 1996; and <br>ch. 359, sec. 2, effective July 1, 1996. -- Amended 1994 Ky. Acts ch. 369, sec. 1, <br>effective July 1, 1994; and ch. 469, sec. 34, effective July 15, 1994.</div></article><aside class="right-sidebar"><div class="related-sidebar"><h3><span class="emoji">⚖️</span> State Laws</h3><ul class="state-laws-list"><li><a href="https://state-laws.laws.com/state-of-alabama">The State Laws of Alabama</a></li><li><a href="https://state-laws.laws.com/state-of-alaska">The State Laws of Alaska</a></li><li><a href="https://state-laws.laws.com/state-of-arizona">The State Laws of Arizona</a></li><li><a href="https://state-laws.laws.com/state-of-arkansas">The State Laws of Arkansas</a></li><li><a href="https://state-laws.laws.com/state-of-california">The State Laws of California</a></li><li><a href="https://state-laws.laws.com/state-of-colorado">The State Laws of Colorado</a></li><li><a href="https://state-laws.laws.com/state-of-connecticut">The State Laws of Connecticut</a></li><li><a href="https://state-laws.laws.com/state-of-delaware">The State Laws of 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(Superseded)\"}]}]\n12e:[\"$\",\"li\",\"399100\",{\"children\":[\"$\",\"$Le\",null,{\"href\":\"/kentucky/217-b-0/\",\"children\":\"CHAPTER 217B FERTILIZER AND PESTICIDE USE AND APPLICATION\"}]}]\n12f:[\"$\",\"li\",\"399157\",{\"children\":[\"$\",\"$Le\",null,{\"href\":\"/kentucky/217-c-0/\",\"children\":\"CHAPTER 217C MILK AND MILK PRODUCTS\"}]}]\n130:[\"$\",\"li\",\"399169\",{\"children\":[\"$\",\"$Le\",null,{\"href\":\"/kentucky/218-0/\",\"children\":\"CHAPTER 218 UNIFORM NARCOTIC DRUG ACT (Superseded)\"}]}]\n131:[\"$\",\"li\",\"399"])</script><script>self.__next_f.push([1,"200\",{\"children\":[\"$\",\"$Le\",null,{\"href\":\"/kentucky/218-a-0/\",\"children\":\"CHAPTER 218A CONTROLLED SUBSTANCES\"}]}]\n134:T4b8e,"])</script><script>self.__next_f.push([1,"\u003ca href=\"https://law.justia.com/codes/kentucky/2009/161-00/pdf/220.pdf\"\u003eDownload pdf\u003c/a\u003e\u003cbr\u003e\u003cdiv id=\"embed_document\" style=\"width:625px; height:815px; text-align:center;\"\u003eLoading PDF...\u003c/div\u003e\u003cscript type=\"text/javascript\"\u003e var pdf_url = 'https://law.justia.com/codes/kentucky/2009/161-00/pdf/220.pdf'; $(document).ready(function() { var embedwindow = $(\"#embed_document\"); if ($.browser.msie){ embedwindow.html('\u003cembed src=\"'+pdf_url+'\" width=\"100%\" height=\"100%\"\u003e\u003c/embed\u003e'); } else { embedwindow.html('\u003ciframe style=\"width:100%; height:100%;\" src=\"https://docs.google.com/gview?url='+window.escape(pdf_url)+'\u0026embedded=true\" frameborder=\"0\"\u003e\u003c/iframe\u003e'); } });\u003c/script\u003e\u003cbr\u003e\u003cbr\u003e\u003cnoframes\u003e161.220 Definitions for KRS 161.220 to 161.716 and 161.990. As used in KRS 161.220 to 161.716 and 161.990: \u003cbr\u003e(1) \u0026quot;Retirement system\u0026quot; means the arrangement provided for in KRS 161.220 to 161.716 and 161.990 for payment of allowances to members; (2) \u0026quot;Retirement allowance\u0026quot; means the amount annually payable during the course of his natural life to a member who has been retired by reason of service; (3) \u0026quot;Disability allowance\u0026quot; means the amount annually payable to a member retired by reason of disability; (4) \u0026quot;Member\u0026quot; means the commissioner of education, deputy commissioners, associate commissioners, and all division directors in the State Department of Education, \u003cbr\u003eemployees participating in the system pursuant to KRS 196.167(3)(b)1., and any \u003cbr\u003efull-time teacher or professional occupying a position requiring certification or \u003cbr\u003egraduation from a four (4) year college or university, as a condition of employment, \u003cbr\u003eand who is employed by public boards, institutions, or agencies as follows: \u003cbr\u003e(a) Local boards of education; \u003cbr\u003e(b) Eastern Kentucky University, Kentucky State University, Morehead State University, Murray State University, Western Kentucky University, and any \u003cbr\u003ecommunity colleges established under the control of these universities; (c) State-operated secondary area vocational education or area technology centers, Kentucky School for the Blind, and Kentucky School for the Deaf; (d) The Education Professional Standards Board, other public education agencies as created by the General Assembly, and