Request By:
Byron Lee Hobgood
City Attorney
City of Madisonville
Madisonville, Kentucky 42431
Opinion
Opinion By: Steven L. Beshear, Attorney General; Walter C. Herdman, Assistant Deputy Attorney General
This is in response to your letter of March 25, in which you relate that the City of Madisonville is a fourth class city operating its police and fire departments under civil service and has established a pension fund for both departments. A fireman who was employed on August 29, 1972 until July 13, 1979, when he resigned, has requested that his pension contributions made during his employment be reimbursed to him. Under the circumstances you desire to know whether Kentucky law requires that such a reimbursement be made.
You do not indicate the civil service act pursuant to which the City of Madisonville operates. Being a city of the fourth class it may operate its police and fire departments under the provisions of KRS 95.761 to 95.784 or under an alternate method pertaining to third class cities under KRS 95.520 to 95.620. The city may also place its police and fire departments under the general civil service act, KRS 90.300 to 90.420, pursuant to KRS 95.761.
The only act, however, authorizing a refund of contributions to those covered employees leaving service prior to retirement, is found under KRS 95.620(2), and is purely discretionary on the part of the board of trustees. For your information we are enclosing a copy of OAG 72-431 explaining this particular act. We are also enclosing a copy of OAG 72-735 dealing with this aspect of the law as it relates to Chapter 90 KRS.
We might also point out that even though there is no specific authorization for refunding pension contributions to covered employees leaving service prior to retirement we have taken the position in OAG 79-351 (copy attached) that the city legislative body could in its discretion pursuant to ordinance authorize a refund of all or any portion of an employee's contributions.
In answer to your specific question, however, it is apparent that under the various civil service statutes referred to the City of Madisonville is not required by law to reimburse such contributions under the theory that contributions to a pension fund have no vested right in the fund until they become an actual beneficiary. See