SENATE BILL No. 382

      An Act concerning retirement and pensions; relating to plan compliance with federal law;
      amending K.S.A. 12-5007, 13-14a02, 13-14a05, 13-14a06, 13-14a13, 14-10a02, 14-
      10a05, 14-10a06, 14-10a13, 20-2603, 20-2606, 20-2610a, 20-2618, 20-2620, 20-2621, 72-
      5501, 72-5512, 72-5518, 72-5520, 74-4911c, 74-4911e, 74-4912, 74-4919, 74-4919b, 74-
      4919f, 74-4919i, 74-4919l, 74-4927a, 74-4927b, 74-4927h, 74-4928, 74-4933, 74-4935,
      74-4936, 74-4942, 74-4953, 74-4954b, 74-4962, 74-4977, 74-4985, 74-4998b, 74-4998c,
      74-4998g, 74-49,100 and 74-49,107 and K.S.A. 1997 Supp. 12-5002, 12-5005, 13-14a07,
      13-14a10, 14-10a07, 20-2601, 74-4902, 74-4909, 74-4911, 74-4911f, 74-4913, 74-4916,
      74-4917a, 74-4918, 74-4919a, 74-4919c, 74-4919d, 74-4919g, 74-4919h, 74-4919j, 74-
      4919m, 74-4919n, 74-4919o, 74-4922, 74-4923, 74-4927, 74-4932, 74-4935c, 74-4936a,
      74-4952, 74-4956, 74-4958, 74-4958a, 74-4959, 74-4960, 74-4960a, 74-4963, 74-4963a,
      74-4964, 74-4964a, 74-4965, 74-4965a, 74-4992 and 74-49,105 and repealing the existing
      sections; also repealing K.S.A. 20-2619, 72-5531, 74-4911g, 74-4973, 74-4978b, 74-4981
      and 74-49a133 and K.S.A. 1997 Supp. 74-4911b.

Be it enacted by the Legislature of the State of Kansas:

    Section 1. K.S.A. 1997 Supp. 12-5002 is hereby amended to read as
follows: 12-5002. (a) From and after January 1, 1978, no city may maintain
or fund any local police or fire pension plan except in accordance with
the minimum funding standards prescribed in this section.

    (b) From and after January 1, 1978, and notwithstanding any other
provision of law to the contrary, all cities maintaining and funding any
local police or fire pension plan shall make annual contributions to each
local police or fire pension plan at an annual rate of contribution which
is equal to or greater than the minimum annual rate of contribution which
is determined pursuant to subsections (c) or (d), except as otherwise spe-
cifically authorized pursuant to subsection (g). Such minimum annual rate
of contribution shall be equal to the sum of: (1) The actuarially deter-
mined amount required to amortize over a period of not more than 40
years from January 1, 1978, the accrued unfunded liabilities of such plan
which are attributable to active members; (2) the amount required to
amortize over a period of not more than 20 years from January 1, 1978,
the accrued unfunded liabilities of such plan which are attributable to
retired members; and (3) the normal or ongoing costs attributable to
active members. In each year until the local police or fire pension plan is
funded on an actuarial reserve basis as required by this section and has
no accrued unfunded liability attributable to active members or retired
members, the total of such annual contributions shall not be less than the
total amount of pension benefits paid in such year.

    (c) All cities which will maintain and fund one or more local police
or fire pension plans on and after January 1, 1978, and which do not elect
pursuant to subsection (d) to use the services of an actuary or firm of
actuaries other than the actuary of the board of trustees, shall furnish to
the board of trustees all necessary data, as determined by the board of
trustees, at times designated by the board of trustees, but not more often
than annually, from which the minimum annual rate of contribution for
each such plan may be determined. Upon the basis of an actuarial analysis
of such data, the board of trustees shall certify, commencing on or before
June 1, 1977, and at least once every three years thereafter, to each such
city the actuarially determined minimum annual rate of contribution
which will be required for each such plan in accordance with subsection
(b) for the ensuing calendar year. All costs involved in making certifica-
tions under this subsection shall be paid by each such city.

    (d) Any city which will maintain and fund one or more local police
or fire pension plans on and after January 1, 1978, may elect to use and
pay for the services of an actuary or firm of actuaries other than the
actuary of the board of trustees as provided in subsection (c), in order to
determine the minimum annual rate of contribution for such city for all
such plans. Each city so electing shall file a statement of election with the
board of trustees, setting forth the name and address of the actuary or
firm of actuaries selected by such city and requesting approval thereof.
The board of trustees shall approve such actuary or firm of actuaries for
performance of the periodic actuarial evaluation and review of all the local
police or fire pension plans maintained and funded by such city and for
determination of the minimum annual contribution for each such plan in
accordance with this section if the board of trustees finds that such actuary
or firm of actuaries is qualified therefor. The approved actuary or firm of
actuaries shall perform such actuarial evaluation and review and shall
determine the minimum annual contribution for each local police or fire
pension plan in accordance with this section and shall report annually
thereon to the board of trustees in such form and manner as may be
prescribed by rules and regulations of the board of trustees. The approval
of an actuary or firm of actuaries under this subsection (d) shall be ef-
fective until the city requests approval of another actuary or firm of ac-
tuaries or until the city acts to use the services of the actuary of the board
of trustees under subsection (c) by withdrawing the statement of election
filed under this subsection (d).

    (e) In accordance with the provisions of K.S.A. 77-415 et seq. and
amendments thereto, the board of trustees shall adopt rules and regula-
tions which establish actuarial standards and assumptions for the purposes
of actuarial evaluation and review of local police or fire pension plans and
determination of the minimum annual rates of contribution for cities
maintaining and funding such plans. Whenever the amount of any benefit
is to be determined on the basis of actuarial standards and assumptions,
the standards and assumptions shall be specified in a way that precludes
employer discretion.