those members of the administrative \u003cbr\u003estaff of the Teachers' Retirement System of the State of Kentucky whom the \u003cbr\u003eboard of trustees may designate by administrative regulation; (e) Regional cooperative organizations formed by local boards of education or other public educational institutions listed in this subsection, for the purpose \u003cbr\u003eof providing educational services to the participating organizations; (f) All full-time members of the staffs of the Kentucky Association of School Administrators, Kentucky Education Association, Kentucky Vocational \u003cbr\u003eAssociation, Kentucky High School Athletic Association, Kentucky Academic \u003cbr\u003eAssociation, and the Kentucky School Boards Association who were members \u003cbr\u003eof the Kentucky Teachers' Retirement System or were qualified for a position \u003cbr\u003ecovered by the system at the time of employment by the association in the \u003cbr\u003eevent that the board of directors of the respective association petitions to be \u003cbr\u003eincluded. The board of trustees of the Kentucky Teachers' Retirement System \u003cbr\u003emay designate by resolution whether part-time employees of the petitioning \u003cbr\u003eassociation are to be included. The state shall make no contributions on \u003cbr\u003eaccount of these employees, either full-time or part-time. The association shall \u003cbr\u003emake the employer's contributions, including any contribution that is specified \u003cbr\u003eunder KRS 161.550. The provisions of this paragraph shall be applicable to \u003cbr\u003epersons in the employ of the associations on or subsequent to July 1, 1972; (g) Employees of the Council on Postsecondary Education who were employees of the Department for Adult Education and Literacy and who were members of the Kentucky Teachers' Retirement System at the time the department was \u003cbr\u003etransferred to the council pursuant to Executive Order 2003-600; (h) The Office of Career and Technical Education, except that the executive director shall not be a member; (i) The Office of Vocational Rehabilitation; \u003cbr\u003e(j) The Kentucky Educational Collaborative for State Agency Children; \u003cbr\u003e(k) The Governor's Scholars Program; \u003cbr\u003e(l) Any person who is retired for service from the retirement system and is reemployed by an employer identified in this subsection in a position that the \u003cbr\u003eboard of trustees deems to be a member; (m) Employees of the former Cabinet for Workforce Development who are transferred to the Kentucky Community and Technical College System and \u003cbr\u003ewho occupy positions covered by the Kentucky Teachers' Retirement System \u003cbr\u003eshall remain in the Teachers' Retirement System. New employees occupying \u003cbr\u003ethese positions, as well as newly created positions qualifying for Teachers' \u003cbr\u003eRetirement System coverage that would have previously been included in the \u003cbr\u003eformer Cabinet for Workforce Development, shall be members of the \u003cbr\u003eTeachers' Retirement System; (n) Effective January 1, 1998, employees of state community colleges who are transferred to the Kentucky Community and Technical College System shall \u003cbr\u003econtinue to participate in federal old age, survivors, disability, and hospital \u003cbr\u003einsurance, and a retirement plan other than the Kentucky Teachers' Retirement \u003cbr\u003eSystem offered by Kentucky Community and Technical College System. New \u003cbr\u003eemployees occupying positions in the Kentucky Community and Technical \u003cbr\u003eCollege System as referenced in KRS 164.5807(5) that would not have \u003cbr\u003epreviously been included in the former Cabinet for Workforce Development, \u003cbr\u003eshall participate in federal old age, survivors, disability, and hospital insurance \u003cbr\u003eand have a choice at the time of employment of participating in a retirement \u003cbr\u003eplan provided by the Kentucky Community and Technical College System, \u003cbr\u003eincluding participation in the Kentucky Teachers' Retirement System, on the \u003cbr\u003esame basis as faculty of the state universities as provided in KRS 161.540 and \u003cbr\u003e161.620; (o) Employees of the Office of General Counsel, the Office of Budget and Administrative Services, and the Office of Quality and Human Resources \u003cbr\u003ewithin the Office of the