Request By:
Hon. Theresa L. Holmes
Corporate Counsel
Lexington-Fayette Urban County Government
Department of Law
The Municipal Building
136 Walnut Street
Lexington, Kentucky 40507
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Patrick B. Kimberlin, III, Assistant Attorney General
This is in response to your recent letter wherein you ask our opinion as to a number of questions pertaining to current employees of the Lexington-Fayette Urban County Government who participate in City Employees Pension Fund (CEPF), but now seek to elect delayed participation in the County Employees Retirement System (CERS). We shall answer these questions seriatim.
1. May employees presently covered by the City Employees Pension Fund (CEPF) who did not elect County Employees Retirement System (CERS) coverage when the Urban County Government joined CERS now individually, or in groups, elect CERS coverage?
It is our opinion that KRS 61.552(2) clearly permits the employees described above to now elect participation in the CERS. However, as noted in KRS 61.552(2), these employees must pay to the CERS a delayed contribution payment for service they would have received had they elected membership initially. And, the employee alone must bear the cost of purchasing this service. See KRS 61.510(22).
2. If such a transfer is possible, would the Urban County Government be required to purchase past service credit for those employees transferring now as it did for other employees under the alternate participation plan chosen in 1975?
We do not believe that the Urban County Government would be required to purchase past service credit for the above mentioned employees as it did for those Urban County Government employees who elected participation in the CERS in 1975. Our opinion is predicated upon the fact that the statutory requirement in KRS 78.530(3)(a) was limited solely to that point in time when the alternate participation plan was adopted and when the 1 Urban County Government initiated its participation in the CERS. Thus, those individuals employed at that time who chose not to participate in the CERS, but now wish to do so, have no right to demand that the Urban County Government purchase their past service credit for them.
3. Would the CEPF be required to pay over to CERS employee contributions as it did when the Urban County Government elected CERS coverage?
We do not believe the CEPF would be required to pay over to the CERS employee contributions as it did when the Urban County Government initially elected CERS coverage. This "pay over" arrangement permitted under KRS 78.531(2) must, we believe, be read in pari materia with KRS 78.530(3)(a) which, as previously noted, created a "one time only" opportunity for Urban County Government employees. 2 The cost of purchasing past service would fall solely upon the employee by making a delayed contribution payment pursuant to KRS 61.552(2) and KRS 61.510(22).
Footnotes
Footnotes
1 KRS 78.530(3)(a) reads as follows:
"Concurrent with the adoption of the appropriate resolution to participate in the system, a county may relect the alternate participation plan which will require the county to purchase on behalf of each employe electing coverage, at the time the county elected to participate in the system as provided under KRS 78.540(2) current service credit between July 1, 1958 and the participation date of the county. Cost of such service credit over and above that which would be funded within the existing employer contribution rate shall be determined by the board's consulting actuary. The expenses of such actuarial service shall be paid by the county."
2 In fact, KRS 78.531(2) makes specific reference to KRS 78.530(3).