    (f) Prior to the adoption by a city of any proposed changes in the
benefit provisions of a local police or fire pension plan or in the rate of
employee contributions thereto, the governing body of the city shall ob-
tain an actuarial evaluation of the effect of such changes, including an
estimate of the minimum annual contribution which would be required
under this section if such changes are adopted. Such actuarial evaluation
and determination shall be conducted by the actuary of the board of
trustees or by the actuary or firm of actuaries approved under subsection
(d) and all costs incurred therefor shall be paid by the city.

    (g) The governing body of any city which is required to make annual
contributions at a minimum annual rate to each local police or fire pension
plan maintained and funded by the city in accordance with this section
and which determines that such minimum annual rate of contributions
would place an undue initial hardship on the property taxpayers of such
city, may adopt a resolution to that effect and file a certified copy of such
resolution with the board of trustees prior to January 1, 1978. Any city
which has filed a certified copy of such resolution with the board of trus-
tees prior to January 1, 1978, may make annual contributions in accord-
ance with the following schedule:

    (1) Contributions for the calendar year 1978 shall be at a rate equal
to or greater than the total of: (A) Thirty-three and one-third percent of
the actuarially determined amount required to amortize over a period of
not more than 40 years from January 1, 1978, the accrued unfunded
liabilities of such plan which are attributable to active members; (B)
331/3% of the amount required to amortize over a period of not more than
20 years from January 1, 1978, the accrued unfunded liabilities of such
plan which are attributable to retired members; and (C) the normal or
ongoing costs attributable to active members.

    (2) Contributions for the calendar year 1979 shall be at a rate equal
to or greater than the total of: (A) Sixty-six and two-thirds percent of the
actuarially determined amount required to amortize over a period of not
more than 39 years from January 1, 1979, the accrued unfunded liabilities
of such plan which are attributable to active members; (B) 662/3% of the
amount required to amortize over a period of not more than 19 years
from January 1, 1979, the accrued unfunded liabilities of such plan which
are attributable to retired members; and (C) the normal or ongoing costs
attributable to active members.

    (3) Contributions for the calendar year 1980 and each year thereafter
shall be at a rate equal to or greater than the total of: (A) One hundred
percent of the actuarially determined amount required to amortize over
a period of not more than 38 years from January 1, 1980, the accrued
unfunded liabilities of such plan which are attributable to active members;
(B) 100% of the amount required to amortize over a period of not more
than 18 years from January 1, 1980, the accrued unfunded liabilities of
such plan which are attributable to retired members; and (C) the normal
or ongoing costs attributable to active members.

    (4) In each year until the local police or fire pension plan is funded
on an actuarial reserve basis as required by this section in accordance
with this schedule and has no accrued unfunded liability attributable to
active members or retired members, the total of such annual contribu-
tions shall not be less than the total amount of pension benefits paid in
such year.

    Sec. 2. K.S.A. 1997 Supp. 12-5005 is hereby amended to read as
follows: 12-5005. (a) Every retired member of a local police or fire pen-
sion plan and every active member of the plan who is entitled to make
an election to become a member of the Kansas police and firemen's re-
tirement system pursuant to K.S.A. 12-5003 or 74-4955 and amendments
thereto and who does not so elect shall become a special member of the
Kansas police and firemen's retirement system on the entry date of the
city which is affiliating with the Kansas police and firemen's retirement
system with regard to all active members and retired members of the
local police or fire pension plan under K.S.A. 74-4954 and amendments
thereto.

    (b) Beginning with the first payroll for services as a policeman or
fireman after an active member of a local police or fire pension plan
becomes a special member of the Kansas police and firemen's retirement
system under this section, the city shall deduct from the compensation
of each special member the greater of 7% or the percentage rate of con-
tribution which the active member was required to contribute to the local
police or fire pension plan preceding the entry date of the city, as em-
ployee contributions. The deductions shall be remitted quarterly, or as
the board of trustees otherwise provides, to the executive secretary of the
Kansas public employees retirement system for credit to the Kansas pub-
lic employees retirement fund. All deductions shall be credited to the
special members' individual accounts beginning on July 1 of the year
following the entry date of the city for purposes of all active and retired
members of the local police and fire pension plan.

    (c) Except as otherwise provided in this act, each active member of
a local police or fire pension plan who becomes a special member of the
Kansas police and firemen's retirement system under this section shall be
subject to the provisions of and entitled to pensions and other benefits,
rights and privileges to the extent provided under the local police and fire
pension plan on the day immediately preceding the entry date of the city
which is affiliating with the Kansas police and firemen's retirement system
with regard to all active members and retired members of the plan.

    (d) Each retired member of a local police or fire pension plan who
becomes a special member of the Kansas police and firemen's retirement
system under this section shall be entitled to receive from the Kansas
police and firemen's retirement system a pension or any other benefit to
the same extent and subject to the same conditions as existed under the
local police or fire pension plan on the day immediately preceding the
entry date of the city which is affiliating with the system with regard to
all active members and retired members of the plan under K.S.A. 74-
4954 and amendments thereto, except no retired special member shall
be appointed in or to a position or office for which compensation is paid
for service to the same state agency, or the same police or fire department
of a city, township, special district or county or the same sheriff's office
of a county. This subsection shall not apply to service rendered by a
retiree as a juror, as a witness in any legal proceeding or action, as an
election board judge or clerk or in any other office or position of a similar
nature. However, all such benefits paid shall be paid in accordance with
the applicable requirements under section 401 (a)(9) of the federal inter-
nal revenue code of 1986 as applicable to governmental plans, as in effect
on July 1, 1998, and the regulations thereto, as in effect on July 1, 1998.
Any retiree employed by a participating employer in the Kansas police
and firemen's retirement system shall not make contributions or receive
additional credit under the system for that service. This subsection, except
as it relates to contributions and additional credit, shall not apply to the
employment of any retiree by the state of Kansas, or any county, city,
township, special district, political subdivision or instrumentality of any
one or several of the aforementioned for a period of not exceeding 30
days in any one calendar year.