Secretary of the former Cabinet for Workforce \u003cbr\u003eDevelopment and the commissioners of the former Department for Adult \u003cbr\u003eEducation and Literacy and the former Department for Technical Education \u003cbr\u003ewho were contributing to the Kentucky Teachers' Retirement System as of \u003cbr\u003eJuly 15, 2000; and (p) Employees of the Kentucky Department of Education only who are graduates of a four (4) year college or university, notwithstanding a substitution clause \u003cbr\u003ewithin a job classification, and who are serving in a professional job \u003cbr\u003eclassification as defined by the department. (5) \u0026quot;Present teacher\u0026quot; means any teacher who was a teacher on or before July 1, 1940, and became a member of the retirement system created by 1938 (1st Extra. Sess.) \u003cbr\u003eKy. Acts ch. 1, on the date of the inauguration of the system or within one (1) year \u003cbr\u003eafter that date, and any teacher who was a member of a local teacher retirement \u003cbr\u003esystem in the public elementary or secondary schools of the state on or before July \u003cbr\u003e1, 1940, and continued to be a member of the system until he, with the membership \u003cbr\u003eof the local retirement system, became a member of the state Teachers' Retirement \u003cbr\u003eSystem or who becomes a member under the provisions of KRS 161.470(4); (6) \u0026quot;New teacher\u0026quot; means any member not a present teacher; \u003cbr\u003e(7) \u0026quot;Prior service\u0026quot; means the number of years during which the member was a teacher in Kentucky prior to July 1, 1941, except that not more than thirty (30) years' prior \u003cbr\u003eservice shall be allowed or credited to any teacher; (8) \u0026quot;Subsequent service\u0026quot; means the number of years during which the teacher is a member of the Teachers' Retirement System after July 1, 1941; (9) \u0026quot;Final average salary\u0026quot; means the average of the five (5) highest annual salaries which the member has received for service in a covered position and on which the \u003cbr\u003emember has made contributions, or on which the public board, institution, or \u003cbr\u003eagency has picked-up member contributions pursuant to KRS 161.540(2), or the \u003cbr\u003eaverage of the five (5) years of highest salaries as defined in KRS 61.680(2)(a), \u003cbr\u003ewhich shall include picked-up member contributions. Additionally, the board of \u003cbr\u003etrustees may approve a final average salary based upon the average of the three (3) \u003cbr\u003ehighest salaries for members who are at least fifty-five (55) years of age and have a \u003cbr\u003eminimum of twenty-seven (27) years of Kentucky service credit. However, if any of \u003cbr\u003ethe five (5) or three (3) highest annual salaries used to calculate the final average \u003cbr\u003esalary was paid within the three (3) years immediately prior to the date of the \u003cbr\u003emember's retirement, the amount of salary to be included for each of those three (3) \u003cbr\u003eyears for the purpose of calculating the final average salary shall be limited to the \u003cbr\u003elesser of: \u003cbr\u003e(a) The member's actual salary; or \u003cbr\u003e(b) The member's annual salary that was used for retirement purposes during each of the prior three (3) years, plus a percentage increase equal to the percentage \u003cbr\u003eincrease received by all other members employed by the public board, \u003cbr\u003einstitution, or agency, or for members of school districts, the highest \u003cbr\u003epercentage increase received by members on any one (1) rank and step of the \u003cbr\u003esalary schedule of the school district. The increase shall be computed on the \u003cbr\u003esalary that was used for retirement purposes. This limitation shall not apply if the member receives an increase in salary in a \u003cbr\u003epercentage exceeding that received by the other members, and this increase was \u003cbr\u003eaccompanied by a corresponding change in position or in length of employment. \u003cbr\u003eThis limitation shall also not apply to the payment to a member for accrued annual \u003cbr\u003eleave if the individual becomes a member before July 1, 2008, or accrued sick leave \u003cbr\u003ewhich is authorized by statute and which shall be included as part of a retiring \u003cbr\u003emember's annual compensation for the member's last year of active