102 KAR 1:240. Increase in compensation limit.

      RELATES TO: 26 U.S.C. 401(a)(17)

      STATUTORY AUTHORITY: KRS 161.310, 161.716

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Teachers' Retirement System of the state of Kentucky to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.716 requires the Board of Trustees to promulgate administrative regulations as are necessary to remove any conflicts with federal laws and to protect the interests of the members and survivors of members of the retirement system. This administrative regulation establishes the increase in compensation limit as provided by the Internal Revenue Code, 26 USC 401(a)(17)(A).

      Section 1. Definition. "Annual compensation" is defined in KRS 161.220(10).

      Section 2. Increase in Limit. The annual compensation of each member taken into account in determining benefit accruals in any plan year beginning after December 31, 2001, shall not exceed $200,000. For purposes of determining benefit accruals in a plan year beginning after December 31, 2001, compensation for any prior determination period shall be limited as provided in Section 3 of this administrative regulation.

      Section 3. Cost-of-living Adjustment. The $200,000 limit on annual compensation in Section 2 of this administrative regulation shall be adjusted for cost-of-living increases in accordance with 26 USC 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living adjustment in effect for a calendar year shall apply to annual compensation for the determination period that begins with or within the calendar year.

      Section 4. In determining benefit accruals in plan years beginning after December 31, 2001, the annual compensation limit in Section 2 of this administrative regulation shall be:

      (1) $150,000 for any determination period beginning in 1996 or earlier for members who became participants on or after July 1, 1996.

      (2) $160,000 for any determination period beginning in 1997, 1998, or 1999 for members who became participants on or after July 1, 1996.

      (3) $170,000 for any determination period beginning in 2000 or 2001 for members who became participants on or after July 1, 1996. (28 Ky.R. 2113; Am. 2324; eff. 5-16-2002.)