    (e) (1) Every pension or other benefit received by any special mem-
ber pursuant to subsection (c) or (d) is hereby made and declared exempt
from any tax of the state of Kansas or any political subdivision or taxing
body of this state; shall not be subject to execution, garnishment, attach-
ment or any other process or claim whatsoever, except such pension or
benefit or any accumulated contributions due and owing from the system
to such special member are subject to decrees for child support or main-
tenance, or both, as provided in K.S.A. 60-1610 and amendments thereto;
and shall be unassignable, except that within 30 days after the death of a
retirant the lump-sum death benefit payable to a retirant pursuant to the
provisions of K.S.A. 74-4989 and amendments thereto may be assignable
to a funeral establishment providing funeral services to such retirant by
the beneficiary of such retirant. The Kansas public employees retirement
system shall not be a party to any action under article 16 of chapter 60
of the Kansas Statutes Annotated, and amendments thereto, and is subject
to orders from such actions issued by the district court of the county
where such action was filed. Such orders from such actions shall specify
either a specific amount or specific percentage of the amount of the pen-
sion or benefit or any accumulated contributions due and owing from the
system to be distributed by the system pursuant to this act.

    (2) Every pension or other benefit received by any special member
pursuant to subsection (c) or (d) is hereby made and declared exempt
from any tax of the state of Kansas or any political subdivision or taxing
body of this state; shall not be subject to execution, garnishment, attach-
ment or any other process or claim whatsoever, except such pension or
benefit or any accumulated contributions due and owing from the system
to such special members are subject to claims of an alternate payee under
a qualified domestic relations order. As used in this subsection, the terms
``alternate payee'' and ``qualified domestic relations order'' shall have the
meaning ascribed to them in section 414(p) of the United States federal
internal revenue code of 1954 1986, as amended in effect on July 1, 1998.
The provisions of this subsection shall apply to any qualified domestic
relations order which is in effect on or after July 1, 1994.

    (f) (1) Subject to the provisions of section 83 and amendments
thereto, each participating employer, pursuant to the provisions of section
414(h)(2) of the United States federal internal revenue code of 1986, as
in effect on July 1, 1998, shall pick up and pay the contributions which
would otherwise be payable by members as prescribed in subsection (a)
(b) commencing with the third quarter of 1984. The contributions so
picked up shall be treated as employer contributions for purposes of de-
termining the amounts of federal income taxes to withhold from the
member's compensation.

    (2) Member contributions picked up by the employer shall be paid
from the same source of funds used for the payment of compensation to
a member. A deduction shall be made from each member's compensation
equal to the amount of the member's contributions picked up by the
employer, provided that such deduction shall not reduce the member's
compensation for purposes of computing benefits under K.S.A. 12-5001
to 12-5007, inclusive, and amendments thereto.

    (3) Member contributions picked up by the employer shall be re-
mitted quarterly, or as the board may otherwise provide, to the executive
secretary for credit to the Kansas public employees retirement fund. Such
contributions shall be credited to a separate account within the member's
individual account so that amounts contributed by the member com-
mencing with the third quarter of 1984 may be distinguished from the
member contributions picked up by the employer. Interest shall be added
annually to members' individual accounts.

    Sec. 3. K.S.A. 12-5007 is hereby amended to read as follows: 12-
5007. The provisions of K.S.A. 12-5001 to through 12-5006, inclusive,
and amendments thereto shall be administered by the board of trustees
of the Kansas public employees retirement system. The provisions of sec-
tion 83 and amendments thereto shall apply to the administration of the
provisions of K.S.A. 12-5001 through 12-5006 and amendments thereto.

    Sec. 4. K.S.A. 13-14a02 is hereby amended to read as follows: 13-
14a02. The governing body of all cities of the first class, maintaining an
organized police department and a fire department, shall establish, main-
tain and fund a separate pension fund for each department, which shall
be set aside and used exclusively for the payment of pensions and disa-
bility benefits as authorized herein in K.S.A. 13-14a01 et seq. and amend-
ments thereto. Whenever the amount of any benefit is to be determined
on the basis of actuarial assumptions, the assumptions shall be specified
in a way that precludes employer discretion. Each such pension fund shall
be maintained and funded in accordance with the minimum funding stan-
dards prescribed in K.S.A. 12-5002 and amendments thereto. For the
purpose of creating, maintaining and funding such pension funds, the
governing body of each city of first class is hereby authorized and shall:

    (a) Accept gifts, grants, bequests, gratuities or any other money and
credit the same to the pension fund designated by the donor;

    (b) levy an assessment against each officer and member of each de-
partment equal to seven percent (7%) 7% of his or her such officer's or
member's monthly salary or compensation, same such assessment amount
to be deducted from the regular payroll and to be transferred into said
such pension fund;

    (c) place into said such funds the proceeds of all lost or stolen secu-
rities, money or personal property which shall remain remains unclaimed
in possession of any department of the city for six (6) months, together
with the proceeds of all unclaimed or confiscated property of any nature
which shall have has been in custody of the police department for a period
of six (6) months, and. The city is hereby authorized to sell at public
auction such property and place the proceeds into said such pension funds
in equal shares;

    (d) transfer into said such pension funds the unencumbered balance,
including investments, in any existing pension fund or funds, except that
if there is more than one pension fund existing in said such city, then
each of said such existing funds, except other than the firemen's and
policemen's relief funds, shall be transferred into the new pension fund
of a like classification. Upon the termination of any pension fund or funds,
the rights of members to benefits accrued at the date of termination to
the extent funded or to the amount in members' accounts at the date of
termination are nonforfeitable;

    (e) carry forward the balance in said such funds at the close of each
budget year as revenue for the next ensuing year; and

    (f) levy annually at the time for the levying of taxes for city purposes,
a tax upon all of the taxable tangible property in said such city for each
pension fund to make annual contributions to each pension fund as re-
quired under K.S.A. 12-5002 and amendments thereto and to maintain
and fund each pension fund on an actuarial reserve basis in accordance
with the provisions of K.S.A. 13-14a05 and amendments thereto. In lieu
of levying the tax authorized in this section, the annual contribution re-
quired of the city may be paid from any employee benefits contribution
fund established pursuant to K.S.A. 12-16,102. and amendments thereto;
and

    (g) administer such funds in the manner required to satisfy the ap-
plicable qualification requirements for governmental plans as specified in
the federal internal revenue code of 1954 or 1986, as in effect on July 1,
1998, and as applicable for a governmental plan in accordance with the
provisions of section 83 and amendments thereto.