service; (10) \u0026quot;Annual compensation\u0026quot; means the total salary received by a member as compensation for all services performed in employment covered by the retirement \u003cbr\u003esystem during a fiscal year. Annual compensation shall not include payment for any \u003cbr\u003ebenefit or salary adjustments made by the public board, institution, or agency to the \u003cbr\u003emember or on behalf of the member which is not available as a benefit or salary \u003cbr\u003eadjustment to other members employed by that public board, institution, or agency. \u003cbr\u003eAnnual compensation shall not include the salary supplement received by a member \u003cbr\u003eunder KRS 157.197(2)(c), 158.6455, or 158.782 on or after July 1, 1996. Under no \u003cbr\u003ecircumstances shall annual compensation include compensation that is earned by a \u003cbr\u003emember while on assignment to an organization or agency that is not a public board, \u003cbr\u003einstitution, or agency listed in subsection (4) of this section. In the event that federal \u003cbr\u003elaw requires that a member continue membership in the retirement system even \u003cbr\u003ethough the member is on assignment to an organization or agency that is not a \u003cbr\u003epublic board, institution, or agency listed in subsection (4) of this section, the \u003cbr\u003emember's annual compensation for retirement purposes shall be deemed to be the \u003cbr\u003eannual compensation, as limited by subsection (9) of this section, last earned by the \u003cbr\u003emember while still employed solely by and providing services directly to a public \u003cbr\u003eboard, institution, or agency listed in subsection (4) of this section. The board of \u003cbr\u003etrustees shall determine if any benefit or salary adjustment qualifies as annual \u003cbr\u003ecompensation. For an individual who becomes a member on or after July 1, 2008, \u003cbr\u003eannual compensation shall not include lump-sum payments upon termination of \u003cbr\u003eemployment for accumulated annual or compensatory leave; (11) \u0026quot;Age of member\u0026quot; means the age attained on the first day of the month immediately following the birthdate of the member. This definition is limited to retirement \u003cbr\u003eeligibility and does not apply to tenure of members; (12) \u0026quot;Employ,\u0026quot; and derivatives thereof, means relationships under which an individual provides services to an employer as an employee, as an independent contractor, as \u003cbr\u003ean employee of a third party, or under any other arrangement as long as the services \u003cbr\u003eprovided to the employer are provided in a position that would otherwise be covered \u003cbr\u003eby the Kentucky Teachers' Retirement System and as long as the services are being \u003cbr\u003eprovided to a public board, institution, or agency listed in subsection (4) of this \u003cbr\u003esection; (13) \u0026quot;Regular interest\u0026quot; means interest at three percent (3%) per annum, except for an individual who becomes a member on or after July 1, 2008, \u0026quot;regular interest\u0026quot; means \u003cbr\u003einterest at two and one-half percent (2.5%) per annum for purposes of crediting \u003cbr\u003einterest to the teacher savings account or any other contributions made by the \u003cbr\u003eemployee that are refundable to the employee upon termination of employment; (14) \u0026quot;Accumulated contributions\u0026quot; means the contributions of a member to the teachers' savings fund, including picked-up member contributions as described in KRS \u003cbr\u003e161.540(2), plus accrued regular interest; (15) \u0026quot;Annuitant\u0026quot; means a person who receives a retirement allowance or a disability allowance; (16) \u0026quot;Local retirement system\u0026quot; means any teacher retirement or annuity system created in any public school district in Kentucky in accordance with the laws of Kentucky; (17) \u0026quot;Fiscal year\u0026quot; means the twelve (12) month period from July 1 to June 30. The retirement plan year is concurrent with this fiscal year. A contract for a member \u003cbr\u003eemployed by a local board of education may not exceed two hundred sixty-one \u003cbr\u003e(261) days in the fiscal year; (18) \u0026quot;Public schools\u0026quot; means the schools and other institutions mentioned in subsection (4) of this section; (19) \u0026quot;Dependent\u0026quot; as