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161.597 Installment payments for purchase of service credit by active contributing members.

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Page 1 of 1 161.597 Installment payments for purchase of service credit by active contributing members. (1) A member in active contributing status may purchase any service credit which the member is authorized to purchase by making installment payments in lieu of a <br>lump-sum payment. (2) To initiate an installment payment plan, a member shall make a written request to the retirement system for an estimate to purchase service credit by making <br>installment payments. (3) To qualify for installment payments, the total cost of the service purchase, including any chargeable interest, shall exceed one thousand dollars (&#36;1,000). (4) Installment payments shall be at least fifty dollars (&#36;50) per month and shall be made for a period of time which is not less than twelve (12) months nor more than <br>sixty (60) months. Interest at eight percent (8%) per annum, unless the board <br>specifies in an administrative regulation a different interest rate, shall be charged on <br>all installment payment purchases of service credit that are purchasable at less than <br>full actuarial cost. (5) Installment payments shall be made on a monthly basis by payroll deduction or electronic fund transfer and forwarded separately to the Teachers' Retirement <br>System on forms or by computer format not later than fifteen (15) days following <br>the end of each month. The payments shall be considered accumulated contributions <br>and shall not be picked up as provided in KRS 161.560, except that subject to <br>approval by the Internal Revenue Service and only as permitted by the Internal <br>Revenue Code, installment payments by payroll deduction shall be made on a tax-<br>deferred basis. (6) A member may elect to terminate payroll deductions at any time and purchase the remaining service credit by lump-sum payment. A member on a leave of absence <br>may make personal installment payments. Termination of employment in a covered <br>position shall terminate installment payments. If the member is later employed by a <br>different employer in a covered position, the member may request a new estimate <br>and reinstate installment payments. A member that misses two (2) consecutive <br>installment payments shall be in default. A member in default shall receive service <br>credit on a pro rata basis for the total amount of contributions made by installment <br>payments. A member in default may not reinstate installment payments for twelve <br>(12) months from the date the member was in default. (7) If a member dies before completing scheduled installment payments, the named beneficiary of the member's retirement account may pay the remaining balance due <br>by a lump-sum payment within thirty (30) days of the death of the member. Effective: July 13, 2004 <br>History: Amended 2004 Ky. Acts ch. 121, sec. 14, effective July 13, 2004. -- Amended 1998 Ky. Acts ch. 515, sec. 10, effective July 1, 1998. -- Created 1996 Ky. Acts <br>ch. 359, sec. 1, effective July 1, 1996.