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10  AN ACT concerning retirement and pensions; relating to the Kansas pub-
11    lic employees retirement system and systems thereunder; district
12    magistrate judges; state school retirement system; benefits and con-
13    tributions; arrearages; prior and participating service credit; hearing
14    officers; definitions; life insurance; survivor provisions; amending
15    K.S.A. 20-2610, 20-2620 and 72-5501 and K.S.A. 1996 Supp. 20-
16    2601, 74-4902, 74-4904, 74-4908, 74-4910, 74-4911f, 74-4913, 74-
17    4914, 74-4914e, 74-4919a, 74-4919c, 74-4919h, 74-4920, 74-4957,
18    74-4957a and 74-4990 and repealing the existing sections.
19
20  Be it enacted by the Legislature of the State of Kansas:
21    Section 1.  K.S.A. 1996 Supp. 20-2601 is hereby amended to
22  read as follows: 20-2601. As used in K.S.A. 20-2601 et seq. and
23  amendments thereto, unless the context otherwise requires:
24    (a)  ``Fund'' means the Kansas public employees retirement
25  fund created by K.S.A. 74-4921 and amendments thereto;
26    (b)  ``retirement system for judges'' means the system provided
27  for in the acts contained in article 26 of chapter 20 of the Kansas
28  Statutes Annotated and any acts amendatory thereof or supple-
29  mental thereto;
30    (c)  ``judge'' means any duly elected or appointed justice of the
31  supreme court, judge of the court of appeals or judge of any dis-
32  trict court of Kansas, who serves in such capacity on and after the
33  effective date of this act and commencing with the first day of the
34  first payroll period of the fiscal year ending June 30, 1994, any
35  district magistrate judge who makes an election as provided in
36  K.S.A. 20-2620 and amendments thereto or who is elected or ap-
37  pointed on or after July 1, 1993;
38    (d)  ``member'' means a judge who is making the required con-
39  tributions to the fund, or any former judge who has made the re-
40  quired contributions to the fund and has not received a refund of
41  the judge's accumulated contributions;
42    (e)  ``prior service'' means all the periods of time any judge has
43  served in such capacity prior to the effective date of this act except
HB 2238--Am.
                                     

 1  that district magistrate judges who have service credit under the
 2  Kansas public employees retirement system must make application
 3  to the board and make payment as required by the board to trans-
 4  fer service credit from the Kansas public employees retirement
 5  system to the retirement system for judges;
 6    (f)  ``current service'' means the period of service any judge
 7  serves in such capacity from and after the effective date of this act;
 8    (g)  ``military service'' means active service of any judge in any
 9  of the armed forces of the United States or in the United States
10  public health service prior or subsequent to the effective date of
11  this act, provided such service commenced while such judge was
12  holding the office of judge. The board has the power to determine
13  when a national emergency exists or has existed for the purpose
14  of applying this definition and provision;
15    (h)  ``total years of service'' means the total number of years
16  served as a judge, including prior service, military service and cur-
17  rent service as defined by this section, computed to the nearest
18  quarter;
19    (i)  ``salary'' means the statutory salary of a judge;
20    (j)  ``final average salary'' means that determined as provided
21  in subsection (b) of K.S.A. 20-2610 and amendments thereto;
22    (k)  ``beneficiary'' means any natural person or persons or es-
23  tate designated by a judge in the latest designation of beneficiary
24  received in the retirement system office to receive any benefits as
25  provided for by this act. Except as provided in subsection (n), if
26  there is no named beneficiary living at the time of the judge's
27  death, any benefits provided for by this act shall be paid to: (1)
28  The judge's surviving spouse; (2) the judge's dependent child or
29  children; (3) the judge's dependent parent or parents; (4) the jud-
30  ge's nondependent child or children; (5) the judge's nondependent
31  parent or parents; (6) the estate of the deceased member; in the
32  order of preference as specified in this subsection. Any payment
33  made to a named beneficiary shall be a full discharge and release to the
34  system from any further claims. Any payment made to a beneficiary as
35  provided in clauses (1), (2), (3), (4), (5) or (6) of this subsection, as de-
36  termined by the board, shall be a full discharge and release to the system
37  from any further claims. Whenever any payment is payable to more than
38  one beneficiary such payment shall be made to such beneficiaries jointly.
39  Any benefits payable to a beneficiary or beneficiaries who are minor chil-
40  dren or incompetent persons shall be made in the name of the beneficiary
41  or beneficiaries and delivered to the lawfully appointed conservator of
42  such beneficiaries who was nominated by will or as otherwise provided
43  by law, except that in those cases where the benefit involves only the
HB 2238--Am.
                                     

 1  payment of the judge's accumulated contributions with interest as pro-
 2  vided by this act in an amount not to exceed $500, the board is hereby
 3  authorized in its discretion without the appointment of a conservator or
 4  the giving of a bond to pay such amount as is due to the minor or minors
 5  themselves, any payment so made shall be a full discharge and release to
 6  the system from any further claims. Effective January 1, 1998, a member
 7  may designate a beneficiary or beneficiaries for any death benefits payable
 8  under the provisions of K.S.A. 74-4927 through 74-4927h, and amend-
 9  ments thereto, which are different from any beneficiary or beneficiaries
10  the member may have designated for any other benefits. Designations
11  of beneficiaries by a member who is a member of more than one
12  retirement system made on or after July 1, 1987, shall be the basis
13  of any benefits payable under all systems unless otherwise pro-
14  vided by law;
15    (l)  ``annuity'' means a series of equal monthly payments, pay-
16  able at the end of each calendar month during the life of a retired
17  judge, of which payments the first payment shall be made as of the
18  end of the calendar month in which such annuity was awarded and
19  the last payment shall be at the end of the calendar month in which
20  such judge dies. The first payment shall include all amounts ac-
21  crued since the effective date of the award of annuities, including
22  a pro rata portion of the monthly amount of any fraction of a month
23  elapsing between the effective date of such annuity and the end
24  of the calendar month in which such annuity began;
25    (m)  ``board'' means the board of trustees of the Kansas public
26  employees retirement system;
27    (n)  ``trust'' means an express trust created by any trust instru-
28  ment, including a will, and designated by a member to receive
29  benefits and other amounts payable under K.S.A. 20-2607, 20-
30  2610a and 20-2612, and amendments thereto, instead of a bene-
31  ficiary. A designation of a trust shall be filed with the board. If
32  there is a designated trust at the time of the member's death, all
33  benefits and other amounts payable under K.S.A. 20-2607, 20-
34  2610a and 20-2612, and amendments thereto, shall be paid to the
35  trust instead of the member's beneficiary. If no will is admitted to
36  probate within six months after the death of the member or no
37  trustee qualifies within such six months or if the designated trust
38  fails, for any reason whatsoever, any benefits and other amounts
39  payable under K.S.A. 20-2607, 20-2610a and 20-2612, and amend-
40  ments thereto, shall be paid to the member's beneficiary and any
41  payments so made shall be a full discharge and release to the re-
42  tirement system for judges from any further claims;
43    (o)  ``accumulated contributions'' means the sum of all contri-
HB 2238--Am.
                                     

 1  butions by a member to the retirement system for judges which
 2  are credited to the member's account, with interest allowed
 3  thereon after June 30, 1982; and
 4    (p)  except as otherwise provided in K.S.A. 20-2601 et seq. and
 5  amendments thereto, words and phrases used in K.S.A. 20-2601 et
 6  seq. and amendments thereto shall have the same meanings as-
 7  cribed to them as are defined in K.S.A. 74-4902 and amendments
 8  thereto.
 9    Section 1. 2.  K.S.A. 20-2610 is hereby amended to read as follows:
10  20-2610. (a) (1) A judge who retires under K.S.A. 20-2608, and amend-
11  ments thereto, shall be entitled to receive an annual annuity payable in
12  monthly amounts subject to subsection (b), each monthly payment such
13  annual annuity of which shall be in an amount equal to the total of 5%
14  of the final average salary of the judge, determined as provided in sub-
15  section (b), multiplied by the number of the judge's years of service up
16  to 10 years, and 3.5% of the final average salary of the judge, determined
17  as provided in subsection (b), multiplied by the number of the judge's
18  years of service in excess of 10 years, but such monthly benefits annual
19  annuity shall not exceed 70% of the final average salary of such judge,
20  determined as provided in subsection (b). A judge who retires under
21  K.S.A. 20-2608 and amendments thereto, and who became a member of
22  the system after June 30, 1987, shall be entitled to receive an annual
23  annuity payable in monthly amounts subject to subsection (b), each
24  monthly payment such annual annuity of which shall be in an amount
25  equal to the total of 3.5% of the final average salary of the judge, deter-
26  mined as provided in subsection (b), multiplied by the number of the
27  judge's years of service, but such monthly benefits annual annuity shall
28  not exceed 70% of the final average salary of the judge, determined as
29  provided in subsection (b).
30    (2)  For purposes of this subsection, the date of membership
31  for a district magistrate judge who became a member of the system
32  as provided by K.S.A. 20-2620 and amendments thereto and who
33  purchased service as provided in subsection (c) of K.S.A. 20-2620
34  and amendments thereto shall be the day such district magistrate
35  judge became a district magistrate judge and if such district mag-
36  istrate judge's membership date as determined in this subsection
37  is earlier than July 1, 1987, such district magistrate judge shall be
38  entitled to the 5% of final average salary calculation for up to 10
39  years of service as provided in this subsection. Any additional cost
40  associated with the provisions of this subsection shall be paid by
41  such district magistrate judge by means of a single lump-sum pay-
42  ment. No participating employer shall pay all or any part of any
43  cost associated with the provisions of this subsection.
HB 2238--Am.
                                     

 1    (b)  For any judge who retires under K.S.A. 20-2608 or 20-2609, and
 2  amendments thereto, on or after July 1, 1975, the annuity shall be based
 3  on the final average salary of such judge as provided in this subsection.
 4  The final average salary of a judge who becomes permanently physically
 5  or mentally disabled and who is retired under K.S.A. 20-2608 or 20-2609,
 6  and amendments thereto, shall be determined as if such judge had retired
 7  on the date such judge became permanently physically or mentally disa-
 8  bled. The final average salary of a former judge whose service is termi-
 9  nated without retiring and who later retires under K.S.A. 20-2608, and
10  amendments thereto, shall be determined as if such former judge had
11  retired at the time such service was terminated.
12    In the case of judges who retire on or after July 1, 1993, the final
13  average salary shall mean the average highest annual salary paid to the
14  judge for any three years of the last 10 years of service as a judge im-
15  mediately preceding retirement or termination of employment, or if serv-
16  ice as a judge is less than three years, then the final average salary shall
17  be the average annual salary paid to the judge during the full period of
18  service as a judge, or if service as a judge is less than one year, then the
19  final average salary shall be computed by multiplying the amount of
20  monthly salary such judge was receiving at the time of retirement by 12.
21    (c)  The provisions of law in effect on the retirement date of a judge
22  under the retirement system for judges shall govern the retirement ben-
23  efit payable to the judge, any joint annuitant and any beneficiary.
24    (d)  A judge who retires under K.S.A. 20-2608, and amendments
25  thereto, and who, after such retirement, again is appointed or elected as
26  a judge, shall have the judge's retirement annuity suspended as provided
27  in this subsection. Such judge shall become an active member and make
28  employee contributions to the system and receive service credit for any
29  service after the date of commencement of service in such position. Upon
30  again retiring, any credited service such member subsequently accrues
31  shall be added to all previous service and the retirement annuity shall be
32  recalculated in accordance with the provisions of this section.
33    Sec. 3.  K.S.A. 20-2620 is hereby amended to read as follows:
34  20-2620. (a) Except as otherwise provided, each district magistrate
35  judge holding such position on the effective date of this act may
36  become a member of the retirement system for judges on the first
37  day of the payroll period of the fiscal year ending June 30, 1994,
38  only by filing with the board of trustees of the Kansas public em-
39  ployees retirement system on or before the first day of the payroll
40  period of the fiscal year ending June 30, 1994, a written election
41  to become a member of the system. Failure to file such written
42  election shall be presumed to be an election not to become a mem-
43  ber of the system. Such election, whether to become a member or
HB 2238--Am.
                                     

 1  not to become a member, shall be irrevocable. In addition, any
 2  such district magistrate judge who makes the election previously
 3  provided in this section, may elect to transfer such district magis-
 4  trate judge's service credit from the Kansas public employees re-
 5  tirement system as provided in subsection (e) of K.S.A. 20-2601
 6  and amendments thereto and subsection (c). The date of membership
 7  for a district magistrate judge who became a member of the system as
 8  provided in this section and who purchased service as provided in sub-
 9  section (c) shall be the day that such district magistrate judge became a
10  district magistrate judge.
11    (b)  Each person who becomes a district magistrate judge on or
12  after the effective date of this act shall become a member of the
13  retirement system for judges on the first day such person holds
14  the position of district magistrate judge.
15    (c)  The board of trustees of the Kansas public employees re-
16  tirement system shall transfer to the credit of the district magis-
17  trate judge under the retirement system for judges such amounts
18  as may be presently credited to a district magistrate judge's ac-
19  count for contribution under the Kansas public employees retire-
20  ment system and an equivalent amount to the employer's account
21  for contributions for such district magistrate judge whenever an
22  application for conversion of service under the Kansas public em-
23  ployees retirement system is received from a district magistrate
24  judge. Any district magistrate judge may purchase such service by
25  electing such purchase prior to retirement by means of a single
26  lump sum payment or equal annual payments for not to exceed
27  five years. The lump sum or annual payments shall be determined
28  by the system's actuary by using the member's final average salary
29  at the time of application, actuarial assumptions and tables cur-
30  rently in use by the system and the member's attained age. No
31  participating employer shall pay all or any part of the cost of serv-
32  ice credit purchased by a member under this section.
33    Sec. 2. 4.  K.S.A. 72-5501 is hereby amended to read as follows: 72-
34  5501. As used in this act, unless the context otherwise requires:
35    (a)  ``Retirement system'' means the state school retirement system;
36    (b)  ``board'' means the board of trustees of the Kansas public em-
37  ployees retirement system;
38    (c)  ``school year'' means either the twelve-month period beginning on
39  September first, or the legal school term during such period. In case of
40  doubt the board shall decide what constitutes a school year; but it shall
41  not give credit for a school year that represents less than 140 days, except
42  that the board may give credit for a school year if not less than 80 days
43  of actual service has been rendered and if continuance in school service
HB 2238--Am.
                                     