used in KRS 161.520 and 161.525 means a person who was receiving, at the time of death of the member, at least one-half (1/2) of the support \u003cbr\u003efrom the member for maintenance, including board, lodging, medical care, and \u003cbr\u003erelated costs; (20) \u0026quot;Active contributing member\u0026quot; means a member currently making contributions to the Teachers' Retirement System, who made contributions in the next preceding \u003cbr\u003efiscal year, for whom picked-up member contributions are currently being made, or \u003cbr\u003efor whom these contributions were made in the next preceding fiscal year; (21) \u0026quot;Full-time\u0026quot; means employment in a position that requires services on a continuing basis equal to at least seven-tenths (7/10) of normal full-time service on a fiscal year \u003cbr\u003ebasis; (22) \u0026quot;Full actuarial cost,\u0026quot; when used to determine the payment that a member must pay for service credit means the actuarial value of all costs associated with the \u003cbr\u003eenhancement of a member's benefits or eligibility for benefit enhancements, \u003cbr\u003eincluding health insurance supplement payments made by the retirement system. \u003cbr\u003eThe actuary for the retirement system shall determine the full actuarial value costs \u003cbr\u003eand actuarial cost factor tables as provided in KRS 161.400; (23) \u0026quot;Last annual compensation\u0026quot; means the annual compensation, as defined by subsection (10) of this section and as limited by subsection (9) of this section, \u003cbr\u003eearned by the member during the most recent period of contributing service, either \u003cbr\u003econsecutive or nonconsecutive, that is sufficient to provide the member with one (1) \u003cbr\u003efull year of service credit in the Kentucky Teachers' Retirement System, and which \u003cbr\u003ecompensation is used in calculating the member's initial retirement allowance, \u003cbr\u003eexcluding bonuses, retirement incentives, payments for accumulated sick, annual, \u003cbr\u003epersonal and compensatory leave, and any other lump-sum payment. For an \u003cbr\u003eindividual who becomes a member on or after July 1, 2008, payments for annual or \u003cbr\u003ecompensatory leave shall not be included in determining the member's last annual \u003cbr\u003ecompensation; (24) \u0026quot;Participant\u0026quot; means a member, as defined by subsection (4) of this section, or an annuitant, as defined by subsection (15) of this section; (25) \u0026quot;Qualified domestic relations order\u0026quot; means any judgment, decree, or order, including approval of a property settlement agreement, that: \u003cbr\u003e(a) Is issued by a court or administrative agency; and \u003cbr\u003e(b) Relates to the provision of child support, alimony payments, or marital property rights to an alternate payee; and (26) \u0026quot;Alternate payee\u0026quot; means a spouse, former spouse, child, or other dependent of a participant, who is designated to be paid retirement benefits in a qualified domestic \u003cbr\u003erelations order. Effective: July 15, 2010 \u003cbr\u003eHistory: Amended 2010 Ky. Acts ch. 104, sec. 4, effective April 8, 2010; ch. 148, sec. 9, effective July 15, 2010; and ch. 164, sec. 3, effective July 1, 2010. -- \u003cbr\u003eAmended 2008 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 29, effective June 27, 2008. -- \u003cbr\u003eAmended 2008 Ky. Acts ch. 78, sec. 2, effective July 1, 2008. -- Amended 2006 Ky. \u003cbr\u003eActs ch. 211, sec. 91, effective July 12, 2006. -- Amended 2004 Ky. Acts ch. 121, \u003cbr\u003esec. 1, effective July 1, 2004. -- Amended 2002 Ky. Acts ch. 275, sec. 3, effective \u003cbr\u003eJuly 1, 2002; and ch. 300, sec. 4, effective July 15, 2002. -- Amended 2001 Ky. Acts \u003cbr\u003ech. 51, sec. 1, effective June 21, 2001; and ch. 137, sec. 15, effective June 21, 2001. -\u003cbr\u003e- Amended 2000 Ky. Acts ch. 498, sec. 5, effective July 1, 2000. -- Amended 1998 \u003cbr\u003eKy. Acts ch. 50, sec. 3, effective July 1, 1998; and ch. 515, sec. 2, effective July 1, \u003cbr\u003e1998. -- Amended 1997 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 68, effective May 30, \u003cbr\u003e1997. -- Amended 1996 Ky. Acts ch. 271, sec. 10, effective July 15, 1996; and \u003cbr\u003ech. 359, sec. 2, effective July 1, 1996. -- Amended 1994 Ky. 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