Active Members ...
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Service Credit Purchases
at Full Actuarial Cost
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Full Actuarial Cost Purchases
The methodology for calculating the full actuarial cost of service credit purchases is subject to periodic review by the retirement system's actuary and may be adjusted if necessary to ensure that the full actuarial cost is charged.

The actual cost of the service credit purchase is calculated at the time of retirement and is based on the member's age and average salary at the time of retirement as well as the amount of KTRS benefit increase received due to the purchase of the service credit. A KTRS Counselor can provide an estimate of the cost as part of the KTRS Retirement Benefit Estimate Calculation.

Prior Military and Public Health Service
You may receive service credit for up to six (6) years of active military service or service in the commissioned corps of the Public Health Services if you are in active contributing status, were in the military or Public Health Service prior to your employment in a position covered by KTRS, and purchase the credit prior to retirement. Service may be credited only if the discharge was honorable. To obtain a statement of cost and service credit, send KTRS an official copy of your Form DD 214 or other official military records establishing your dates of entry and release from active duty. KRS 161.507(4)(a) requires you to contribute 100% of the actuarial cost of each year of military service credited. Prior military service is considered Kentucky teaching service, but does not count toward vesting your account. If you are drawing or eligible to draw retirement benefits for twenty (20) or more years of active duty military service, you are not eligible to purchase military service credit. No credit shall be granted for service that is being used to qualify for annuity benefits from another retirement system financed wholly or in part with public funds.

Military Service After Becoming a Member of KTRS
You may also receive service credit for military service that occurs after you become a member of KTRS if you give your employer advance written or verbal notice of performing military service and you return directly to covered employment following the military service. Contributions are based upon the salary you would have earned during the period of your absence for military service plus interest at eight percent (8%) per annum.

If you are drawing or eligible to draw retirement benefits for twenty (20) or more years of active duty military service, you are not eligible to purchase military service credit. No credit shall be granted for service that is being used to qualify for annuity benefits from another retirement system financed wholly or in part with public funds.

House Bill 79, enacted during the 2006 General Assembly, provides that the Commonwealth of Kentucky shall pay the member contribution for all certified staff employed in the local school districts who are members of a state National Guard or Reserve component ordered to active military duty by the President of the United States. In order to qualify, members must timely return to employment in their districts upon release from active duty. Only upon a timely return to employment is the Commonwealth obligated to pay the member contribution. House Bill 79 became effective on July 12, 2006. It was not given a retroactive application, so the Commonwealth is obligated to pay the member contribution only for those members who timely returned to employment in their local school districts on or after July 12, 2006.

In addition to state law, the Uniformed Services Employment and Re-employment Rights Act (USERRA) provides federal guidelines for continued participation in KTRS while you are on active duty. KTRS can provide you only with very limited, general information regarding USERRA as this is a federal law subject to federal amendment and interpretation. Therefore, you should always contact the federal authorities charged with the administration of USERRA if you have any questions regarding its application to your individual circumstances. The National Committee for Employer Support of the Guard and Reserves maintains a USERRA website at www.esgr.org. You may also contact their toll-free number at (800) 336-4590 and ask for Ombudsmen Services.

National Guard and the Military Reserves
Active contributing members of KTRS may receive service credit for service in the military reserves or the National Guard. The member may purchase one (1) month of service for each six (6) months of service in the reserves or the National Guard. The member shall pay the full actuarial cost for this service. This service cannot be used in meeting the service requirements for either regular service retirement or disability retirement. If you are drawing or eligible to draw retirement benefits for twenty (20) or more years of active duty military service, you are not eligible to purchase National Guard or military reserve service as service credit. No credit shall be granted for service that is being used to qualify for annuity benefits from another retirement system financed wholly or in part with public funds.