 1  was prevented by illness or other emergency beyond the control of the
 2  person entitled to such credit. No person shall receive credit for more
 3  than one school year during any twelve-month period beginning on Sep-
 4  tember 1. The board shall give credit for 1/2 of a school year for 1/2 school
 5  year of continuous full-time service;
 6    (d)  ``school employees'' means persons who have performed or who
 7  shall hereafter perform school services as classroom teachers, adminis-
 8  trators, supervisors, librarians, nurses, clerks, janitors, or in any other full-
 9  time capacity in the public schools, area vocational-technical schools or
10  community junior colleges of the state of Kansas and who are citizens of
11  the United States and it shall include (1) persons who have performed
12  service as a county superintendent of public instruction or as an employee
13  appointed by and under the supervision of a county superintendent, (2)
14  persons who have performed service as a state superintendent of public
15  instruction or as an employee appointed by and under supervision of a
16  state superintendent, (3) persons who have performed services as an em-
17  ployee appointed by the former state board for vocational education, ex-
18  cept that prior to the time of accepting such employment by such county
19  superintendent, state superintendent or state board for vocational edu-
20  cation such employees had performed school service in Kansas as a
21  teacher, principal, supervisor, or superintendent, (4) persons who are em-
22  ployees appointed by and under the supervision of the constitutional state
23  board of education, including those employees transferred to the state
24  department of education at its inception in January of 1969, and who
25  prior to the time of accepting such employment by the state board of
26  education had performed school service in Kansas as a teacher, principal,
27  supervisor, or superintendent, (5) the commissioner of education if such
28  commissioner exercises an option to be covered by the state school re-
29  tirement system in lieu of being covered by the Kansas public employees
30  retirement system, which option shall be exercised by written notice of
31  the commissioner of education at the time of appointment, such notice
32  to be directed to the state school retirement board and the board of
33  trustees of the Kansas public employees retirement system, (6) all instruc-
34  tional employees for the school for the blind and such employees shall
35  be excluded from participation in any other state retirement system, and
36    (7) teachers and supervisors of instruction at the state institutions under
37  the management of the director of penal institutions and those under the
38  management of the state board of social welfare which provide regular
39  classroom instruction for their inmates or patients if such instructional
40  personnel have valid certificates issued by the state board of education,
41  but excepting such employees who have elected or shall elect at the time
42  of employment by the institution to participate in the Kansas public em-
43  ployees retirement system. The term ``school employees'' shall not in-
HB 2238--Am.
                                     

 1  clude any employee while a member of a separate retirement system
 2  operated by any board of education but if any such employee at any time
 3  becomes eligible to participate in the state retirement as provided by this
 4  act, the years such person served in a school system in Kansas which
 5  maintains a separate retirement system shall be included in determining
 6  years of service of such person under this act. An employee performing
 7  service in a school system maintaining its own separate retirement system
 8  in Kansas may qualify for service credit in the state system by discontin-
 9  uing membership in such separate retirement system prior to the time of
10  retirement and accepting a position which is covered by the state retire-
11  ment system, and continuing in such service for at least one school year.
12  Such employee shall contribute to the state retirement system an amount
13  of money equal to that which was deducted from such employee's salary
14  for services rendered after September 1, 1941, in the city maintaining its
15  own retirement system and this amount shall be credited to the savings
16  account of the employee. If such employee was for any reason excluded
17  from participation in the separate retirement system, the board shall give
18  credit for such nonmember service in the public schools in the city main-
19  taining a separate retirement system without the required transfer of
20  funds. After September 1, 1971, no person shall be deemed a school
21  employee for the purposes of this act;
22    (e)  ``school service'' means: (1) Service performed as a school em-
23  ployee prior to September 1, 1941, if such years of service include at least
24  six months during the years 1938-39 or 1939-40 or 1940-41; service per-
25  formed by any employee who was not in school service in any of the school
26  years from 1938 to 1941, but who reentered school service after Septem-
27  ber 1, 1941, and continued in such service for at least five years; all service
28  prior to September 1, 1941, of any annuitant who retired prior to Sep-
29  tember 1, 1961, and who was granted a service annuity for one or more
30  years as a contributing member of the school retirement system; all serv-
31  ice prior to September 1, 1941, of any employee who served for at least
32  six months during one of the qualifying years from 1938 to 1941 in a
33  school system maintaining its own separate retirement system in Kansas,
34  if such employee has not qualified, nor will in the future qualify, for
35  retirement benefits under the separate retirement system; all service as
36  a school employee, including out-of-state service as a school employee,
37  for a period of 12 10 or more years prior to September 1, 1938, except
38  that service annuities paid by the state of Kansas to such school employees
39  shall not include such out-of-state service as a school employee, unless
40  otherwise provided by law; and (2) service as a school employee after
41  September 1, 1941, and prior to age 70 as a contributing member of the
42  school retirement system. No service credit shall be granted to a school
43  employee who established or shall hereafter establish membership later
HB 2238--Am.
                                     

 1  than September 1, 1941, for a period of time between September 1, 1941,
 2  and the date of becoming a contributing member of the retirement sys-
 3  tem. School service shall include only full-time employees, except that 1/2
 4  year of credit shall be given to instructional employees who perform
 5  school service on at least a 1/2 time basis throughout a school year. No
 6  school service credit shall be given in fractional units of less than 1/2 year.
 7  The board may grant service credit to employees, who were performing
 8  school service at the time of their induction into the armed forces of the
 9  United States, equal to the time spent in the armed forces between Sep-
10  tember 1, 1940, and September 1, 1947, and between June 25, 1950, and
11  July 27, 1953 and between August 5, 1964, and August 15, 1973, but no
12  such service credit shall be granted for a period of more than five years
13  spent in the armed forces between September 1, 1940, and September
14  1, 1947, or for a period of more than two years spent in the armed forces
15  between June 25, 1950, and July 27, 1953 or for a period of more than
16  two years spent in the armed forces between August 5, 1964 and August
17  15, 1973. In the event the employee served during the periods between
18  September 1, 1940, and September 1, 1947, and between June 25, 1950,
19  and July 27, 1953, such employee shall be granted a service credit for the
20  actual time spent in the armed forces between June 25, 1950, and July
21  27, 1953, nor shall such service credit be granted to any employee unless
22  such employee shall reenter school service and continue in such service
23  for at least one school year. The board may grant service credit to an
24  employee who was performing school service prior to the time of becom-
25  ing employed as a veterans' instructional on-the-farm training instructor
26  equal to the time spent as such instructor between the dates of September
27  1, 1946, and September 1, 1961. The board may grant service credit to
28  an employee who prior to performing school service was a faculty member
29  of the Kansas vocational school at Topeka, known part of the time as the
30  Kansas technical institute, which operated under the Kansas state board
31  of regents prior to 1956 equal to the time spent as instructor at such
32  school. In case of doubt the board shall decide what constitutes school
33  service;
34    (f)  ``school annuitant'' means any person who is entitled to receive a
35  school annuity;
36    (g)  ``school annuity'' means the monthly payments due to any school
37  annuitant. Such payments shall continue for life, and be paid in monthly
38  installments;
39    (h)  ``service annuity'' means that part of the school annuity which is
40  based upon the service record of the person concerned, and which is paid
41  by the state;
42    (i)  ``savings annuity'' means that part of the school annuity which re-
43  sults from the accumulated contributions of the school employee and
HB 2238--Am.
                                     

 1  interest thereon less the proportionate share of the expense of the ad-
 2  ministration of this act;
 3    (j)  ``disability annuity'' means a school annuity granted to a school
 4  employee who suffers such physical or mental disability as to be unable
 5  to perform school service;
 6    (k)  ``standard annuity'' means the school annuity which is granted to
 7  a school employee at the age of 65 years, as prescribed by this act; the
 8  standard annuity shall be used as the basis in computing actuarially equiv-
 9  alent annuities granted at ages prior to 65 years;
10    (l)  ``service record'' means the individual record kept by the board
11  for each school employee. It shall show the number of school years of
12  school service, the salary or wages earned, the date of birth, and such
13  other data as the board may require;
14    (m)  ``age'' and ``attained age'' shall be computed as of September 1
15  of the calendar year under consideration;
16    (n)  ``deductions'' means the amounts withheld, as provided in this act,
17  from warrants issued in payment for school services; and
18    (o)  ``actuarial computation'' means computation in accordance with
19  some standard actuarial table. The board shall determine which one of
20  the standard actuarial tables shall be used. The legal minimum standard
21  for the valuation of annuities shall be McClintock's ``table of mortality
22  among annuitants,'' with interest at 2% per annum.
23    Sec. 5.  K.S.A. 1996 Supp. 74-4902 is hereby amended to read
24  as follows: 74-4902. As used in articles 49 and 49a of chapter 74
25  and amendments thereto, unless otherwise provided or the context
26  otherwise requires:
27    (1)  ``Accumulated contributions'' means the sum of all contri-
28  butions by a member to the system which are credited to the mem-
29  ber's account, with interest allowed thereon;
30    (2)  ``acts'' means K.S.A. 74-4901 to 74-4929, inclusive, and
31  amendments thereto;
32    (3)  ``actuarial equivalent'' means an annuity or benefit of equal
33  value to the accumulated contributions, annuity or benefit, when
34  computed upon the basis of the actuarial tables in use by the sys-
35  tem;
36    (4)  ``actuarial tables'' means the actuarial tables approved and
37  in use by the board at any given time;
38    (5)  ``actuary'' means the actuary or firm of actuaries employed
39  or retained by the board at any given time;
40    (6)  ``agent'' means the individual designated by each partici-
41  pating employer through whom system transactions and commu-
42  nication are directed;
43    (7)  ``beneficiary'' means any natural person or persons or es-
HB 2238--Am.
                                     

 1  tate named by a member to receive any benefits as provided for
 2  by this act. Designations of beneficiaries by a member who is a
 3  member of more than one retirement system made on or after July
 4  1, 1987, shall be the basis of any benefits payable under all systems
 5  unless otherwise provided by law. Effective January 1, 1998, a member
 6  may designate a beneficiary or beneficiaries for any death benefits payable
 7  under the provisions of K.S.A. 74-4927 through 74-4927h, and amend-
 8  ments thereto, which are different from any beneficiary or beneficiaries
 9  the member may have designated for any other benefits. Except as oth-
10  erwise provided by subsection (33) of this section, if there is no
11  named beneficiary living at time of member's death, any benefits
12  provided for by this act shall be paid to: (A) The member's surviv-
13  ing spouse; (B) the member's dependent child or children; (C) the
14  member's dependent parent or parents; (D) the member's non-
15  dependent child or children; (E) the member's nondependent par-
16  ent or parents; (F) the estate of the deceased member; in the order
17  of preference as specified in this subsection. Any payment made to
18  a named beneficiary shall be a full discharge and release to the system
19  from any further claims. Any payment made to a beneficiary as provided
20  in clauses (A), (B), (C), (D), (E) or (F) of this subsection, as determined
21  by the board, shall be a full discharge and release to the system from any
22  further claims. Whenever any payment is payable to more than one ben-
23  eficiary such payment shall be made to such beneficiaries jointly. Any
24  benefits payable to a beneficiary or beneficiaries who are minor children
25  or incompetent persons shall be made in the name of the beneficiary or
26  beneficiaries and delivered to the lawfully appointed conservator of such
27  beneficiaries who was nominated by will or as otherwise provided by law,
28  except that in those cases where the benefit involves only the payment of
29  the member's accumulated contributions with interest as provided by this
30  act in an amount not to exceed $500, the board is hereby authorized in
31  its discretion without the appointment of a conservator or the giving of a
32  bond to pay such amount as is due to the minor or minors themselves,
33  any payment so made shall be a full discharge and release to the system
34  from any further claims;
35    (8)  ``board of trustees,'' ``board'' or ``trustees'' means the man-
36  aging body of the system which is known as the Kansas public em-
37  ployees retirement system board of trustees;
38    (9)  ``compensation'' means all salary, wages and other remu-
39  neration payable to a member for personal services performed for
40  a participating employer, including maintenance or any allowance
41  in lieu thereof provided a member as part of compensation, but
42  not including reimbursement for travel or moving expenses or on
43  and after July 1, 1994, payment pursuant to an early retirement
HB 2238--Am.
                                     

 1  incentive program made prior to the retirement of the member.
 2  Beginning with the employer's fiscal year which begins in calendar
 3  year 1991 or for employers other than the state of Kansas, begin-
 4  ning with the fiscal year which begins in calendar year 1992, when
 5  the compensation of a member who remains in substantially the
 6  same position during any two consecutive years of participating
 7  service used in calculating final average salary is increased by an
 8  amount which exceeds 15%, then the amount of such increase
 9  which exceeds 15% shall not be included in compensation, except
10  that (A) any amount of compensation for accumulated sick leave
11  or vacation or annual leave paid to the member, (B) any increase
12  in compensation for any member due to a reclassification or real-
13  location of such member's position or a reassignment of such mem-
14  ber's job classification to a higher range or level and (C) any in-
15  crease in compensation as provided in any contract entered into
16  prior to January 1, 1991, and still in force on the effective date of
17  this act, pursuant to an early retirement incentive program as pro-
18  vided in K.S.A. 72-5395 et seq. and amendments thereto, shall be
19  included in the amount of compensation of such member used in
20  determining such member's final average salary and shall not be
21  subject to the 15% limitation provided in this subsection. Any con-
22  tributions by such member on the amount of such increase which
23  exceeds 15% which is not included in compensation shall be re-
24  turned to the member. Unless otherwise provided by law, begin-
25  ning with the employer's fiscal year coinciding with or following
26  July 1, 1985, compensation shall include any amounts for tax shel-
27  tered annuities or deferred compensation plans. Beginning with
28  the employer's fiscal year which begins in calendar year 1991,
29  compensation shall include amounts under sections 403b, 457 and
30  125 of the federal internal revenue code of 1986 and, as the board
31  deems appropriate, any other section of the federal internal revenue
32  code of 1986 which defers or excludes amounts from inclusion in
33  income;
34    (10)  ``credited service'' means the sum of participating service
35  and prior service and in no event shall credited service include any
36  service which is credited under another retirement plan author-
37  ized under any law of this state;
38    (11)  ``dependent'' means a parent or child of a member who is
39  dependent upon the member for at least 1/2 of such parent or
40  child's support;
41    (12)  ``effective date'' means the date upon which the system
42  becomes effective by operation of law;
43    (13)  ``eligible employer'' means the state of Kansas, and any
HB 2238--Am.
                                     