    Sec. 5. K.S.A. 13-14a05 is hereby amended to read as follows: 13-
14a05. (a) The amount of money derived from taxes herein levied and all
money received from assessments, dues, and donations for the benefit of
such funds shall constitute pension trust funds to be known and desig-
nated, respectively, as the policemen's pension fund and the firemen's
pension fund, which. Such pension funds shall be devoted exclusively to
and for the purposes hereinafter enumerated in this section. All moneys
derived from the taxes so levied and money received from other sources
as above enumerated in this section shall be paid into the policemen's
pension fund or the firemen's pension fund, as the case may be, until the
amount in such pension fund equals the total of the actuarially-deter-
mined liabilities which are attributable to all members in active service
and to all persons who are receiving, or who are entitled to receive in the
future, pensions and other benefits from such fund. Further tax levies
shall be made only for the purpose of maintaining each pension fund at
said such level.

    (b) All moneys accumulated under the provisions of this act shall be
deposited by the treasurer in the same manner as other city funds, except
that the board of trustees may, at their option, may invest any of said
such reserve funds in:

    (1) Investments authorized by K.S.A. 12-1675, and amendments
thereto, in the manner prescribed therein or in;

    (2) direct obligation bonds of the United States of America maturing,
or redeemable, at par and accrued interest, within three (3) years from
date of purchase, or in; or

    (3) bonds of any municipality in the state of Kansas, the total bonded
indebtedness of which is less than fifteen percent (15%) 15% of the total
assessed tangible valuation of such municipality, which. Such bonds shall
mature within five (5) years from the date of purchase.

    Sec. 6. K.S.A. 13-14a06 is hereby amended to read as follows: 13-
14a06. Every new officer and member of said such police and fire de-
partments shall be required to pay to the treasurer of said such board a
membership fee of five dollars ($5), and $5. There shall be deducted
from the salary of every officer and member of each department seven
percent (7%) of his or her an amount equal to 7% of such officer's or
member's monthly salary, which shall be paid into the respective pension
funds. Any officer or member whose services, for any reason whatsoever,
shall be are terminated with the department shall be entitled, upon de-
mand, to be paid within thirty (30) 30 days after such demand, the total
amount of the deduction from his or her such officer's or member's salary
paid into said such fund, less fifty percent(50%) 50% thereof. In the event
such officer or member shall renew his or her such officer's or member's
services with said such department he or she shall such officer or member,
as a condition of employment and subject to the provisions of subsection
(g) of K.S.A. 13-14a02 and amendments thereto, shall return to said such
fund the amount withdrawn.

    Sec. 7. K.S.A. 1997 Supp. 13-14a07 is hereby amended to read as
follows: 13-14a07. (a) If any officer or member of a police or fire de-
partment, while in the performance of such officer's or member's duties,
is killed or dies as a result of an injury received, or dies of any disease
contracted by reason of such officer's or member's occupation as a po-
liceman or fireman, or dies after having retired and leaves a spouse, such
spouse, shall receive a monthly pension in an amount equal to 50% of the
monthly salary of such deceased officer or member, if such spouse was
lawfully married to such policeman or fireman at the time of such po-
liceman's or fireman's retirement. Commencing on the effective date of
this act, any surviving spouse, who was receiving benefits pursuant to this
section and who had such benefits terminated by reason of such spouse's
remarriage, shall be entitled to once again receive benefits pursuant to
this section, except that such surviving spouse shall not be entitled to
recover any benefits not received after the termination of benefits by
reason of such surviving spouse's remarriage but before the effective date
of this act. In the event there is no surviving spouse, then any child or
children of the deceased shall receive, in equal shares a monthly amount
equal to 50% of the monthly salary received at the time of retirement,
such sums to be paid until such child or children attain the age of 18
years or until such child or children attain the age of 23 years, if such
child or children are full-time students as provided in K.S.A. 74-49,117
and amendments thereto. Commencing on the effective date of this act,
any child who was receiving benefits pursuant to this section and who
had such benefits terminated by reason of such child's marriage, shall be
entitled to once again receive benefits pursuant to this section subject to
the limitations contained in this section, except that such child shall not
be entitled to recover any benefits not received after the termination of
benefits by reason of such child's marriage but before the effective date
of this act.

    (b) If any officer or member of such fire or police department, after
having become eligible for retirement as provided in K.S.A. 13-14a08 and
amendments thereto, is killed while not in the performance of such of-
ficer's or member's official duties, or dies, an amount equal to 50% of
such officer's or member's monthly salary shall be paid to such persons
for the periods of time provided in subsection (a) and shall be subject to
all the limitations provided in subsection (a).

    (c) Payments to the surviving spouse, child or children under the pro-
visions of subsection (a) or (b) shall begin no later than December 31 of
the calendar year immediately following the calendar year in which the
member died.

    Sec. 8. K.S.A. 1997 Supp. 13-14a10 is hereby amended to read as
follows: 13-14a10. Except as provided further, any annuity, benefits,
funds, property, or rights created by or accruing to any person under the
provisions of K.S.A. 13-14a01 et seq. or K.S.A. 14-10a01 et seq., and
amendments thereto, are hereby made and declared exempt from any tax
of the state of Kansas or any political subdivision or taxing body thereof,
and shall not be subject to execution, garnishment, or attachment, or any
other process or claim whatsoever, and shall be unassignable, except as
specifically provided by law.

    Any pension benefits or annuities accruing under the provisions of
K.S.A. 13-14a01 et seq. or K.S.A. 14-10a01 et seq., and amendments
thereto, shall not be exempt from claims of an alternate payee under a
qualified domestic relations order. As used in this section, the terms ``al-
ternate payee'' and ``qualified domestic relations order'' shall have the
meaning ascribed to them in section 414(p) of the United States federal
internal revenue code of 1954 1986, as amended in effect on July 1, 1998.
The provisions of this section shall apply to any qualified domestic rela-
tions order which is in effect on or after July 1, 1994.

