Request By:
The Honorable H. Foster Pettit, Chairman
Policemen's and Firemen's Retirement
Fund of the Lexington-Fayette
Urban County Government
The Municipal Building
136 Walnut Street
Lexington, Kentucky 40507
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General
This is in answer to your letter of July 5 in which you, on behalf of the Board of Trustees of the Policemen's and Firemen's Retirement Fund, request an opinion as to whether the administrative expenses incurred by the Board with respect to administering the retirement fund should be paid out of the annual contribution required to be made by the urban county government to said fund [the conclusion reached by the Department of Law] rather than as a "separate pay item".
Our response to your question would be in the affirmative in view of the specific language found in KRS 67A.640, which reads as follows:
"It is the intention of KRS 67A.360 to 67A.690 that the payment of the required contributions by the government shall include all allowances, annuities, benefits, and administration expenses and shall be the obligation of the government." (Emphasis added).
It appears to be clear in reading the above statute that the contributions to the pension fund required to be made by the urban county government pursuant to KRS 67A.520 are to be used for administration expenses as well as for pension benefits. We reach this conclusion in spite of the language found in KRS 67A.520 indicating that the government's contributions to the fund are made for annuities and benefits provided for under the act since KRS 67A.640 is more detailed and specific concerning the required utilization of the fund.
KRS 67A.360 to 67A.690 in effect supercedes KRS 95.851 to 95.885. This latter act, and particularly KRS 95.880, indicates on the other hand that administration expenses would be a separate obligation of the city. For your information, this statute reads as follows:
"It is the intention of KRS 95.851 to 95.885 that the payment of the required contributions by the city, all allowances, annuities, benefits, and administration expenses shall be the obligation of the city."
You will note the difference in the language of each statute which leads us to the conclusion that upon the effective date of July 1, 1974, when KRS 67A.640 became effective, the administration expenses connected with the pension fund must come from the urban county government's required contribution to said fund rather than constitute a so-called "separate pay item". As a consequence, we believe that the opinion of the Urban County Government's Department of Law, dated April 26, 1977, with respect to this question is correct.