 1  county, city, township, special district or any instrumentality of any
 2  one or several of the aforementioned or any noncommercial public
 3  television or radio station located in this state which receives state
 4  funds allocated by the Kansas public broadcasting commission
 5  whose employees are covered by social security. If a class or sev-
 6  eral classes of employees of any above defined employer are not
 7  covered by social security, such employer shall be deemed an eli-
 8  gible employer only with respect to such class or those classes of
 9  employees who are covered by social security;
10    (14)  ``employee'' means any appointed or elective officer or
11  employee of a participating employer whose employment is not
12  seasonal or temporary and whose employment requires at least
13  1,000 hours of work per year, but not including: (A) Any person
14  covered by or eligible for or who will become eligible for a retire-
15  ment annuity under the provisions of K.S.A. 74-4925 and amend-
16  ments thereto except as otherwise specifically provided in subsec-
17  tion (3) of K.S.A. 74-4925 and amendments thereto and this
18  subsection; (B) any employee who is a contributing member of the
19  United States civil service retirement system; (C) any employee of
20  an eligible employer who is a participant in public service em-
21  ployment under title II and title VI of the federal comprehensive
22  employment and training act of 1973; (D) any employee or class
23  of employees specifically exempted by law. After June 30, 1975, no
24  person who is otherwise eligible for membership in the Kansas
25  public employees retirement system shall be barred from such
26  membership by reason of coverage by, eligibility for or future el-
27  igibility for a retirement annuity under the provisions of K.S.A. 74-
28  4925 and amendments thereto, except that no person shall receive
29  service credit under the Kansas public employees retirement sys-
30  tem for any period of service for which benefits accrue or are
31  granted under a retirement annuity plan under the provisions of
32  K.S.A. 74-4925 and amendments thereto. After June 30, 1982, no
33  person who is otherwise eligible for membership in the Kansas
34  public employees retirement system shall be barred from such
35  membership by reason of coverage by, eligibility for or future el-
36  igibility for any benefit under another retirement plan authorized
37  under any law of this state, except that no such person shall receive
38  service credit under the Kansas public employees retirement sys-
39  tem for any period of service for which any benefit accrues or is
40  granted under any such retirement plan. Employee shall include
41  persons who are in training at or employed by, or both, a sheltered
42  workshop for the blind operated by the secretary of social and
43  rehabilitation services. The entry date for such persons shall be
HB 2238--Am.
                                     

 1  the beginning of the first pay period of the fiscal year commencing
 2  in calendar year 1986. Such persons shall be granted prior service
 3  credit in accordance with K.S.A. 74-4913 and amendments thereto.
 4  However, such persons classified as home industry employees shall
 5  not be covered by the retirement system;
 6    (15)  ``entry date'' means the date as of which an eligible em-
 7  ployer joins the system. The first entry date pursuant to this act is
 8  January 1, 1962;
 9    (16)  ``executive secretary'' means the managing officer of the
10  system employed by the board under this act;
11    (17)  ``final average salary'' means in the case of a member who
12  retires prior to January 1, 1977, and in the case of a member who
13  retires after January 1, 1977, and who has less than five years of
14  participating service after January 1, 1967, the average highest
15  annual compensation paid to such member for any five years of
16  the last 10 years of participating service immediately preceding
17  retirement or termination of employment, or in the case of a mem-
18  ber who retires on or after January 1, 1977, and who has five or
19  more years of participating service after January 1, 1967, the av-
20  erage highest annual compensation paid to such member on or
21  after January 1, 1967, for any five years of participating service
22  preceding retirement or termination of employment, or, in any
23  case, if participating service is less than five years, then the average
24  annual compensation paid to the member during the full period
25  of participating service, or, in any case, if the member has less than
26  one calendar year of participating service such member's final av-
27  erage salary shall be computed by multiplying such member's
28  highest monthly salary received in that year by 12; in the case of
29  a member who became a member under subsection (3) of K.S.A.
30  74-4925 and amendments thereto, or who became a member with
31  a participating employer as defined in subsection (3) of K.S.A. 74-
32  4931 and amendments thereto and who elects to have compensa-
33  tion paid in other than 12 equal installments, such compensation
34  shall be annualized as if the member had elected to receive 12
35  equal installments for any such periods preceding retirement; in
36  the case of a member who retires after July 1, 1987, the average
37  highest annual compensation paid to such member for any four
38  years of participating service preceding retirement or termination
39  of employment; in the case of a member who retires on or after
40  July 1, 1993, who was first hired as an employee, as defined in
41  subsection (14) of K.S.A. 74-4902 and amendments thereto, prior
42  to July 1, 1993, the average highest annual compensation, as de-
43  fined in subsection (9), paid to such member for any four years of
HB 2238--Am.
                                     

 1  participating service preceding retirement or termination of em-
 2  ployment or the average highest annual salary, as defined in sub-
 3  section (34), paid to such member for any three years of partici-
 4  pating service preceding retirement or termination of
 5  employment, whichever is greater; and in the case of a member
 6  who retires on or after July 1, 1993, and who is first hired as an
 7  employee, as defined in subsection (14) of K.S.A. 74-4902 and
 8  amendments thereto, on or after July 1, 1993, the average highest
 9  annual salary, as defined in subsection (34), paid to such member
10  for any three years of participating service preceding retirement
11  or termination of employment. Final average salary shall not in-
12  clude any purchase of participating service credit by a member as
13  provided in subsection (2) of K.S.A. 74-4919h and amendments
14  thereto which is completed within five years of retirement. For
15  any application to purchase or repurchase service credit for a cer-
16  tain period of service as provided by law received by the system
17  after May 17, 1994, for any member who will have contributions
18  deducted from such member's compensation at a percentage rate
19  equal to two or three times the employee's rate of contribution or
20  will begin paying to the system a lump-sum amount for such mem-
21  ber's purchase or repurchase and such deductions or lump-sum
22  payment commences after the commencement of the first payroll
23  period in the third quarter, ``final average salary'' shall not include
24  any amount of compensation or salary which is based on such
25  member's purchase or repurchase. Any application to purchase or
26  repurchase multiple periods of service shall be treated as multiple
27  applications. For purposes of this subsection, the date that such
28  member is first hired as an employee for members who are em-
29  ployees of employers that elected to participate in the system on
30  or after January 1, 1994, shall be the date that such employee's
31  employer elected to participate in the system;
32    (18)  ``fiscal year'' means, for the Kansas public employees re-
33  tirement system, the period commencing July 1 of any year and
34  ending June 30 of the next;
35    (19)  ``Kansas public employees retirement fund'' means the
36  fund created by this act for payment of expenses and benefits un-
37  der the system and referred to as the fund;
38    (20)  ``leave of absence'' means a period of absence from em-
39  ployment without pay, authorized and approved by the employer,
40  and which after the effective date does not exceed one year;
41    (21)  ``member'' means an eligible employee who is in the sys-
42  tem and is making the required employee contributions, or; any
43  former employee who has made the required contributions to the
HB 2238--Am.
                                     

 1  system and has not received a refund, if such member is within five
 2  years of their termination of employment with a participating employer;
 3  or any former employee who has made the required contributions to the
 4  system, has not received a refund and has been granted a vested benefit;
 5    (22)  ``military service'' means service in the armed forces of the
 6  United States or in the commissioned corps of the United States pub-
 7  lic health service, which service is immediately preceded by a pe-
 8  riod of employment as an employee or by the entering into of an
 9  employment contract with a participating employer and is fol-
10  lowed by return to employment as an employee with the same or
11  another participating employer within 12 months immediately fol-
12  lowing discharge from such military service, except that if the
13  board determines that such return within 12 months was made
14  impossible by reason of a service-connected disability, the period
15  within which the employee must return to employment with a par-
16  ticipating employer shall be extended not more than two years
17  from the date of discharge or separation from military service;
18    (23)  ``normal retirement date'' means the date on or after
19  which a member may retire with full retirement benefits pursuant
20  to K.S.A. 74-4914 and amendments thereto;
21    (24)  ``participating employer'' means an eligible employer who
22  has agreed to make contributions to the system on behalf of its
23  employees;
24    (25)  ``participating service'' means the period of employment
25  after the entry date for which credit is granted a member;
26    (26)  ``prior service'' means the period of employment of a
27  member prior to such member's the entry date for which credit is
28  granted a member under this act;
29    (27)  ``prior service annual salary'' means the highest annual
30  salary, not including any amounts received as payment for over-
31  time or as reimbursement for travel or moving expense, received
32  for personal services by the member from the current employer
33  in any one of the three calendar years immediately preceding Jan-
34  uary 1, 1962, or the entry date of the employer, whichever is later,
35  except that if a member entered the employment of the state dur-
36  ing the calendar year 1961, the prior service annual salary shall
37  be computed by multiplying such member's highest monthly salary
38  received in that year by 12;
39    (28)  ``retirant'' means a member who has retired under this
40  system;
41    (29)  ``retirement benefit'' means a monthly income or the ac-
42  tuarial equivalent thereof paid in such manner as specified by the
43  member pursuant to this act or as otherwise allowed to be paid at
HB 2238--Am.
                                     

 1  the discretion of the board, with benefits accruing from the first
 2  day of the month coinciding with or following retirement and end-
 3  ing on the last day of the month in which death occurs. Upon
 4  proper identification a surviving spouse may negotiate the warrant
 5  issued in the name of the retirant;
 6    (30)  ``retirement system'' or ``system'' means the Kansas public
 7  employees retirement system as established by this act and as it
 8  may be amended;
 9    (31)  ``social security'' means the old age, survivors and disabil-
10  ity insurance section of the federal social security act;
11    (32)  ``total disability'' means a physical or mental disability
12  which prevents the member from engaging, for remuneration or
13  profit, in any occupation for which the member is reasonably
14  suited by education, training or experience;
15    (33)  ``trust'' means an express trust, created by a trust instru-
16  ment, including a will, designated by a member to receive payment
17  of the insured death benefit under K.S.A. 74-4927 and amend-
18  ments thereto and payment of the member's accumulated contri-
19  butions under subsection (1) of K.S.A. 74-4916 and amendments
20  thereto. A designation of a trust shall be filed with the board. If
21  there is a designated trust at the time of the member's death, the
22  insured death benefit for the member under K.S.A. 74-4927 and
23  amendments thereto and the member's accumulated contributions
24  under subsection (1) of K.S.A. 74-4916 and amendments thereto
25  shall be paid to the trust in lieu of the member's beneficiary. If no
26  will is admitted to probate within six months after the death of the
27  member or no trustee qualifies within such six months or if the
28  designated trust fails, for any reason whatsoever, the insured death
29  benefit under K.S.A. 74-4927 and amendments thereto and the
30  member's accumulated contributions under subsection (1) of
31  K.S.A. 74-4916 and amendments thereto shall be paid in accor-
32  dance with the provisions of subsection (7) of this section as in
33  other cases where there is no named beneficiary living at the time
34  of the member's death and any payments so made shall be a full
35  discharge and release to the system from any further claims; and
36    (34)  ``salary'' means all salary and wages payable to a member
37  for personal services performed for a participating employer, in-
38  cluding maintenance or any allowance in lieu thereof provided a
39  member as part of salary. Salary shall not include reimbursement
40  for travel or moving expenses, payment for accumulated sick leave
41  or vacation or annual leave, severance pay or any other payments
42  to the member determined by the board to not be payments for
43  personal services performed for a participating employer consti-
HB 2238--Am.
                                     

 1  tuting salary or on and after July 1, 1994, payment pursuant to an
 2  early retirement incentive program made prior to the retirement
 3  of the member. When the salary of a member who remains in sub-
 4  stantially the same position during any two consecutive years of
 5  participating service used in calculating final average salary is in-
 6  creased by an amount which exceeds 15%, then the amount of such
 7  increase which exceeds 15% shall not be included in salary. Any
 8  contributions by such member on the amount of such increase
 9  which exceeds 15% which is not included in compensation shall be
10  returned to the member. Unless otherwise provided by law, salary
11  shall include any amounts for tax sheltered annuities or deferred
12  compensation plans. Salary shall include amounts under sections
13  403b, 457 and 125 of the federal internal revenue code of 1986
14  and, as the board deems appropriate, any other section of the federal
15  internal revenue code of 1986 which defers or excludes amounts
16  from inclusion in income. In any case, if participating service is
17  less than three years, then the average annual salary paid to the
18  member during the full period of participating service, or, in any
19  case, if the member has less than one calendar year of participating
20  service such member's final average salary shall be computed by
21  multiplying such member's highest monthly salary received in that
22  year by 12.
23    Sec. 3. 6.  K.S.A. 1996 Supp. 74-4904 is hereby amended to read as
24  follows: 74-4904. (1) The system may sue and be sued in its official name,
25  but its trustees, officers, employees and agents shall not be personally
26  liable for acts of the system unless such person acted with willful, wanton
27  or fraudulent misconduct or intentionally tortious conduct. Any agree-
28  ment in settlement of litigation involving the system and the investment
29  of moneys of the fund is a public record as provided in K.S.A. 45-215 et
30  seq. and amendments thereto and subject to the provisions of that act.
31  The service of all legal process and of all notices which may be required
32  to be in writing, whether legal proceedings or otherwise, shall be had on
33  the executive secretary at such executive secretary's office. All actions or
34  proceedings directly or indirectly against the system shall be brought in
35  Shawnee county.
36    (2)   Any person aggrieved by any order or decision of the board made
37  without a hearing, may, within 30 days after notice of the order or decision
38  of the board make written request to the board for a hearing thereon.
39  The board shall hear such party or parties in accordance with the provi-
40  sions of the Kansas administrative procedure act at its next regular meet-
41  ing or at a special meeting within 60 days after receipt of such request.
42  For the purpose of any hearing under this section, the board may appoint
43  one or more presiding officers. Any such presiding officer shall be a mem-
HB 2238--Am.
                                     