    Sec. 9. K.S.A. 13-14a13 is hereby amended to read as follows: 13-
14a13. Any officer or member of such police department or fire depart-
ment, who shall leave said leaves such department and shall serve serves
in the military forces uniformed services of the United States in time of
emergency or war, may shall be credited by the respective board of trus-
tees, with time or any part thereof so served, in computing his or her
such officer's or member's retirement time for pension purposes, if he or
she joins said department within six months after being discharged from
the military forces if his or her discharge is not dishonorable as required
by federal law, including, but not limited to, when applicable, the uni-
formed services employment and reemployment rights act of 1994, as in
effect on July 1, 1998.

    Sec. 10. K.S.A. 14-10a02 is hereby amended to read as follows: 14-
10a02. The governing bodies of all cities of the second class, with a pop-
ulation in excess of six thousand (6,000) 6,000 located in counties having
a population of ten thousand (10,000) 10,000 or more, maintaining an
organized police and fire department, may establish and maintain a sep-
arate pension fund for each department, which shall be set aside and used
exclusively for the payment of pensions and disability benefits as author-
ized herein in K.S.A. 14-10a01 et seq. and amendments thereto. Whenever
the amount of any benefit is to be determined on the basis of actuarial
assumptions, the assumptions shall be specified in a way that precludes
employer discretion. Each such pension fund shall be maintained and
funded in accordance with the minimum funding standards prescribed in
K.S.A. 12-5002 and amendments thereto. For the purpose of creating,
maintaining and funding such pension funds, the governing body of each
such city of the second class is hereby authorized and shall:

    (a) Accept gifts, grants, bequests, gratuities or any other money and
credit the same to the pension fund designated by the donor;

    (b) levy an assessment against each officer and member of each de-
partment equal to seven percent (7%) 7% of his or her such officer's or
member's monthly salary or compensation, same such assessment amount
to be deducted from the regular payroll and to be transferred into said
such pension fund;

    (c) place into said such funds the proceeds of all lost or stolen secu-
rities, money or personal property which shall remain unclaimed in pos-
session of any department of the city for six months, together with the
proceeds of all unclaimed or confiscated property of any nature which
shall have been in custody of the police department for a period of six
months, and. The city is hereby authorized to sell at public auction such
property and place the proceeds into said such pension funds in equal
shares;

    (d) transfer into said such pension funds the unencumbered balance,
including investments, in any existing pension fund or funds, except that
if there is more than one pension fund existing in said such city then each
of said such existing funds, except other than the firemen's and police-
men's relief funds, shall be transferred into the new pension fund of a
like classification. Upon the termination of any pension fund or funds, the
rights of members to benefits accrued at the date of termination to the
extent funded or to the amount in members' accounts at the date of ter-
mination are nonforfeitable;

    (e) carry forward the balance in said such funds at the close of each
budget year as revenue for the next ensuing year;

    (f) transfer into said fund any proceeds from any municipally owned
utility at the discretion of the governing body; and

    (g) levy annually at the time for the levying of taxes for city purposes,
a tax upon all of the taxable tangible property in said such city for each
pension fund to make annual contributions to each pension fund as re-
quired under K.S.A. 12-5002 and amendments thereto and to maintain
and fund each pension fund on an actuarial reserve basis in accordance
with the provisions of K.S.A. 14-10a05 and amendments thereto and to
pay a portion of the principal and interest on bonds issued by such city
under the authority of K.S.A. 12-1774, and amendments thereto. In lieu
of levying the tax authorized in this section, the annual contribution re-
quired of the city may be paid from any employee benefits contribution
fund established pursuant to K.S.A. 12-16,102. and amendments thereto;
and

    (h) administer such funds in the manner required to satisfy the ap-
plicable qualification requirements for governmental plans as specified in
the federal internal revenue code of 1954 or 1986, as in effect on July 1,
1998, and as applicable for a governmental plan in accordance with the
provisions of section 83 and amendments thereto.

    Sec. 11. K.S.A. 14-10a05 is hereby amended to read as follows: 14-
10a05. (a) The amount of money derived from taxes herein levied, except
for an amount to pay a portion of the principal and interest on bonds
issued by such city under the authority of K.S.A. 12-1774, and amend-
ments thereto, and all money received from assessments, dues, and do-
nations for the benefit of such funds shall constitute pension trust funds
to be known and designated, respectively, as the policemen's pension
fund and the firemen's pension fund, which. Such pension funds shall be
devoted exclusively to and for the purposes hereinafter enumerated in
this section. All moneys derived from the taxes so levied and money re-
ceived from other sources as above enumerated in this section shall be
paid into the policemen's pension fund or the firemen's pension fund, as
the case may be, until the amount in such pension fund equals the total
of the actuarially determined liabilities which are attributable to all mem-
bers in active service and to all persons who are receiving, or who are
entitled to receive in the future, pensions and other benefits from such
fund. Further tax levies shall be made only for the purpose of maintaining
each pension fund at said such level.

    (b) All moneys accumulated under the provisions of this act shall be
deposited by the treasurer in the same manner as other city funds, except
that the board of trustees may, at their option, may invest any of said
such reserve funds in: (1) Investments authorized by K.S.A. 12-1675,
and amendments thereto, in the manner prescribed therein or in;

    (2) direct obligation bonds of the United States of America maturing,
or redeemable at par and accrued interest, within three years from date
of purchase, or in; or

    (3) bonds of any municipality in the state of Kansas, the total bonded
indebtedness of which is less than fifteen percent (15%) 15% of the total
assessed tangible valuation of such municipality, which. Such bonds shall
mature within five years from the date of purchase.