Out-of-State Service
If you are an active contributing member of KTRS with at least one year of KTRS service subsequent to the latest out-of-state service and you contributed to KTRS prior to July 1, 1976, you are eligible to purchase retirement service credit for up to ten (10) years of certifiable out-of-state service performed in a public school or United States Government Dependency School. If you entered KTRS on or after July 1, 1976, you may purchase one (1) year of out-of-state service credit for every two (2) years of Kentucky service completed. Members who joined the System on or after July 1, 1976, and have completed ten (10) years of Kentucky service, may purchase credit for up to ten (10) years of acceptable out-of-state service. Only full-time out-of-state service is purchasable. Part-time and substitute service are not. Credit will not be granted for service that is being or will be used in qualifying for annuity benefits from another state.

You may purchase retirement credit for out-of-state teaching service rendered under contract in public schools in another state, or service performed at the University of Kentucky, University of Louisville, and Northern Kentucky University. Members may purchase out-of-state teaching service by paying the full actuarial cost of the service. Out-of-state credit counts the same as Kentucky service when calculating your retirement benefit, but it does not count toward the five (5) years of Kentucky service required for vesting. However, for members who purchased out-of-state service prior to July 1, 2005, an additional charge must be paid to use this service to qualify for retirement based only on achieving twenty-seven (27) years of service since out-of-state service purchased prior to July 1, 2005 was not based upon the current full actuarial cost formula. This additional charge is computed by multiplying 8% times your final average salary at retirement for each year of out-of-state service that is qualified. Members age sixty (60) or older are not required to pay the additional charge, unless out of state service is used to qualify for the three (3) year final average salary formula. In this case, members are required to make the qualifying payment at retirement.

If you wish to obtain retirement credit for out-of-state service, you must have your former employer certify your service to KTRS on forms prescribed by KTRS. Upon receipt of the certification, KTRS will notify you concerning the amount of service you may purchase and the cost. Out-of-state service may be purchased at any time by an active contributing member, however, all service credit purchases are subject to a final reconciliation and correction at the time of retirement. Following the reconciliation, any members who overpaid for their service will receive a refund, while any members who underpaid will be required to make an additional payment

Peace Corps Service Credit
If you have completed service as a federal Peace Corps volunteer you may be eligible to purchase retirement system credit for your service. Members who are eligible may purchase up to two (2) years of qualifying service credit. Peace Corps service is purchasable at full actuarial cost. Peace Corps service purchased prior to July 1, 2005 was purchased under a different formula than the current full actuarial cost formula. As such, for purchases under the old formula an additional charge must be paid to use this service to qualify for retirement based only on achieving twenty-seven (27) years of service. To obtain a statement of your cost and purchasable credit, send KTRS a certified copy of your Certification of Peace Corps Volunteer Service. No credit shall be granted for service that is being used to qualify for annuity benefits from another retirement system financed wholly or in part with public funds.

Non-Qualified Service Credit
An active contributing member who has a minimum of twenty (20) years of service credit may purchase up to a maximum of five (5) years of service credit not otherwise provided for in the KTRS statutes and which meets the definition of nonqualified service as contained in federal law. Non-qualified service is purchasable only at full actuarial cost. All service credit purchases are subject to a final reconciliation and correction at the time of retirement. Following the reconciliation, any members who overpaid for their service will receive a refund, while any members who underpaid will be required to make an additional payment.

Federal Head Start Service
An active contributing member of KTRS who was formerly employed by a federal Head Start Agency and who did not participate in a state-administered retirement system may obtain KTRS service credit for the period of the member's Head Start service. Federal Head Start service is purchasable at full actuarial cost.

Regional Community Mental Health
and Mental RetardationService Program

An active contributing member of KTRS who was formerly employed by a Regional Community Mental Health and Mental Retardation Service Program and who did not participate in a state-administered retirement system may obtain credit for the period of the member's service by paying the full actuarial cost of the service credit purchased.
479 Versailles Road, Frankfort, Kentucky 40601 / Phone: 1-800-618-1687