 1  ber of the board or, an employee of the board or any other person des-
 2  ignated by the board to serve as such presiding officer. Any such appoint-
 3  ment shall apply to a particular hearing or to a set or class of hearings as
 4  specified by the board in making such appointment. The board shall re-
 5  view an initial order resulting from a hearing under this section. Any
 6  member of the board who serves as a presiding officer shall be reim-
 7  bursed for actual and necessary expenses and shall receive compensation
 8  in an amount fixed by the board not to exceed the per diem compensation
 9  allowable for members of the board. The board is hereby authorized to
10  enter into a contract with any other person designated by the board to
11  serve as a presiding officer who is not a member of the board to provide
12  for reimbursement for actual and necessary expenses and compensation
13  for such person serving as a presiding officer.
14    Sec. 7.  K.S.A. 1996 Supp. 74-4908 is hereby amended to read
15  as follows: 74-4908. (1) The board shall appoint an executive sec-
16  retary and shall establish the compensation therefor. Subject to
17  the direction of the board, the executive secretary shall be the
18  managing officer of the system and as such shall have charge of
19  the office, records and supervision and direction of the employees
20  of the system. The executive secretary shall be in the unclassified
21  service under the Kansas civil service act.
22    (2)  The executive secretary shall recommend to the board the
23  administrative organization, the number and qualifications of em-
24  ployees necessary to carry out the intent of this act and the direc-
25  tions of the board. Upon approval of the board, the executive sec-
26  retary is authorized to employ such persons in accordance with the
27  Kansas civil service act.
28    (3)  The board of trustees shall select and employ or retain a
29  qualified actuary who shall serve at its pleasure as its technical
30  advisor on matters regarding operation of the system. The actuary
31  shall:
32    (a)  Make an annual valuation of the liabilities and reserves of
33  the system, and a determination of the contributions required by
34  the system to discharge its liabilities and administrative costs un-
35  der this act, and recommend to the board rates of employer con-
36  tributions required to establish and maintain the system on an ac-
37  tuarial reserve basis. Such recommended employer contributions
38  shall not be based on any other purpose outside of the needs of
39  the system as prescribed by this subsection.
40    (b)  As soon after the effective date as practicable and once
41  every three years thereafter, make a general investigation of the
42  actuarial experience under the system including mortality, retire-
43  ment, employment turnover and interest, and recommend actu-
HB 2238--Am.
                                     

 1  arial tables for use in valuations and in calculating actuarial equiv-
 2  alent values based on such investigation.
 3    (c)  Cooperate with and provide any assistance to the actuary,
 4  the legislative coordinating council and the joint committee on
 5  pensions, investments and benefits related to the independent ac-
 6  tuarial audit and evaluation as provided in K.S.A. 1996 Supp. 74-
 7  4908a and amendments thereto.
 8    (d)  Perform such other duties as may be assigned by the board.
 9    (4)  The attorney general of the state shall furnish such legal
10  services as may be necessary upon receipt of a request from the
11  board, except that legal services may be furnished by other counsel
12  as the board in its discretion deems necessary and prudent.
13    (5)  The board shall employ or retain qualified investment
14  counsel or counselors or may negotiate with a trust company to
15  assist and advise in the judicious investment of funds as herein
16  provided.
17    (6)  The board may appoint a deputy executive secretary, an in-
18  vestment officer, an investment analyst, a real estate manager, a
19  direct placement manager, a chief fiscal officer, a member services
20  officer, an attorney, an assistant investment officer and an infor-
21  mation resource officer to advise and assist the board in the per-
22  formance of powers, duties and functions relating to the manage-
23  ment and investment of the fund and in such other matters as may
24  be directed by the board. Such appointed officers and employees
25  shall be in the unclassified service under the Kansas civil service
26  act. The compensation of such appointed officers and employees
27  shall be established by the board.
28    Sec. 4. 8.  K.S.A. 1996 Supp. 74-4910 is hereby amended to read as
29  follows: 74-4910. (1) An eligible employer may join the system on January
30  1 of any year. Application for affiliation shall be in the form of a resolution
31  approved by the governing or legislative body of the eligible employer or
32  by any other body or officer authorized by law or recognized by the board
33  to approve the action. No city or township shall become a participating
34  employer except by the adoption of a resolution therefor, which shall be
35  published once in the official city or township newspaper or, if there is
36  none, in a newspaper of general circulation in the city or county. No such
37  resolution shall take effect until 60 days after its final publication. If within
38  60 days of its final publication a petition signed by electors equal in num-
39  ber to not less than 10% of the electors who voted at the last preceding
40  regular election in the township, in the case of townships, the last regular
41  city election in the city, in the case of cities is filed in the office of the
42  clerk of such city, or township demanding that such resolution be sub-
43  mitted to a vote of the electors, the resolution shall not take effect until
HB 2238--Am.
                                     

 1  submitted to a referendum and approved by a majority of the electors
 2  voting thereon. A 2/3 vote of the members-elect of the governing body
 3  shall be necessary for the affiliation of any eligible employer other than
 4  a city or township. An application for affiliation with the system shall be
 5  filed with the board not later than 30 days prior to the date participation
 6  is to begin, except as such time limit may be extended by the board. Upon
 7  the filing of a certified copy of such resolutions with the board an election
 8  pursuant to this section shall be irrevocable, and the employer shall be-
 9  come a participating employer on January 1 of the year immediately fol-
10  lowing the filing of such election with the board.
11    (2)  The state of Kansas in its capacity as an eligible employer, shall
12  become, by operation of law, a participating employer on the first entry
13  date. The Kansas turnpike authority shall not become a participating em-
14  ployer nor shall its officers or employees be covered by the retirement
15  system until such time as its governing body by a 2/3 vote of the members
16  of such governing body adopts a resolution for affiliation and files the
17  same in the same manner and on the same conditions as in the case of
18  an eligible employer other than a city or township.
19    (3)  If a participating employer is paying or has paid the salary or other
20  compensation of the judge, clerk or any other employee, whether elective
21  or appointive, such judge, clerk or other employee of such court or courts,
22  whether elective or appointive, shall be deemed an employee of the par-
23  ticipating employer. Such employee shall be governed by the provisions
24  governing other eligible employees of such participating employer. Any
25  participating employer which has not heretofore included such employees
26  as eligible employees under the retirement system shall on the first day
27  of the month coinciding with or following the effective date of this act
28  include such employees if otherwise eligible as eligible employees under
29  the retirement system. Such employees, whether elective or appointive,
30  if employed on the employer's entry date may elect to pay forthwith the
31  employee contributions from the employer's entry date and thereby be
32  governed by the provisions governing other employees employed by the
33  participating employer on entry date except that no such employee shall
34  be considered to be new employees on the first day of the month coin-
35  ciding with or following the effective date of this act and commence
36  making employee contributions in compliance with other provisions gov-
37  erning the retirement system and the participating employer shall make
38  the employer contributions in accordance with the alternative elected by
39  the employee and other provisions governing the retirement system.
40    (4)  Any employer whose employees are covered by social security and
41  who otherwise do not meet the provisions of subsection (13) of K.S.A.
42  74-4902 and amendments thereto may elect to affiliate under this section
43  upon meeting the definition of a governmental entity or instrumentality
HB 2238--Am.
                                     

 1  as determined by the system. If, subsequent to such determination, the
 2  United States internal revenue service determines that such employer
 3  does not meet the definition of a governmental entity or instrumentality,
 4  such affiliation shall be null and void and all employee accrued rights
 5  associated with such affiliation shall be null and void and the system shall
 6  refund such amounts presently credited to each employee's account and
 7  an equivalent amount to the employer for each employee. The provisions
 8  of this subsection shall apply to current and future participating employ-
 9  ers.
10    (5)  For affiliations on and after January 1, 1998, any eligible em-
11  ployer, prior to the filing of an application for affiliation under this system,
12  shall request the board of trustees to submit a proposal for such affiliation
13  including an estimate of the employer's contribution rate necessary to
14  comply with the actuarial standard of this system. Such eligible employer
15  shall furnish all necessary data from which such proposal is prepared,
16  and shall pay all costs involved.
17    Sec. 5. 9.  K.S.A. 1996 Supp. 74-4911f is hereby amended to read as
18  follows: 74-4911f. (a) Subject to procedures or limitations prescribed by
19  the governor, any state officer may elect to not become a member of the
20  system.
21    (b) (1)  Any such state officer described in subsection (a) who is a
22  member of the Kansas public employees retirement system, on or after
23  the effective date of this act, may elect to not be a member by filing an
24  election with the office of the retirement system. Each state officer filing
25  such election may withdraw the state officer's accumulated contributions
26  then on deposit with the system in the same manner as prescribed in
27  K.S.A. 74-4917 and amendments thereto for employees upon termina-
28  tion.
29    (2)  Any state officer who has filed an election and received a refund
30  of contributions shall be entitled to again become a member of the system
31  upon the filing of proper notice in such form as prescribed by the system
32  and upon the making of a single lump-sum payment in an the amount
33  equal to all withdrawn contributions, plus interest at a rate specified by
34  the system determined by the actuary using the member's attained age
35  and the actuarial assumptions and tables currently in use by the system.
36  Any person may make any such purchase as described in this section at
37  an additional rate of contribution, in addition to the employee's contri-
38  bution as provided in K.S.A. 74-4919 and amendments thereto, based
39  upon the member's attained age at the time of purchase and using actu-
40  arial assumptions and tables in use by the retirement system at such time
41  of purchase, for such periods of service, in lieu of a lump-sum amount as
42  provided in this section. Such additional rate of contribution shall com-
43  mence at the beginning of the quarter following such election and shall
HB 2238--Am.
                                     

 1  remain in effect until all quarters of such service have been purchased. In
 2  no case shall the additional credit so granted be greater than the total
 3  participating service forfeited on the earlier withdrawal of contributions.
 4  Such contribution rates shall not remain in effect longer than the period
 5  for which additional participating service credit may be granted.
 6    (c)  Subject to limitations prescribed by the secretary of administra-
 7  tion, the state agency employing any employee who has filed an election
 8  as provided under subsection (a) or (b) and who has entered into an
 9  employee participation agreement, as provided in K.S.A. 75-5524 and
10  amendments thereto for deferred compensation pursuant to the Kansas
11  public employees deferred compensation plan shall contribute to such
12  plan on such employee's behalf an amount equal to 8% of the employee's
13  salary, as such salary has been approved pursuant to K.S.A. 75-2935b and
14  amendments thereto or as otherwise prescribed by law.
15    (d)  As used in this section and K.S.A. 74-4927k and amendments
16  thereto, ``state officer'' means the secretary of administration, secretary
17  on aging, secretary of commerce and housing, secretary of corrections,
18  secretary of health and environment, secretary of human resources, sec-
19  retary of revenue, secretary of social and rehabilitation services, secretary
20  of transportation, secretary of wildlife and parks, superintendent of the
21  Kansas highway patrol, secretary of agriculture, state grain inspector, ex-
22  ecutive director of the Kansas lottery, executive director of the Kansas
23  racing commission, president of the Kansas development finance author-
24  ity, state fire marshal, state librarian, securities commissioner, adjutant
25  general, members of the state board of tax appeals, members of the Kan-
26  sas parole board, members of the state corporation commission, any un-
27  classified employee on the staff of officers of both houses of the legisla-
28  ture, any unclassified employee appointed to the governor's or lieutenant
29  governor's staff and any person employed by the legislative branch of the
30  state of Kansas, other than any such person receiving service credited
31  under the Kansas public employees retirement system or any other re-
32  tirement system of the state of Kansas therefor, who elected to be covered
33  by the provisions of this section as provided in subsection (e) of K.S.A.
34  46-1302 and amendments thereto or who is first employed on or after
35  July 1, 1996, by the legislative branch of the state of Kansas.
36    (e)  The provisions of this section shall not apply to any state officer
37  who has elected to remain eligible for assistance by the state board of
38  regents as provided in subsection (a) of K.S.A. 74-4925 and amendments
39  thereto.
40    Sec. 10.  K.S.A. 1996 Supp. 74-4913 is hereby amended to read
41  as follows: 74-4913. (1) Prior service shall be credited as follows:
42    (a)  A member shall receive full credit for continuous employ-
43  ment prior to the entry date with such member's employer on the
HB 2238--Am.
                                     

 1  entry date. If the employee was also employed on March 15, 1961,
 2  by the employer who is the employee's employer on the employee's entry
 3  date of the year immediately preceding the entry date of that employer,
 4  then all such previous employment, whether or not continuous,
 5  shall be credited; otherwise no credit shall be granted for employ-
 6  ment prior to a break in continuous employment. Any member or
 7  retirant who has been credited with prior service as hereinbefore pro-
 8  vided and who was employed by any participating employer on
 9  March 15, 1961 of the year immediately preceding the entry date of that
10  employer, may apply to the board on such forms as it may prescribe
11  for prior service credit with a participating employer other than
12  the member's entry date employer. Upon receipt of written veri-
13  fication of such employment from the participating employer, the
14  board may shall grant such additional prior service credit and with
15  respect to a retirant, shall adjust the amount of the retirement
16  benefit accordingly commencing with the next monthly benefit
17  payment due following receipt of the written verification, except
18  that such retirant shall not be entitled to any retroactive adjust-
19  ment in the amount of such retirement benefit as a result of the
20  board granting such additional prior service credit. In the case of
21  any person other than a retirant receiving a retirement benefit, such per-
22  son may make application for an adjustment in the benefit amount in the
23  same manner as a member or retirant, and in such case the adjustment
24  in the benefit amount shall be determined by the board upon the advice
25  of the actuary, and shall commence with the next monthly benefit pay-
26  ment due following receipt of the written verification;
27    (b)  leaves of absence and military service shall not be counted
28  as breaks in continuous employment; however, military service
29  which is immediately preceded and followed by employment with
30  a participating employer shall be credited, except that after July
31  1, 1974, not more than five years' credit for military service shall
32  be granted hereunder, but leaves of absence shall not be credited;
33    (c)  any member who was employed in the Kansas state em-
34  ployment service, now a section of the Kansas division of employ-
35  ment security, during any of the time the Kansas state employment
36  service was loaned by the state to the federal government (January
37  1, 1942, for the duration of the emergency period of world war II,
38  which service was returned to the state by the federal government
39  effective November 16, 1946) shall be entitled to prior service
40  credit for the time so employed during the period stated for any
41  service rendered under the jurisdiction of the United States em-
42  ployment service for the federal government in like manner as if
43  the employment service had remained under the jurisdiction of
HB 2238--Am.
                                     