    Sec. 12. K.S.A. 14-10a06 is hereby amended to read as follows: 14-
10a06. Every new officer and member of said such police and fire de-
partments shall be required to pay to the treasurer of said such board a
membership fee of five dollars ($5), and $5. There shall be deducted
from the salary of every officer and member of each department seven
percent (7%) of his or her an amount equal to 7% of such officer's or
member's monthly salary, which shall be paid into the respective pension
funds. Any officer or member, whose services, for any reason whatsoever,
shall be are terminated with the department shall be entitled, upon de-
mand, to be paid within thirty (30) 30 days after such demand, the total
amount of the deduction from his or her such officer's or member's salary
paid into said such fund, less fifty percent (50%) 50% thereof. In the
event such officer or member should renew his or her such officer's or
member's services with said such department the officer or member shall,
as a condition of employment and subject to the provisions of subsection
(h) of K.S.A. 14-10a02 and amendments thereto, return to said such fund
the amount withdrawn.

    Sec. 13. K.S.A. 1997 Supp. 14-10a07 is hereby amended to read as
follows: 14-10a07. (a) If any officer or member of a police or fire de-
partment, while in the performance of such officer's or member's duties,
is killed or dies as a result of an injury received, or dies of any disease
contracted by reason of such officer's or member's occupation as a po-
liceman or fireman, or dies after having retired and leaves a spouse, such
spouse, shall receive a monthly pension in an amount equal to 50% of the
monthly salary of such deceased officer or member, if such spouse was
lawfully married to such policeman or fireman at the time of such po-
liceman's or fireman's retirement. Commencing on the effective date of
this act, any surviving spouse, who was receiving benefits pursuant to this
section and who had such benefits terminated by reason of such spouse's
remarriage, shall be entitled to once again receive benefits pursuant to
this section, except that such surviving spouse shall not be entitled to
recover any benefits not received after the termination of benefits by
reason of such surviving spouse's remarriage but before the effective date
of this act. In the event there is no surviving spouse, then any child or
children of the deceased, shall receive, in equal shares a monthly amount
equal to 50% of the monthly salary received at the time of death, such
sums to be paid until such child or children attain the age of 18 years or
until such child or children attain the age of 23 years, if such child or
children are full-time students as provided in K.S.A. 74-49,117 and
amendments thereto. Commencing on the effective date of this act, any
child who was receiving benefits pursuant to this section and who had
such benefits terminated by reason of such child's marriage, shall be en-
titled to once again receive benefits pursuant to this section subject to
the limitations contained in this section, except that such child shall not
be entitled to recover any benefits not received after the termination of
benefits by reason of such child's marriage but before the effective date
of this act.

    (b) If any officer or member of such fire or police department, after
having become eligible for retirement as provided in K.S.A. 14-10a08 and
amendments thereto, is killed while not in the performance of such of-
ficer's or member's official duties, or dies, an amount equal to 50% of
such officer's or member's monthly salary shall be paid to such persons
for the periods of time provided in subsection (a) and shall be subject to
all the limitations provided in subsection (a).

    (c) Payments to the surviving spouse, child or children under the pro-
visions of subsection (a) or (b) must begin no later than December 31 of
the calendar year immediately following the calendar year in which the
member died.

    Sec. 14. K.S.A. 14-10a13 is hereby amended to read as follows: 14-
10a13. Any officer or member of such police department or fire depart-
ment, who shall leave said leaves such department and shall serve serves
in the military forces uniformed services of the United States in time of
emergency or war, may shall be credited by the respective board of trus-
tees, with time or any part thereof so served, in computing his or her
such officer's or member's retirement time for pension purposes, if the
officer or member joins said department within six months after being
discharged from the military forces if his or her discharge is not dishon-
orable as required by federal law, including, not limited to, when appli-
cable, the uniformed services employment and reemployment rights act
of 1994, as in effect on July 1, 1998.

    Sec. 15. K.S.A. 1997 Supp. 20-2601 is hereby amended to read as
follows: 20-2601. As used in K.S.A. 20-2601 et seq. and amendments
thereto, unless the context otherwise requires:

    (a) ``Fund'' means the Kansas public employees retirement fund cre-
ated by K.S.A. 74-4921 and amendments thereto;

    (b) ``retirement system for judges'' means the system provided for in
the acts contained in article 26 of chapter 20 of the Kansas Statutes An-
notated and any acts amendatory thereof or supplemental thereto;

    (c) ``judge'' means any duly elected or appointed justice of the su-
preme court, judge of the court of appeals or judge of any district court
of Kansas, who serves in such capacity on and after the effective date of
this act and commencing with the first day of the first payroll period of
the fiscal year ending June 30, 1994, any district magistrate judge who
makes an election as provided in K.S.A. 20-2620 and amendments thereto
or who is elected or appointed on or after July 1, 1993;

    (d) ``member'' means a judge who is making the required contribu-
tions to the fund, or any former judge who has made the required con-
tributions to the fund and has not received a refund of the judge's ac-
cumulated contributions;

    (e) ``prior service'' means all the periods of time any judge has served
in such capacity prior to the effective date of this act except that district
magistrate judges who have service credit under the Kansas public em-
ployees retirement system must make application to the board and, sub-
ject to the provisions of section 83 and amendments thereto, make pay-
ment as required by the board to transfer service credit from the Kansas
public employees retirement system to the retirement system for judges;

    (f) ``current service'' means the period of service any judge serves in
such capacity from and after the effective date of this act;

    (g) ``military service'' means active service of any judge in any of the
armed forces of the United States or in the United States public health
service prior or subsequent to the effective date of this act, provided such
service commenced while such judge was holding the office of judge. The
board has the power to determine when a national emergency exists or
has existed for the purpose of applying this definition and provision for
which retirement benefit credit must be given as provided in the uni-
formed services employment and reemployment rights act of 1994, as in
effect on July 1, 1998;

    (h) ``total years of service'' means the total number of years served as
a judge, including prior service, military service and current service as
defined by this section, computed to the nearest quarter;

    (i) ``salary'' means the statutory salary of a judge;

    (j) ``final average salary'' means that determined as provided in sub-
section (b) of K.S.A. 20-2610 and amendments thereto;