 1  the state of Kansas;
 2    (d)  any member who is not otherwise eligible for service credit
 3  as provided for in subsection (1)(a) may be granted credit for the
 4  service upon the attainment of 38 quarters of participating service;
 5    (e)  any member who was employed by the university of Wichita
 6  prior to July 1, 1964, shall be entitled to prior service credit for
 7  such time of employment under the Kansas public employees re-
 8  tirement system, when such employment is not the basis for other
 9  pension rights.
10    (2)  Participating service shall be credited as follows:  (a) A mem-
11  ber shall receive credit for participating service with a participat-
12  ing employer in accordance with the rules and regulations estab-
13  lished by the board of trustees, except that no more than one
14  calendar quarter of participating service shall be credited for any
15  employment within any one calendar quarter;
16    (b)  leaves of absence and military service shall not count as a
17  break in continuous employment provided the member leaves
18  such member's accumulated contribution on deposit with the fund;
19  however, the period of military service shall be credited, except
20  that after July 1, 1974, not more than five years' credit for military
21  service shall be granted hereunder, but leaves of absence shall not
22  be credited. Employees who enter the military service from their
23  employment after the employer's entry date and who have not
24  completed one year of service at the time of their entry into the
25  military service, shall not become members of the retirement sys-
26  tem until they return to the employment of that participating em-
27  ployer. In the case of such employee whose combined public em-
28  ployment and military service does not equal one year at the time
29  of such employee's return to employment, the date of membership
30  shall be the first day of the payroll period coinciding with or fol-
31  lowing the completion of one combined public employment and
32  military year of service. Such service shall be granted in ac-
33  [chcordance with this section;
34    (c)  a period of retirement under the system or a period of total
35  disability, immediately followed by employment with a participat-
36  ing employer, shall not count as a break in continuous employ-
37  ment, except that such periods while not employed shall not be
38  credited as participating service;
39    (d)  termination of employment, followed by employment with
40  a participating employer within five years after such termination,
41  does not constitute a break in continuous employment if such per-
42  son has not withdrawn such person's accumulated contribution.
43  Such period while not employed shall not be credited as partici-
HB 2238--Am.
                                     

 1  pating service.
 2    (3)  In determining the number of years of credited prior serv-
 3  ice or participating service a fractional year of six months or more
 4  shall be considered as one year and a fractional year of less than
 5  six months shall be disregarded.
 6    Sec. 6. 11.  K.S.A. 1996 Supp. 74-4914 is hereby amended to read as
 7  follows: 74-4914. (1) The normal retirement date for a member of the
 8  system shall be the first day of the month coinciding with or following
 9  the attainment of age 65 or, commencing July 1, 1986, age 65 or age 60
10  with the completion of 35 years of credited service or at any age with the
11  completion of 40 years of credited service, or commencing July 1, 1993,
12  any alternative normal retirement date already prescribed by law or age
13  62 with the completion of 10 years of credited service or the first day of
14  the month coinciding with or following the date that the total of the
15  number of years of credited service and the number of years of attained
16  age of the member is equal to or more than 85. In no event shall a normal
17  retirement date for a member be before six months after the entry date
18  of the participating employer by whom such member is employed. A
19  member may retire on the normal retirement date or on the first day of
20  any month thereafter upon the filing with the office of the retirement
21  system of an application in such form and manner as the board shall
22  prescribe. Nothing herein shall prevent any person, member or retirant
23  from being employed, appointed or elected as an employee, appointee,
24  officer or member of the legislature. Elected officers may retire from the
25  system on any date on or after the attainment of the normal retirement
26  date, but no retirement benefits payable under this act shall be paid until
27  the member has terminated such member's office.
28    (2)  No retirant shall make contributions to the system or receive serv-
29  ice credit for any service after the date of retirement.
30    (3)  Any member who is an employee of an affiliating employer pur-
31  suant to K.S.A. 74-4954b and amendments thereto and has not withdrawn
32  such member's accumulated contributions from the Kansas police and
33  firemen's retirement system may retire before such member's normal
34  retirement date on the first day of any month coinciding with or following
35  the attainment of age 55.
36    (4)  Any member may retire before such member's normal retirement
37  date on the first day of any month coinciding with or following the at-
38  tainment of age 55 with the completion of 10 years of credited service,
39  but in no event before six months after the entry date, upon the filing
40  with the office of the retirement system of an application for retirement
41  in such form and manner as the board shall prescribe.
42    (5)  If a retirant who retired on or after July 1, 1988, is employed or
43  appointed in or to any position or office for which compensation for serv-
HB 2238--Am.
                                     

 1  ice is paid, during calendar years 1988 through 1990, in an amount equal
 2  to $6,000 or more in any one such calendar year; during calendar year
 3  1991, in an amount equal to $9,720 or more; during calendar year 1992,
 4  in an amount equal to $10,200 or more; during calendar year 1993, in an
 5  amount equal to $10,560 or more; during calendar year 1994, in an
 6  amount equal to $11,160 or more; or during calendar year 1995 and all
 7  calendar years thereafter, during calendar year 1997, in an amount
 8  equal to $11,280 $13,500 or more in any one such calendar year; during
 9  calendar year 1998, in an amount equal to $14,500 or more; during
10  calendar year 1999, in an amount equal to $15,500 or more; during
11  calendar year 2000, in an amount equal to $17,000 or more; during
12  calendar year 2001, in an amount equal to $25,000 or more; or
13  during calendar year 2002, in an amount equal to $30,000 or more,
14  by any participating employer for which such retirant was employed or
15  appointed during the final two years of such retirant's participation, such
16  retirant shall not receive any retirement benefit for any month for which
17  such retirant serves in such position or office. The participating employer
18  shall report to the system within 30 days of when the compensation paid
19  to the retirant is equal to or exceeds any limitation provided by this sec-
20  tion. Any retirant employed by a participating employer shall not make
21  contributions nor receive additional credit under such system for such
22  service except as provided by this section. Upon request of the executive
23  secretary of the system, the secretary of revenue shall provide such in-
24  formation as may be needed by the executive secretary to carry out the
25  provisions of this act. The provisions of this subsection shall not apply to
26  retirants employed as substitute teachers or officers, employees, appoint-
27  ees or members of the legislature or any other elected officials.
28    (6)  For purposes of this section, any employee of a local governmental
29  unit which has its own pension plan who becomes an employee of a
30  participating employer as a result of a merger or consolidation of services
31  provided by local governmental units, which occurred on January 1, 1994,
32  may count service with such local governmental unit in determining
33  whether such employee has met the years of credited service require-
34  ments contained in this section.
35    Sec. 12.  K.S.A. 1996 Supp. 74-4914e is hereby amended to
36  read as follows: 74-4914e. (1) As used in this section:
37    (a)  ``Correctional employee'' means any member of the system
38  who is a security officer or other employee of the department of
39  corrections and who is in a position for which the duties and re-
40  sponsibilities involve regular contact with inmates as certified by
41  the secretary of corrections;
42    (b)  ``disability'' means the total inability to perform perma-
43  nently the duties of the position of a correctional employee in
HB 2238--Am.
                                     

 1  which the correctional employee was employed at the time of dis-
 2  ability;
 3    (c)  ``service-connected'' means any physical or mental disabil-
 4  ity resulting from external force, violence or disease occasioned
 5  by an act of duty as a correctional employee and includes, for any
 6  correctional employee after five years of credited service, any
 7  death or disability resulting from a heart disease or disease of the
 8  lung or respiratory tract, except that in the event that the correc-
 9  tional employee ceases to be a contributing member except by
10  reason of a service-connected disability for a period of six months
11  or more and then again becomes a contributing member the pro-
12  vision relating to death or disability resulting from a heart disease
13  or disease of the lung or respiratory tract shall not apply until such
14  correctional employee has again become a contributing member
15  for a period of not less than two years or unless clear and precise
16  evidence is presented that the heart disease or disease of the lung
17  or respiratory tract was in fact occasioned by an act of duty as a
18  correctional employee; and
19    (d)  ``final average salary'' means the average highest annual
20  compensation paid to a correctional employee for any three of the
21  last five years of participating service immediately preceding the
22  date of disability, or if participating service is less than three years,
23  then the average annual compensation paid to the correctional
24  employee during the full period of participating service or if a
25  correctional employee has less than one calendar year of partici-
26  pating service the correctional employee's final average salary
27  shall be computed by multiplying the correctional employee's
28  highest monthly salary received in that year by 12.
29    (2)  If any active contributing correctional employee becomes
30  totally and permanently disabled due to service-connected causes
31  as defined in subsection (1), such correctional employee shall be
32  retired and the following benefits shall become payable and shall
33  continue until the correctional employee's death or until the cor-
34  rectional employee recovers from the disability if a report of the
35  event in a form acceptable to the board is filed in the office of the
36  executive secretary of the board within 220 days after the date of
37  the event or act of duty causing such disability and an application
38  for such benefit, in such form and manner as the board shall pre-
39  scribe, is filed by the correctional employee or the correctional
40  employee's authorized representative in the office of the executive
41  secretary of the board within two years of the date of disability:
42    (a)  The correctional employee shall receive a retirement ben-
43  efit equal to 50% of the correctional employee's final average sal-
HB 2238--Am.
                                     

 1  ary. Such benefit shall accrue from the day upon which the cor-
 2  rectional employee ceases to draw compensation.
 3    (b)  Each of the correctional employee's unmarried children
 4  under the age of 18 years or each of the correctional employee's
 5  children under the age of 23 years who are full-time students as
 6  provided in K.S.A. 74-49,117 and amendments thereto shall re-
 7  ceive an annual benefit equal to 10% of the correctional employ-
 8  ee's final average salary. Such benefit shall accrue from the day
 9  upon which the correctional employee ceases to draw compensa-
10  tion and shall end on the first day of the month in which each such
11  child or children attains the age of 18 years, die or marry, which-
12  ever occurs earlier or in which each such child or children attains
13  the age of 23 years, if such child or children are full-time students
14  as provided in K.S.A. 74-49,117 and amendments thereto.
15    (c)  In no case shall the total benefits payable under paragraphs
16    (a) and (b) of this subsection (2) be in excess of 75% of the correc-
17  tional employee's final average salary.
18    (d)  In the event a correctional employee who is retired under
19  paragraph (a) of this subsection (2), dies within two years after the
20  date of such retirement, then benefits may be payable under sub-
21  section (2) of K.S.A. 74-4916 and amendments thereto.
22    (e)  In the event a correctional employee who is retired under
23  paragraph (a) of this subsection (2), dies more than two years after
24  the date of such retirement, and the proximate cause of such death
25  is the service-connected cause from which the disability resulted,
26  then benefits may be payable under subsection (2) of K.S.A. 74-
27  4916 and amendments thereto.
28    (f)  In the event a correctional employee who is retired under subsec-
29  tion (2) dies after the date of retirement and no benefits are payable under
30  paragraphs (d) and (e) the following benefits shall be payable:
31    (i)  To the correctional employee's spouse, if lawfully wedded to the
32  correctional employee at the time of the correctional employee's death, a
33  lump-sum benefit equal to 50% of the correctional employee's final av-
34  erage salary at the time of the correctional employee's retirement.
35    (ii)  To the correctional employee's spouse, if lawfully wedded to the
36  correctional employee at the time of the correctional employee's death, an
37  annual benefit equal to 50% of the correctional employee's retirement
38  benefit payable in monthly installments, to accrue from the first day of
39  the month following the correctional employee's date of death and ending
40  on the first day of the month in which the spouse dies. If there is no
41  surviving spouse, or if after the death of the spouse there remain one or
42  more children under the age of 18 years or one or more children under
43  the age of 23 years who is a full-time student as provided in K.S.A. 74-
HB 2238--Am.
                                     

 1  49,117, and amendments thereto, the annual spouse's benefit shall be pay-
 2  able in equal shares to such children and each child's share shall end on
 3  the first day of the month in which such child attains the age of 18 years
 4  or dies, whichever occurs earlier or in which such child attains the age of
 5  23 years, if such child is a full-time student as provided in K.S.A. 74-
 6  49,117, and amendments thereto.
 7    The provisions of this subsection shall apply in all cases of such cor-
 8  rectional employees who die after October 1, 1996.
 9    (3)  If any correctional employee who is an active contributing
10  member prior to such correctional employee's normal retirement
11  becomes totally and permanently disabled for a period of 180 days
12  from causes not service-connected, and not as the result of a will-
13  fully negligent or intentional act of the correctional employee,
14  such correctional employee shall be retired and the following ben-
15  efit shall become payable and shall continue until the correctional
16  employee's death or until the correctional employee recovers from
17  such disability whichever occurs first if a report of the disability in
18  a form acceptable to the board is filed in the office of the executive
19  secretary of the board within 220 days after the date of the com-
20  mencement of such disability and if an application for such benefit
21  in such form and manner as the board shall prescribe is filed in
22  the office of the executive secretary of the board within two years
23  of the date of disability:
24    A retirement benefit equal to 2% of the correctional employee's
25  final average salary multiplied by the number of years of credited
26  service, except that such retirement benefit shall be at least equal
27  to 25% of the member's final average salary but not to exceed the
28  amount of the retirement benefit provided in paragraph (a) of sub-
29  section (2). Such benefit shall not become payable until satisfactory
30  evidence is presented to the board that the correctional employee
31  is and has been for a period of 180 days totally and permanently
32  disabled, but benefits shall accrue from the day upon which the
33  correctional employee ceases to draw compensation.
34    (4)  Any correctional employee who is employed for compen-
35  sation by an employer other than the department of corrections
36  and whose disability is incurred in the course of such other em-
37  ployment shall not be eligible for any of the benefits provided in
38  subsection (3).
39    (5)  If a correctional employee becomes totally and perma-
40  nently disabled and no benefits are payable under subsections (2)
41  or (3), the sum of the correctional employee's accumulated con-
42  tributions shall be paid to the correctional employee.
43    (6)  Any correctional employee receiving benefits under this
HB 2238--Am.
                                     

 1  section shall submit to medical examination, not oftener than an-
 2  nually, by one or more physicians or any other practitioners of the
 3  healing arts holding a valid license issued by Kansas state board of
 4  healing arts, as the board of trustees may direct. If upon such med-
 5  ical examination the examiners report to the board that the retir-
 6  ant is physically able and capable of resuming employment with
 7  the participating employer from whose employment the correc-
 8  tional employee retired, the disability benefits shall terminate. A
 9  retirant who has been receiving benefits under the provisions of
10  this section and who returns to employment of a participating em-
11  ployer shall immediately commence accruing service credit which
12  shall be added to that which has been accrued by virtue of previous
13  service.
14    (7)  Any retirant who has been receiving benefits under the pro-
15  visions of this section for a period of five years shall be deemed
16  finally retired and shall not be subject to further medical exami-
17  nations, except that if the board of trustees shall have reasonable
18  grounds to question whether the retirant remains totally and per-
19  manently disabled, a further medical examination or examinations
20  may be required.
21    (8)  Refusal or neglect to submit to examination as provided in
22  subsection (6) shall be sufficient cause for suspending or discon-
23  tinuing benefit payments under this section and if such refusal or
24  neglect shall continue for a period of one year, the correctional
25  employee's rights in and to all benefits under the system may be
26  revoked by the board.
27    (9)  Any retirement benefits payable under the provisions of
28  this section shall be in lieu of all other benefits under the system.
29    (10)  Each correctional employee shall report to such member's
30  participating employer any event or act of duty causing disability
31  within 200 days after such event or act of duty. The department of
32  corrections shall file in the office of the executive secretary of the
33  board, in a form acceptable to the board, a report of the event or
34  act of duty causing disability within 220 days after the event or act
35  of duty.
36    (11)  Benefits payable under this section shall be reduced by
37  the original amount of any disability benefits received under the
38  federal social security act or the workers compensation act. For
39  any correctional employee already retired on the effective date of
40  this act, no reduction of the original social security benefits shall
41  be applicable to benefits paid prior to the effective date of this act.
42  In no case shall a correctional employee who is entitled to receive
43  benefits under this section receive less than $100 per month.
HB 2238--Am.
                                     

 1    (12)  The provisions of this section shall apply to disabilities oc-
 2  curring after June 30, 1982, and prior to July 1, 1995. At the di-
 3  rection of the board of trustees, the actuary shall conduct an ex-
 4  perience evaluation of benefits payable under this section and the
 5  board shall provide copies of such study to the governor and mem-
 6  bers of the legislature.
 7    (13)  The provisions of K.S.A. 74-4927 and amendments thereto
 8  relating to insured disability benefits shall not be applicable to
 9  correctional employees subject to the provisions of this section.
10    (14)  In the event a correctional employee who is retired under sub-
11  section (3) dies after the date of retirement and no benefits are payable
12  under that subsection, the following benefits shall be payable;
13    (i)  To the correctional employee's spouse, if lawfully wedded to the
14  correctional employee at the time of the correctional employee's death, a
15  lump-sum benefit equal to 50% of the correctional employee's final av-
16  erage salary at the time of the correctional employee's retirement.
17    (ii)  To the correctional employee's spouse, if lawfully wedded to the
18  correctional employee at the time of the correctional employee's death, an
19  annual benefit equal to 50% of the correctional employee's retirement
20  benefit payable in monthly installments, to accrue from the first day of
21  the month following the correctional employee's date of death and ending
22  on the first day of the month in which the spouse dies. If there is no
23  surviving spouse, or if after the death of the spouse there remain one or
24  more children under the age of 18 years or one or more children under
25  the age of 23 years who is a full-time student as provided in K.S.A. 74-
26  49,117, and amendments thereto, the annual spouse's benefit shall be pay-
27  able in equal shares to such children and each child's share shall end on
28  the first day of the month in which such child attains the age of 18 years
29  or dies, whichever occurs earlier or in which such child attains the age of
30  23 years, if such child is a full-time student as provided in K.S.A. 74-
31  49,117, and amendments thereto.
32    The provisions of this subsection shall apply in all cases of such cor-
33  rectional employees who die after October 1, 1996.
34    Sec. 13.  K.S.A. 1996 Supp. 74-4919a is hereby amended to
35  read as follows: 74-4919a. (1) An employee of a participating em-
36  ployer who becomes a member as provided in K.S.A. 74-4911 and
37  amendments thereto, after completion of one year of continuous
38  employment as therein provided may purchase participating serv-
39  ice credit for such year of employment by making application
40  therefor. Such application and payment may be made at any time
41  after the employee becomes a member and continues to be em-
42  ployed by a participating employer. Any member of the system
43  who has not retired may purchase such service credit by paying
HB 2238--Am.
                                     

 1  the then present value of the retirement benefits based on such
 2  service by means of a single lump sum payment in the amount
 3  determined by the actuary using the member's attained age and
 4  the actuarial assumptions and tables currently in use by this re-
 5  tirement system. If an employee was employed before the partic-
 6  ipating employer's entry date and did not become a member until
 7  the first day of the month or the first day of the first payroll period,
 8  whichever is applicable, coinciding with or following the comple-
 9  tion of one year continuous employment, the member may pur-
10  chase participating service credit for the period from the partici-
11  pating employer's entry date until such member became a member
12  by paying to the system the then present value of the retirement
13  benefits based on such service by means of a single lump sum pay-
14  ment in the amount determined by the actuary using the member's
15  attained age and the actuarial assumptions and tables currently in
16  use by this retirement system.
17    Notwithstanding any other provision of this subsection, if an employee
18  purchases such participating service credit within 12 months of such em-
19  ployee's membership in the system, such employee may purchase such
20  participating service credit by making application therefor and paying to
21  the system a lump sum amount equivalent to 4% of the compensation paid
22  to such member for personal services during such period. If an employee
23  was employed for a partial year after the participating employer's
24  entry date and did not become a member at that time, but became
25  a member at a later date, the member may purchase participating
26  service credit for such partial year of employment by paying the
27  then present value of the retirement benefits based on such service
28  by means of a single lump sum payment in the amount determined
29  by the actuary using the member's attained age and the actuarial
30  assumptions and tables currently in use by this retirement system.
31    (2)  Any employee of the state of Kansas who was receiving or
32  was eligible for assistance by the state board of regents in the pur-
33  chase of a retirement annuity under K.S.A. 74-4925 and amend-
34  ments thereto, and who became ineligible for such assistance prior
35  to the effective date of this act because such employee's position
36  was reclassified to a position in the classified service under the
37  Kansas civil service act, or who became ineligible for such assis-
38  tance because such person accepted and transferred to a position
39  in the classified service under the Kansas civil service act, and who
40  becomes a member of the system on the first day of the payroll
41  period coinciding with or following the effective date of this act in
42  accordance with subsection (5) of K.S.A. 74-4911 and amendments
43  thereto, may purchase participating service credit for the period
HB 2238--Am.
                                     

 1  of employment from the effective date of such reclassification or
 2  transfer to the date of such employee's membership in the system.
 3  Such employee may purchase such participating service credit by
 4  making application therefor and paying to the system a lump-sum
 5  amount equivalent to 4% of the compensation paid to such mem-
 6  ber for personal services during such period by the state of Kansas
 7  or as provided in subsection (3). Such application and payment may
 8  be made at any time after the employee becomes a member and
 9  continues to be employed by a participating employer.
10    (3)  Except as otherwise provided in this subsection, any mem-
11  ber of the retirement system may purchase participating service
12  credit for employment service as described in this section, if first
13  commenced prior to January 1, 1996, by electing to effect such
14  purchase by means of having employee contributions as provided
15  in K.S.A. 74-4919 and amendments thereto deducted from such
16  member's compensation at a percentage rate equal to two times
17  or three times the employee's rate of contribution as provided in
18  K.S.A. 74-4919 and amendments thereto for such periods of serv-
19  ice, in lieu of a lump-sum amount as provided in this section. Such
20  deductions shall commence at the beginning of the quarter follow-
21  ing such election and shall remain in effect until all quarters of
22  such service have been purchased. Any person may make any such
23  purchase as described in this section, if first commenced in cal-
24  endar year 1996 or thereafter, at an additional rate of contribu-
25  tion, in addition to the employee's rate of contribution as provided
26  in K.S.A. 74-4919 and amendments thereto, based upon the mem-
27  ber's attained age at the time of purchase and using actuarial as-
28  sumptions and tables in use by the retirement system at such time
29  of purchase, for such periods of service, in lieu of a lump-sum
30  amount as provided in this section. Such additional rate of contri-
31  bution shall commence at the beginning of the quarter following
32  such election and shall remain in effect until all quarters of such
33  service have been purchased. Notwithstanding any other provision of
34  this subsection, any member of the retirement system, within 12 months
35  of such member's membership date in the system, may purchase partici-
36  pating service credit for employment service as described in this section,
37  by electing to effect such purchase by means of having employee contri-
38  butions as provided in K.S.A. 74-4919, and amendments thereto, deducted
39  from such member's compensation at a percentage rate equal to two times
40  or three times the employee's rate of contribution as provided in K.S.A.
41  74-4910, and amendments thereto, for such periods of service, in lieu of
42  a lump sum amount as provided in this section. Such deductions shall
43  commence at the beginning of the quarter following such election and
HB 2238--Am.
                                     

 1  shall remain in effect until all quarters of such service have been pur-
 2  chased. Such purchase must be completed within 24 months of such mem-
 3  bership date in the system.
 4    Sec. 14.  K.S.A. 1996 Supp. 74-4919c is hereby amended to
 5  read as follows: 74-4919c. Except as otherwise provided in this
 6  section, any such member having previously lost credit for periods
 7  of participating service, because of termination of employment
 8  and withdrawal of contributions, if first commenced prior to Jan-
 9  uary 1, 1996, may elect in writing to such member's participating
10  employer and the retirement system to have member contribu-
11  tions deducted from such member's compensation at a percentage
12  rate equal to two times or three times the employee's rate of con-
13  tribution as provided in K.S.A. 74-4919 and amendments thereto
14  for such periods of service. Such election may be made at any time
15  prior to retirement and the attainment of age 70 and shall commence
16  on the first day of the payroll period for which compensation shall
17  be paid in the employer's quarterly reporting period coinciding
18  with or following such election. Any member making such an elec-
19  tion shall receive credit for one additional quarter of participating
20  service credit for each quarter during which the contribution rate
21  at a percentage rate equal to two times the employee's rate of
22  contribution as provided in K.S.A. 74-4919 and amendments
23  thereto for such periods of service, is in effect and two additional
24  quarters of participating service credit for each quarter during
25  which the contribution rate at a percentage rate equal to three
26  times the employee's rate of contribution as provided in K.S.A. 74-
27  4919 and amendments thereto, is in effect. Any person may make
28  any such purchase as described in this section, if first commenced
29  in calendar year 1996 or thereafter, at an additional rate of con-
30  tribution, in addition to the employee's rate of contribution as pro-
31  vided in K.S.A. 74-4919 and amendments thereto, based upon the
32  member's attained age at the time of purchase and using actuarial
33  assumptions and tables in use by the retirement system at such
34  time of purchase, for such periods of service, in lieu of a lump-sum
35  amount as provided in this section. Such additional rate of contri-
36  bution shall commence at the beginning of the quarter following
37  such election and shall remain in effect until all quarters of such
38  service have been purchased. In no case shall the additional credit
39  so granted be greater than the total participating service credit
40  forfeited on the earlier termination of employment and with-
41  drawal of contributions. Such contribution rates shall not remain
42  in effect longer than the period for which additional participating
43  service credit may be granted.
HB 2238--Am.
                                     

 1    Sec. 15.  K.S.A. 1996 Supp. 74-4919h is hereby amended to
 2  read as follows: 74-4919h. (1) In addition to any military service
 3  credited under the provisions of K.S.A. 74-4913 or 74-4936 and
 4  amendments thereto, or in the event that an active contributing
 5  member does not qualify for credit for military service as defined
 6  in subsection (22) of K.S.A. 74-4902 and amendments thereto, such
 7  member may purchase participating credit for periods of active
 8  service in the armed forces of the United States or in the commis-
 9  sioned corps of the United States public health service and for per-
10  iods of service required to fulfill the requirements of section 651
11  of title 10, United States code, which are not otherwise creditable,
12  which when added to any creditable military service do not exceed
13  six years. Except as provided in subsection (4)(a) for such purchase
14  of participating credit for such periods of such military service
15  which is the basis for military pension rights, such member shall
16  be entitled to purchase one quarter of participating service credit
17  for each year of service required to fulfill the requirements of sec-
18  tion 651 of title 10, United States code. Except as otherwise pro-
19  vided in this section, such purchase shall be effected by the mem-
20  ber submitting proof of such service acceptable to the board and,
21  if first commenced prior to January 1, 1996, electing in writing to
22  have employee contributions as provided in K.S.A. 74-4919 and
23  amendments thereto deducted from such member's compensation
24  at a percentage rate equal to two times or three times the em-
25  ployee's rate of contribution as provided in K.S.A. 74-4919 and
26  amendments thereto for such periods of service. Such deductions
27  shall commence at the beginning of the quarter following such
28  election and shall remain in effect until all of the full quarters of
29  such service have been purchased. Any person may make any such
30  purchase as described in this section, if first commenced in cal-
31  endar year 1996 or thereafter, at an additional rate of contribu-
32  tion, in addition to the employee's rate of contribution as provided
33  in K.S.A. 74-4919 and amendments thereto, based upon the mem-
34  ber's attained age at the time of purchase and using actuarial as-
35  sumptions and tables in use by the retirement system at such time
36  of purchase, for such periods of service, in lieu of a lump-sum
37  amount as provided in this section. Such additional rate of contri-
38  bution shall commence at the beginning of the quarter following
39  such election and shall remain in effect until all quarters of such
40  service have been purchased.
41    (2) (a)  Such purchase of participating service credit must be
42  completed prior to such member's retirement.
43    (b) For members purchasing such participating service credit on
HB 2238--Am.
                                     

 1  or after July 1, 1993, whose purchase is completed within five years
 2  before such member's retirement, such member shall pay the ac-
 3  tuarially determined amount by means of a single lump-sum pay-
 4  ment or equal annual payments which shall be completed prior to
 5  retirement. The lump-sum payment or annual payments shall be
 6  determined by the system's actuary by using the member's current
 7  annual salary at the time, actuarial assumptions and tables cur-
 8  rently in use by the system and the member's attained age. No
 9  participating employer shall pay all or any part of the cost of serv-
10  ice credit purchased by a member under this subsection. Any mem-
11  ber who purchases such participating service credit and who does
12  not make the lump-sum payment or annual payments as required
13  by this subsection shall have any previously credited service under
14  this section voided and such member shall be refunded such mem-
15  ber's payments previously made for such purchase plus interest.
16    The provisions of this subsection shall not apply to any member
17  who is employed by an institution that is closed or abolished or
18  otherwise ceases operations or that is scheduled for such closure,
19  abolition or cessation of operations and has a budget reduction
20  imposed that is associated with such closure, abolition or cessation
21  of operations, and who is laid off from employment with such in-
22  stitution for the reason of such closure, abolition or cessation. As
23  used in this subsection, ``institution'' means Topeka state hospital
24  or Winfield state hospital and training center; and ``laid off''
25  means, in the case of a state officer or employee in the classified
26  service under the Kansas civil service act, being laid off under
27  K.S.A. 75-2948 and amendments thereto and, in the case of a state
28  officer or employee in the unclassified service under the Kansas
29  civil service act, being terminated from employment with the state
30  agency by the appointing authority, except that ``laid off'' shall not
31  include any separation from employment pursuant to budget re-
32  duction or expenditure authority reduction and reduction of
33  F.T.E. positions under K.S.A. 1996 Supp. 75-6801 and amend-
34  ments thereto.
35    (3)  In the event such member has elected to purchase partici-
36  pating service credit as provided in K.S.A. 74-4919a to 74-4919e,
37  inclusive, and any amendments thereto, the increased employee
38  contributions and purchase of participating service credit pro-
39  vided herein shall not commence until after the purchase of par-
40  ticipating service credit under K.S.A. 74-4919a to 74-4919e, inclu-
41  sive, and any amendments thereto, has been completed. If a
42  member terminates employment before completing the purchase
43  of all participating service credit as such member may be entitled
HB 2238--Am.
                                     