    (k) ``beneficiary'' means any natural person or persons or estate des-
ignated by a judge in the latest designation of beneficiary received in the
retirement system office to receive any benefits as provided for by this
act. Except as provided in subsection (n), if there is no named beneficiary
living at the time of the judge's death, any benefits provided for by this
act shall be paid to: (1) The judge's surviving spouse; (2) the judge's
dependent child or children; (3) the judge's dependent parent or parents;
(4) the judge's nondependent child or children; (5) the judge's nonde-
pendent parent or parents; or (6) the estate of the deceased member; in
the order of preference as specified in this subsection. Any payment made
to a named beneficiary shall be a full discharge and release to the system
from any further claims. Any payment made to a beneficiary as provided
in clauses (1), (2), (3), (4), (5) or (6) of this subsection, as determined by
the board, shall be a full discharge and release to the system from any
further claims. Whenever any payment is payable to more than one ben-
eficiary such payment shall be made to such beneficiaries jointly. Any
benefits payable to a beneficiary or beneficiaries who are minor children
or incompetent persons shall be made in the name of the beneficiary or
beneficiaries and delivered to the lawfully appointed conservator of such
beneficiaries who was nominated by will or as otherwise provided by law,
except that in those cases where the benefit involves only the payment of
the judge's accumulated contributions with interest as provided by this
act in an amount not to exceed $500, the board is hereby authorized in
its discretion without the appointment of a conservator or the giving of a
bond to pay such amount as is due to the minor or minors themselves,
any payment so made shall be a full discharge and release to the system
from any further claims. Designations of beneficiaries by a member who
is a member of more than one retirement system made on or after July
1, 1987, shall be the basis of any benefits payable under all systems unless
otherwise provided by law;

    (l) ``annuity'' means a series of equal monthly payments, payable at
the end of each calendar month during the life of a retired judge, of
which payments the first payment shall be made as of the end of the
calendar month in which such annuity was awarded and the last payment
shall be at the end of the calendar month in which such judge dies. The
first payment shall include all amounts accrued since the effective date
of the award of annuities, including a pro rata portion of the monthly
amount of any fraction of a month elapsing between the effective date of
such annuity and the end of the calendar month in which such annuity
began;

    (m) ``board'' means the board of trustees of the Kansas public em-
ployees retirement system;

    (n) ``trust'' means an express trust created by any trust instrument,
including a will, and designated by a member to receive benefits and other
amounts payable under K.S.A. 20-2607, 20-2610a and 20-2612, and
amendments thereto, instead of a beneficiary. A designation of a trust
shall be filed with the board. If there is a designated trust at the time of
the member's death, all benefits and other amounts payable under K.S.A.
20-2607, 20-2610a and 20-2612, and amendments thereto, shall be paid
to the trust instead of the member's beneficiary. If no will is admitted to
probate within six months after the death of the member or no trustee
qualifies within such six months or if the designated trust fails, for any
reason whatsoever, any benefits and other amounts payable under K.S.A.
20-2607, 20-2610a and 20-2612, and amendments thereto, shall be paid
to the member's beneficiary and any payments so made shall be a full
discharge and release to the retirement system for judges from any fur-
ther claims;

    (o) ``accumulated contributions'' means the sum of all contributions
by a member to the retirement system for judges which are credited to
the member's account, with interest allowed thereon after June 30, 1982;
and

    (p) ``federal internal revenue code'' means the federal internal revenue
code of 1954 or 1986, as in effect on July 1, 1998, and as applicable to a
governmental plan; and

    (q) except as otherwise provided in K.S.A. 20-2601 et seq. and
amendments thereto, words and phrases used in K.S.A. 20-2601 et seq.
and amendments thereto shall have the same meanings ascribed to them
as are defined in K.S.A. 74-4902 and amendments thereto.

    Sec. 16. K.S.A. 20-2603 is hereby amended to read as follows: 20-
2603. (a) Except as otherwise provided in this section, each judge shall
contribute 6% of the judge's salary for each payroll period to the fund.
Commencing with the first payroll period after 20 years of service by the
judge and after the judge reaches 65 years of age, and for each payroll
period thereafter, such judge shall contribute 2% of such judge's salary
to the fund. Commencing with the first payroll period after the judge has
enough years of service to entitle such judge upon retirement to the
maximum monthly retirement benefit of 70% of the final average salary
of such judge provided under the provisions of K.S.A. 20-2610 and
amendments thereto, and for each payroll period thereafter, each judge
shall contribute 4% of such judge's salary to the fund or, commencing on
and after the effective date of this act, each such judge shall contribute
2% of such judge's salary to the fund.

    (b) The director of accounts and reports shall deduct the amount
each judge is to contribute to the fund on the payroll of each judge for
each payroll period showing the amount deducted and its credit to the
fund. Such deductions shall be remitted quarterly, or as the board may
otherwise provide, to the executive secretary of the Kansas public em-
ployees retirement system for credit to the fund to the credit of the
judge's individual account therein.

    (c) Interest on each judge's accumulated contributions at the rate
determined under subsection (a) of K.S.A. 74-4922 and amendments
thereto shall be added annually to the judge's individual account in the
fund.

    (d) No member who has retired under the retirement system for
judges shall make contributions to that system or receive any service
credit under that system for any service after the date of such retirement.

    (e) (1) Subject to the provisions of section 83 and amendments
thereto, each participating employer, pursuant to the provisions of section
414(h)(2) of the United States federal internal revenue code, shall pick
up and pay the contributions which would otherwise be payable by mem-
bers as prescribed in subsection (a). The contributions so picked up shall
be treated as employer contributions for purposes of determining the
amounts of federal income taxes to withhold from the member's com-
pensation.

    (2) Member contributions picked up by the employer shall be paid
from the same source of funds used for the payment of compensation to
a member. A deduction shall be made from each member's compensation
equal to the amount of the member's contributions picked up by the
employer, provided that such deduction shall not reduce the member's
compensation for purposes of computing benefits under the retirement
system for judges.

    (3) Member contributions picked up by the employer shall be re-
mitted quarterly, or as the board may otherwise provide, to the executive
secretary for credit to the Kansas public employees retirement fund. Such
contributions shall be credited to a separate account within the member's
individual account so that amounts contributed by the member may be
distinguished from the member contributions picked up by the employer.
Interest shall be added annually to members' individual accounts.