 1  to, such member shall only receive such credit for those full quar-
 2  ters as the percentage rate equal to two times or three times the
 3  employee's rate of contribution as provided in K.S.A. 74-4919 and
 4  amendments thereto or those full quarters as the additional rate
 5  of contribution, in addition to the employee's rate of contribution
 6  as provided in K.S.A. 74-4919 and amendments thereto has been
 7  deducted from such member's compensation.
 8    (4) (a)  Any member of the system who has not yet retired may
 9  purchase participating service credit for military service as de-
10  scribed in this section which is the basis for military pension rights
11  at an additional rate of contribution in addition to the employee's
12  rate of contribution as provided in K.S.A. 74-4919 and amend-
13  ments thereto, based upon the member's attained age at the time
14  of purchase and using actuarial assumptions and tables in use by
15  the retirement system at the time of such purchase. Such addi-
16  tional rate of contribution shall commence at the beginning of the
17  quarter following such election and shall remain in effect until all
18  quarters of such service have been purchased. Any such member
19  may purchase participating service credit for military service as
20  described in this section by electing to effect such purchase by
21  means of a single lump-sum payment in lieu of employee contri-
22  butions as provided in this section. The lump-sum payment shall
23  be an amount determined by the actuary using the member's then
24  current annual rate of compensation, or if not actively employed,
25  the member's annual rate of compensation when last participating,
26  the actuarial assumptions and tables currently in use by the re-
27  tirement system and the member's attained age. No participating
28  employer shall pay all or any part of the cost of any additional
29  participating service credit to be purchased by means of a lump-
30  sum payment by a member under this section.
31    (b)  Any member of the retirement system who has not retired
32  may purchase participating service credit for military service as
33  described in this section which is not the basis for military pension
34  rights by electing to effect such purchase by means of a single
35  lump-sum payment in lieu of employee contributions as provided
36  in this section. The lump-sum payment shall be an amount deter-
37  mined by the actuary using the member's then current annual rate
38  of compensation, or if not actively employed, the member's annual
39  rate of compensation when last participating, the actuarial as-
40  sumptions and tables currently in use by the retirement system
41  and the member's attained age. No participating employer shall
42  pay all or any part of the cost of any additional participating service
43  credit to be purchased by means of a lump-sum payment by a mem-
HB 2238--Am.
                                     

 1  ber under this section.
 2    Sec. 7. 16.  K.S.A. 1996 Supp. 74-4920 is hereby amended to read as
 3  follows: 74-4920. (1) (a)  Upon the basis of each annual actuarial valu-
 4  ation and appraisal as provided for in subsection (3)(a) of K.S.A. 74-4908
 5  and amendments thereto, the board shall certify, on or before July 15 of
 6  each year, to the division of the budget in the case of the state and to the
 7  agent for each other participating employer an actuarially determined
 8  estimate of the rate of contribution which will be required, together with
 9  all accumulated contributions and other assets of the system, to be paid
10  by each such participating employer to pay all liabilities which shall exist
11  or accrue under the system, including amortization of the actuarial ac-
12  crued liability over a period of 40 years commencing on July 1, 1993, and
13  the actuarial accrued liability for members of the faculty and other per-
14  sons who are employed by the state board of regents or by educational
15  institutions under its management assisted by the state board of regents
16  in the purchase of retirement annuities as provided in K.S.A. 74-4925 and
17  amendments thereto, as provided in this section. The actuarial accrued
18  liability for all participating employers other than the state board of re-
19  gents relating to members of the faculty and other persons described in
20  this section, shall be amortized by annual payments that increase 4% for
21  each year remaining in the amortization period. For all participating em-
22  ployers other than the state board of regents relating to members of the
23  faculty and other persons described in this section, the projected unit
24  credit actuarial cost method shall be used in annual actuarial valuations,
25  commencing with the 1993 valuation, to determine the employer contri-
26  bution rates that shall be certified by the board. The actuarial accrued
27  liability for members of the faculty and other persons described in this
28  subsection assisted by the state board of regents in the purchase of re-
29  tirement annuities as provided in K.S.A. 74-4925 and amendments
30  thereto shall be amortized by annual level payments over a period of 10
31  years commencing July 1, 1993. Such certified rate of contribution shall
32  be based on the standards set forth in subsection (3)(a) of K.S.A. 74-4908
33  and amendments thereto and shall not be based on any other purpose
34  outside of the needs of the system.
35    (b) (i)  For employers affiliating on and after January 1, 1998, upon
36  the basis of an annual actuarial valuation and appraisal of the system
37  conducted in the manner provided for in K.S.A. 74-4908 and amendments
38  thereto, the board shall certify, on or before July 15 of each year to each
39  such employer an actuarially determined estimate of the rate of contri-
40  bution which shall be required to be paid by each such employer to pay
41  all of the liabilities which shall accrue under the system from and after
42  the entry date as determined by the board, upon recommendation of the
43  actuary. Such rate shall be termed the employer's participating service
HB 2238--Am.
                                     

 1  contribution and shall be uniform for all participating employers. Such
 2  additional liability shall be amortized over a period of 35 years com-
 3  mencing on July 1, 1998, by annual payments that increase 4% for each
 4  year remaining in the amortization period. For all participating employers
 5  described in this section, the projected unit credit actuarial cost method
 6  shall be used in annual actuarial valuations to determine the employer
 7  contribution rates that shall be certified by the board.
 8    (ii)  The board shall determine for each such employer separately an
 9  amount sufficient to amortize over a period of not to exceed 35 years
10  commencing July 1, l998, all liabilities for prior service costs which shall
11  have accrued at the time of entry into the system. On the basis of such
12  determination the board shall annually certify to each such employer sep-
13  arately an actuarially determined estimate of the rate of contribution
14  which shall be required to be paid by that employer to pay all of the
15  liabilities for such prior service costs. Such rate shall be termed the em-
16  ployer's prior service contribution.
17    (2)  The division of the budget and the governor shall include in the
18  budget and in the budget request for appropriations for personal services
19  the sum required to satisfy the state's obligation under this act as certified
20  by the board and shall present the same to the legislature for allowance
21  and appropriation.
22    (3)  Each other participating employer shall appropriate and pay to
23  the system a sum sufficient to satisfy the obligation under this act as
24  certified by the board.
25    (4)  Each participating employer is hereby authorized to pay the em-
26  ployer's contribution from the same fund that the compensation for which
27  such contribution is made is paid from or from any other funds available
28  to it for such purpose. Each political subdivision, other than an instru-
29  mentality of the state, which is by law authorized to levy taxes for other
30  purposes, may levy annually at the time of its levy of taxes, a tax which
31  may be in addition to all other taxes authorized by law for the purpose of
32  making its contributions under this act and, in the case of cities and coun-
33  ties, to pay a portion of the principal and interest on bonds issued under
34  the authority of K.S.A. 12-1774 and amendments thereto by cities located
35  in the county, which tax, together with any other fund available, shall be
36  sufficient to enable it to make such contribution. In lieu of levying the
37  tax authorized in this subsection, any taxing subdivision may pay such
38  costs from any employee benefits contribution fund established pursuant
39  to K.S.A. 12-16,102 and amendments thereto. Each participating em-
40  ployer which is not by law authorized to levy taxes as described above,
41  but which prepares a budget for its expenses for the ensuing year and
42  presents the same to a governing body which is authorized by law to levy
43  taxes as described above, may include in its budget an amount sufficient
HB 2238--Am.
                                     

 1  to make its contributions under this act which may be in addition to all
 2  other taxes authorized by law. Such governing body to which the budget
 3  is submitted for approval, may levy a tax sufficient to allow the partici-
 4  pating employer to make its contributions under this act, which tax, to-
 5  gether with any other fund available, shall be sufficient to enable the
 6  participating employer to make the contributions required by this act.
 7    (5)  The rate of contribution certified to a participating employer as
 8  provided in this section shall apply during the fiscal year of the partici-
 9  pating employer which begins in the second calendar year following the
10  year of the actuarial valuation. For the fiscal year commencing in calendar
11  year 1993, the employer rate of contribution for the state of Kansas and
12  for participating employers under K.S.A. 74-4931 and amendments
13  thereto shall be 3.1% of the amount of compensation upon which mem-
14  bers contribute during the period. For the fiscal year commencing in
15  calendar year 1994, the employer rate of contribution for the state of
16  Kansas and for participating employers under K.S.A. 74-4931 and amend-
17  ments thereto shall be 3.2% of the amount of compensation upon which
18  members contribute during the period. For the fiscal year commencing
19  in calendar year 1994, the employer rate of contribution for participating
20  employers other than the state of Kansas shall be 2.2% of the amount of
21  compensation upon which members contribute during the period. Except
22  as specifically provided in this section, for the fiscal year commencing in
23  calendar year 1995, the rate of contribution certified to a participating
24  employer shall in no event exceed such participating employer's contri-
25  bution rate for the immediately preceding fiscal year by more than 0.1%
26  of the amount of compensation upon which members contribute during
27  the period. Except as specifically provided in this section, for fiscal years
28  commencing in calendar year 1996 and in each subsequent calendar year,
29  the rate of contribution certified to the state of Kansas shall in no event
30  exceed the state's contribution rate for the immediately preceding fiscal
31  year by more than 0.2% of the amount of compensation upon which
32  members contribute during the period. Except as specifically provided in
33  this section, for fiscal years commencing in calendar year 1997 and in
34  each subsequent calendar year, the rate of contribution certified to par-
35  ticipating employers other than the state of Kansas shall in no event ex-
36  ceed such participating employer's contribution rate for the immediately
37  preceding fiscal year by more than 0.15% of the amount of compensation
38  upon which members contribute during the period. There shall be an
39  employer rate of contribution certified to the state of Kansas and partic-
40  ipating employers under K.S.A. 74-4931 and amendments thereto. There
41  shall be a separate employer rate of contribution certified to all other
42  participating employers other than the state of Kansas.
43    (6)  The actuarial cost of any legislation enacted in the 1994 session
HB 2238--Am.
                                     

 1  of the Kansas legislature will be included in the June 30, 1994, actuarial
 2  valuation in determining contribution rates for participating employers.
 3    (7)  The board with the advice of the actuary may fix the contribution
 4  rates for participating employers joining the system after one year from
 5  the first entry date or for employers who exercise the option contained
 6  in K.S.A. 74-4912 and amendments thereto at rates different from the
 7  rate fixed for employers joining within one year of the first entry date.
 8    (8)  For employers affiliating on and after January 1, 1998, the rates
 9  of contribution certified to the participating employer as provided in this
10  section shall apply during the fiscal year immediately following such cer-
11  tification, but the rate of contribution during the first year following the
12  employer's entry date shall be equal to 7% of the amount of compensation
13  on which members contribute during the year. Any amount of such first
14  year's contribution which may be in excess of the necessary current service
15  contribution shall be credited by the board to the respective employer's
16  prior service liability.
17    (8)(9)  Employer contributions shall in no way be limited by any other
18  act which now or in the future establishes or limits the compensation of
19  any member.
20    (9)(10)  Each participating employer shall remit quarterly, or as the
21  board may otherwise provide, all employee deductions and required em-
22  ployer contributions to the executive secretary for credit to the Kansas
23  public employees retirement fund within 20 days after the end of the
24  period covered by the remittance or within 25 days after forms or written
25  instructions from the system were mailed by the system to such employer,
26  whichever is later. Remittances of such deductions and contributions re-
27  ceived after such date are delinquent. Delinquent payments due under
28  this subsection shall be subject to interest at the rate established for in-
29  terest on judgments under subsection (a) of K.S.A. 16-204 and amend-
30  ments thereto. At the request of the board, delinquent payments which
31  are due or interest owed on such payments, or both, may be deducted
32  from any other moneys payable to such employer by any department or
33  agency of the state.
34    Sec. 8. 17.  K.S.A. 1996 Supp. 74-4957 is hereby amended to read as
35  follows: 74-4957. (1) The normal retirement date for a member of the
36  system who is appointed or employed prior to July 1, 1989, and who does
37  not make an election pursuant to K.S.A. 74-4955a and amendments
38  thereto shall be the first day of the month coinciding with or following
39  the attainment of age 55 and the completion of 20 years of credited serv-
40  ice. Any member may retire on such member's normal retirement date
41  or on the first day of any month thereafter.
42    (2)  Early retirement. Any member who is appointed or employed
43  prior to July 1, 1989, and who does not make an election pursuant to
HB 2238--Am.
                                     

 1  K.S.A. 74-4955a and amendments thereto may retire before such mem-
 2  ber's normal retirement date on the first day of any month coinciding
 3  with or following the attainment of age 50 and the completion of 20 years
 4  of credited service.
 5    (3)  Notwithstanding the provisions of subsections (1) and (2) of this
 6  section and K.S.A. 74-4955a, 74-4957a, 74-4958a, 74-4960a, 74-4963a and
 7  74-4964a and amendments thereto, the normal retirement date for any
 8  member who was, up to the entry date of such member's employer, cov-
 9  ered by a pension system under the provisions of K.S.A. 13-14a01 to 13-
10  14a14, inclusive, or 14-10a01 to 14-10a15, inclusive, and amendments
11  thereto, shall be the first day of the month coinciding with or following
12  the attainment of age 50 and the completion of 25 years of credited serv-
13  ice.
14    (4)  In no event shall a member be eligible to retire until such member
15  has been a contributing member of the system for 12 months of partici-
16  pating service, and shall have given such member's employer prior notice
17  of retirement.
18    (5)  If a retirant who retired on or after July 1, 1994, is employed,
19  elected or appointed in or to any position or office for which compensa-
20  tion for service is paid, during calendar year 1994, in an amount equal to
21  $11,160 or more; or during calendar year 1995 and all calendar years
22  thereafter,, during calendar year 1997,  in an amount equal to $11,280
23  $13,500 or more in any one such calendar year; during calendar year
24  1998, in an amount equal to $14,500 or more; during calendar year
25  1999, in an amount equal to $15,500 or more; during calendar year
26  2000, in an amount equal to $17,000 or more; during calendar year
27  2001, in an amount equal to $25,000 or more; or during calendar
28  year 2002, in an amount equal to $30,000, by the same state agency
29  or the same police or fire department of any county, city, township or
30  special district or the same sheriff's office of a county during the final two
31  years of such retirant's participation, such retirant shall not receive any
32  retirement benefit for any month for which such retirant serves in such
33  position or office. The participating employer shall report to the system
34  within 30 days of when the compensation paid to the retirant is equal to
35  or exceeds any limitation provided by this section. Any retirant employed
36  by a participating employer in the Kansas police and firemen's retirement
37  system shall not make contributions nor receive additional credit under
38  such system for such service except as provided by this section. Upon
39  request of the executive secretary of the system, the secretary of revenue
40  shall provide such information as may be needed by the executive sec-
41  retary to carry out the provisions of this act.
42    Sec. 9. 18.  K.S.A. 1996 Supp. 74-4957a is hereby amended to read
43  as follows: 74-4957a. (1) The normal retirement date for a member of
HB 2238--Am.
                                     

 1  the system who is appointed or employed on or after July 1, 1989, or who
 2  makes an election pursuant to K.S.A. 74-4955a and amendments thereto
 3  to be covered by the provisions of this act shall be the first day of the
 4  month coinciding with or following the attainment of age 55 and the
 5  completion of 20 years of credited service, age 50 and the completion of
 6  25 years of credited service or age 60 with the completion of 15 years of
 7  credited service. Any such member may retire on such member's normal
 8  retirement date or on the first day of any month thereafter.
 9    (2)  Any member may retire before such member's normal retirement
10  date on the first day of any month coinciding with or following the at-
11  tainment of age 50 and the completion of 20 years of credited service.
12    (3)  In no event shall a member be eligible to retire until such member
13  has been a contributing member of the system for 12 months of partici-
14  pating service, and shall have given such member's employer prior notice
15  of retirement.
16    (4)  If a retirant who retired on or after July 1, 1996, is employed,
17  elected or appointed in or to any position or office for which compensa-
18  tion for service is paid, during calendar year 1995 and all calendar years
19  thereafter,, during calendar year 1997, in an amount equal to $11,280
20  $13,500 or more in any one such calendar year; during calendar year
21  1998, in an amount equal to $14,500 or more; during calendar year
22  1999, in an amount equal to $15,500 or more; during calendar year
23  2000, in an amount equal to $17,000 or more; during calendar year
24  2001, in an amount equal to $25,000 or more; or during calendar
25  year 2002, in an amount equal to $30,000, by the same state agency
26  or the same police or fire department of any county, city, township or
27  special district or the same sheriff's office of a county during the final two
28  years of such retirant's participation, such retirant shall not receive any
29  retirement benefit for any month for which such retirant serves in such
30  position or office. The participating employer shall report to the system
31  within 30 days of when the compensation paid to the retirant is equal to
32  or exceeds any limitation provided by this section. Any retirant employed
33  by a participating employer in the Kansas police and firemen's retirement
34  system shall not make contributions nor receive additional credit under
35  such system for such service except as provided by this section. Upon
36  request of the executive secretary of the system, the secretary of revenue
37  shall provide such information as may be needed by the executive sec-
38  retary to carry out the provisions of this act.
39    (5)  The provisions of this section shall be effective on and after July
40  1, 1989, and shall apply only to members who were appointed or em-
41  ployed prior to July 1, 1989, and who made an election pursuant to K.S.A.
42  74-4955a and amendments thereto; and persons appointed or employed
43  on or after July 1, 1989.
HB 2238--Am.
                                     

 1    Sec. 10. 19.  K.S.A. 1996 Supp. 74-4990 is hereby amended to read
 2  as follows: 74-4990. (1) An arrearage obligation shall arise when it is as-
 3  certained that required contributions have not been made to the Kansas
 4  public employees retirement system at the required time. Such arrearage
 5  obligation shall be met by the employer by preparing a report on the
 6  appropriate form to correct all previous quarterly reports affected by the
 7  arrearage obligation. Such report shall be submitted by the employer with
 8  the first quarterly report after such an arrearage obligation is discovered
 9  or as the board of trustees of the system may otherwise prescribe. The
10  proper remittance to cover employer and employee contributions in ar-
11  rearage shall accompany such report or as the board of trustees of the
12  system may otherwise prescribe for all arrearages other than for the year
13  of service as provided in K.S.A. 74-4911 and amendments thereto. In
14  addition, the employer will pay to the system, interest at the current ac-
15  tuarial interest rate assumption adopted by the board. If the employee
16  retires within 24 months of the employer first reporting this arrearage,
17  the employer will pay to the system a lump sum amount equal to the
18  difference of the actuarial present value of the retirement benefit and the
19  accumulated value of any contributions represented by the arrearage. No
20  employee shall pay all or any part of the arrearage. The amounts due for
21  an arrearage obligation shall be based upon the compensation paid to the
22  member and at the rates in effect at the time the contributions were
23  originally due to be paid to the system. The employer shall not be required
24  to pay the employee contributions or interest on arrearages of six month
25  or less.
26    (2)  An arrearage obligation shall arise when it is ascertained that the
27  employee and employer should have made contributions to the Kansas
28  public employees retirement system for all or part of the year of service
29  as provided in K.S.A. 74-4911 and amendments thereto. Such arrearage
30  obligation shall be met by the employer by preparing a report on the
31  appropriate form to correct all previous reports affected by the arrearage
32  obligation. Such report shall be submitted by the employer with the first
33  report after such an arrearage obligation is discovered or as the board of
34  trustees of the system may otherwise prescribe. The proper remittance to
35  cover employer contributions in arrearage shall accompany such report
36  or as the board of trustees of the system may otherwise prescribe. The
37  amounts due for an arrearage obligation shall be based upon compensa-
38  tion paid to the member and at the rates in effect at the time contributions
39  were originally due to be paid to the system.
40    (2)(3)  In the event the proper remittance to cover employee contri-
41  butions in arrearage does not accompany such report, service credits for
42  that period of employment involving the arrearage obligation may be pur-
43  chased by the member as participating service at any time prior to re-
HB 2238--Am.
                                     

 1  tirement by making application therefor and paying to the system a single
 2  lump-sum amount determined by the system's actuary using (a) the mem-
 3  ber's then current annual rate of compensation, or if not actively em-
 4  ployed, the member's annual rate of compensation when last participating
 5  and (b) the actuarial assumptions and tables currently in use by the sys-
 6  tem.
 7    (3)(4)  Except as otherwise provided in this section, any member may
 8  purchase participating service credits for that period of employment in-
 9  volving the arrearage obligation as described in this section, if first com-
10  menced prior to January 1, 1996, by electing to effect such purchase by
11  means of having employee contributions as provided in K.S.A. 74-4919
12  and amendments thereto deducted from such member's compensation
13  at a percentage rate equal to two times or three times the employee's rate
14  of contribution as provided in K.S.A. 74-4919 and amendments thereto
15  for such periods of service, in lieu of a lump-sum amount as provided in
16  this section. Such deductions shall commence at the beginning of the
17  quarter following such election and shall remain in effect until all quarters
18  of such service have been purchased. Any person may make any such
19  purchase as described in this section, if first commenced in calendar year
20  1996 or thereafter, at an additional rate of contribution, in addition to the
21  employee's rate of contribution as provided in K.S.A. 74-4919 and amend-
22  ments thereto, based upon the member's attained age at the time of
23  purchase and using actuarial assumptions and tables in use by the retire-
24  ment system at such time of purchase, for such periods of service, in lieu
25  of a lump-sum amount as provided in this section. Such additional rate
26  of contribution shall commence at the beginning of the quarter following
27  such election and shall remain in effect until all quarters of such service
28  have been purchased.
29    (4)(5)  Notwithstanding the provisions of this section, no employee
30  contributions shall be due and owing for stipulated compensation
31  amounts paid to any employee or former employee of a city of the first
32  class whose dispute with such city was settled by stipulation of settlement
33  either in Case No. 90-2328-0 in the United States District Court for the
34  District of Kansas or in Case No. 91-1182 in the Supreme Court of the
35  United States. Any such employee or former employee may elect to remit
36  such employee contributions to the system. No employee or former em-
37  ployee whose contributions are deemed not to be due or owing or who
38  did not elect to remit such employee contributions to the system as pro-
39  vided in this section according to this provision shall have any claim
40  against the Kansas public employees retirement system for any retire-
41  ment, disability, death or survivors benefit or any return of accumulated
42  contributions based on such contributions or on the compensation
43  amounts that would have been reflected by such contributions.
HB 2238--Am.
                                     

 1    New Sec. 11. 20.  (1)  Notwithstanding the provisions of subsection
 2    (9) of K.S.A. 74-4902 and amendments thereto, any payment for accu-
 3  mulated sick leave, vacation or annual leave, severance pay or any other
 4  payments to the member determined by the board to not be payments
 5  for personal services performed for a participating employer which, when
 6  upon retirement, increases the member's final average salary by more
 7  than 15%, shall require the participating employer to pay the system a
 8  lump sum amount equal to the system's actuarial liability for benefits
 9  attributable to and payable on account of such excess over the 15%.
10    (2)  As used in this section, ``system'' means the Kansas public em-
11  ployees retirement system, the Kansas police and firemen's retirement
12  system and the retirement system for judges.
13    New Sec. 12.  Any employee of a participating employer who is a
14  member of the Kansas public employees retirement system, who was
15  previously employed in Kansas in nonfederal governmental employment
16  with an employer who has not affiliated with the system under K.S.A. 74-
17  4910 and amendments thereto, and which service otherwise meets the
18  requirements of an employee as prescribed in subsection (14) of K.S.A.
19  74-4902 or subsection (4) of K.S.A. 74-4932 and amendments thereto,
20  may elect to purchase participating service for such in-state nonfederal
21  governmental employment. The benefit for each such year of employ-
22  ment shall be equal to 1% of the final average salary of any such member.
23    Such member may purchase such participating service by making appli-
24  cation therefor prior to the date of retirement at an additional rate of
25  contribution in addition to the employee's rate of contribution as provided
26  in K.S.A. 74-4919 and amendments thereto, based upon the member's
27  attained age at the time of purchase and using actuarial assumptions and
28  tables in use by the retirement system at the time of such purchase. Such
29  additional rate of contribution shall commence at the beginning of the
30  quarter following such election and shall remain in effect until all quarters
31  of such service have been purchased. Any such member may purchase
32  such participating service as described in this section by electing to effect
33  such purchase by means of a single lump sum payment in lieu of employee
34  contributions as provided in this section in an amount equal to the then
35  present value of the benefits being purchased as determined by the ac-
36  tuary using the member's attained age, annual compensation at the time
37  of purchase and the actuarial assumptions and tables then in use by this
38  system. The lump sum payment shall be made immediately upon being
39  notified of the amount due. No purchase of service or any part thereof
40  will be nullified by the subsequent affiliation of an employer with the
41  system.
42    New Sec. 21.  (1) Any payment made to a named beneficiary as
43  provided in this section, shall be a full discharge and release to the
HB 2238--Am.
                                     

 1  system from any further claims. Any payment made to a benefici-
 2  ary as provided in clauses (A), (B), (C), (D), (E) or (F) of subsection
 3    (7) of K.S.A. 74-4902 or in clauses (1), (2), (3), (4), (5) or (6) of
 4  subsection (k) of K.S.A. 20-2601, and amendments thereto, as de-
 5  termined by the board, shall be a full discharge and release to the
 6  system from any further claims. Whenever any payment is payable
 7  to more than one beneficiary such payment shall be made to such
 8  beneficiaries jointly.
 9    (2)  Any benefits payable to a beneficiary or beneficiaries who
10  are incompetent shall be made in the name of the beneficiary or
11  beneficiaries and delivered to the lawfully appointed conservator
12  of such beneficiaries who was nominated by will or as otherwise
13  provided by law, except that in those cases where the benefit in-
14  volves an amount not to exceed $500, the board is hereby author-
15  ized in its discretion without the appointment of a conservator or
16  in the giving of a bond to pay such amount as is due to the incom-
17  petent person or persons themselves.
18    (3)  Any lump-sum benefits payable to a beneficiary or benefi-
19  ciaries who are minor children and which amount totals $10,000
20  or more shall be made in the name of the beneficiary or benefi-
21  ciaries and delivered to the lawfully appointed conservator of such
22  beneficiaries who was nominated by will or as otherwise provided
23  by law except that in those cases where the benefit involves an
24  amount not to exceed $500, the board is hereby authorized in its
25  discretion without the appointment of a conservator or the giving
26  of a bond to pay such amount as is due to the minor or minors
27  themselves. If no conservator is lawfully appointed, the system will
28  credit interest at 4% on all benefits due and payable and shall pay
29  all benefits plus interest to the beneficiary or beneficiaries who
30  are minor children when they attain age 18 years. Any benefits
31  payable to a beneficiary or beneficiaries who are minor children
32  and which amount which totals more than $500 but less than
33  $10,000, may be made in the name of the beneficiary or benefi-
34  ciaries and paid under the uniform transfers to minors act as pro-
35  vided in K.S.A. 38-1701 et seq. and amendments thereto.
36    (4)  Any monthly benefits payable to a beneficiary or benefici-
37  aries who are minor children shall be made in the name of the
38  beneficiary or beneficiaries and delivered to the lawfully ap-
39  pointed conservator of such beneficiaries who was nominated by
40  will or as otherwise provided by law. If no conservator is lawfully
41  appointed, the system will credit interest at 4% on all benefits due
42  and payable and shall pay all benefits plus interest to the benefi-
43  ciary or beneficiaries who are minor children when they attain age
HB 2238--Am.
                                     

 1  18 years.
 2    (5)  As used in this section, ``system'' means the Kansas public
 3  employees retirement system, the Kansas police and firemen's re-
 4  tirement system and the retirement system for judges.
 5    Sec. 13. 22.  K.S.A. 20-2610, 20-2620 and 72-5501 and K.S.A. 1996
 6  Supp. 20-2601, 74-4902, 74-4904, 74-4908, 74-4910, 74-4911f, 74-
 7  4913, 74-4914, 74-4914e, 74-4919a, 74-4919c, 74-4919h, 74-4920,
 8  74-4957, 74-4957a and 74-4990 are hereby repealed.
 9    Sec. 14. 23.  This act shall take effect and be in force from and after
10  its publication in the statute book.