    Sec. 17. K.S.A. 20-2606 is hereby amended to read as follows: 20-
2606. (a) Any judge whose service is terminated prior to retirement, for
any cause other than death, may, upon written request to the board, have
returned the total amount of accumulated contributions which the judge
has made to the fund after the retirement system for judges has a rea-
sonable time to process the application for withdrawal. The return of
accumulated contributions to a judge shall preclude that judge from any
benefits under the retirement system for judges unless and until that
judge again serves in such capacity.

    (b) Any incumbent judge over 70 years of age with a total service of
at least eight years at the time the judge's present term of office expires,
or at the time of retirement if the judge retires before the end of the
judge's present term, shall receive retirement annuities as provided in
K.S.A. 20-2608, 20-2609 and 20-2610, and any amendments thereto, un-
less the judge requests the return of accumulated contributions under
this section.

    (c) In case any judge, who has had such judge's accumulated contri-
butions returned under this section, serves again in such capacity, such
judge may return, subject to the provisions of section 83 and amendments
thereto, the amount refunded under this section without interest or pen-
alty and regain such judge's original status under the retirement system
for judges.

    (d) Subject to the provisions of section 83 and amendments thereto,
any member of the retirement system for judges who was previously a
member of the Kansas public employees retirement system or the Kansas
police and firemen's retirement system and who forfeited service credit
under either of those systems by reason of termination of employment
and withdrawal of their contributions to that system, may elect to pur-
chase service credit for the previously forfeited service credit by means
of a single lump-sum payment and such service shall be recredited to that
system. The amount of the lump-sum payment shall be determined by
the actuary using the member's then current annual rate of compensation
and the actuarial assumptions and tables then currently in use by that
retirement system.

    Sec. 18. K.S.A. 20-2610a is hereby amended to read as follows: 20-
2610a. (a) A judge may elect to have such judge's retirement annuity paid
under one of the options provided in this section in lieu of having it paid
in the form stated in K.S.A. 20-2610 and amendments thereto. Such elec-
tion shall be made before the date of actual retirement. A specific person
shall be designated as joint annuitant at the time of election of the joint
and 1/2 to joint annuitant survivor option, joint and survivor option and
the joint and 3/4 to joint annuitant survivor option. Under no circum-
stances may an option be changed or canceled nor the named joint an-
nuitant changed after the date of actual retirement of the judge.

    (b) The amount of retirement annuity payable under an option shall
be based on the age of the judge and, if applicable, the age of the joint
annuitant, and shall be such amount as to be the actuarial equivalent of
the retirement annuity otherwise payable under K.S.A. 20-2610 and
amendments thereto as prescribed in subsection (c). Whenever the
amount of any benefit is to be determined on the basis of actuarial as-
sumptions, the assumptions shall be specified in a way that precludes
employer discretion. In no case shall the total amount of retirement an-
nuity payable under any option provided in this section be more than
100% of the retirement annuity which would have been otherwise payable
if no option had been elected under this section.

    (c) The following retirement options, which are subject to the pro-
visions of section 83 and amendments thereto, are available:

    (1) Joint and 1/2 to joint annuitant survivor. A reduced retirement
annuity payable to the judge during the judge's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment annuity otherwise payable under K.S.A. 20-2610 and amendments
thereto and (B) the percentage equal to 91% minus .4% for each year by
which the age of the judge's joint annuitant is less than the judge's age,
computed to the nearest whole year, or plus .4% for each year by which
the age of the judge's joint annuitant is more than the judge's age, com-
puted to the nearest whole year, with 1/2 of that monthly amount contin-
ued to the judge's joint annuitant during such joint annuitant's remaining
lifetime, if any, after the death of the judge. In the event that the desig-
nated joint annuitant under this option predeceases the retired judge, the
amount of the retirement annuity otherwise payable to the judge under
this option shall be adjusted automatically to the retirement annuity which
the judge would have received if no option had been elected under this
section.

    (2) Joint and survivor. A reduced retirement annuity payable to the
judge during the judge's lifetime in a monthly amount equal to the prod-
uct of (A) the monthly payment of the retirement annuity otherwise pay-
able under K.S.A. 20-2610 and amendments thereto and (B) the per-
centage equal to 83% minus .6% for each year by which the age of the
judge's joint annuitant is less than the judge's age, computed to the near-
est whole year, or plus .6% for each year by which the age of the judge's
joint annuitant is more than the judge's age, computed to the nearest
whole year, with that monthly amount continued to the joint annuitant
during the joint annuitant's remaining lifetime, if any, after the death of
judge. In the event that the designated joint annuitant under this option
predeceases the retired judge, the amount of the retirement annuity oth-
erwise payable to the judge under this option shall be adjusted automat-
ically to the retirement annuity which the judge would have received if
no option had been elected under this section.

    (3) Joint and 3/4 to joint annuitant survivor. A reduced retirement
annuity payable to the judge during the judge's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment annuity otherwise payable under K.S.A. 20-2610 and amendments
thereto and (B) the percentage equal to 87% minus .5% for each year by
which the age of the judge's joint annuitant is less than the judge's age,
computed to the nearest whole year, or plus .5% for each year by which
the age of the judge's joint annuitant is more than the judge's age, com-
puted to the nearest whole year, with 3/4 of that monthly amount contin-
ued to the judge's joint annuitant during such joint annuitant's remaining
lifetime, if any, after the death of the judge. In the event that the desig-
nated joint annuitant under this option predeceases the retired judge, the
amount of the retirement annuity otherwise payable to the judge under
this option shall be adjusted automatically to the retirement annuity which
the judge would have received if no option had been elected under this
section.

    (4) Life with 5 years certain. A reduced retirement annuity payable
to the judge during the judge's lifetime in a monthly amount equal to
98% of the monthly payment of the retirement annuity otherwise payable
under K.S.A. 20-2610 and amendments thereto and if the judge dies
within the five-year certain period, measured from the commencement
of retirement annuity payments, such monthly payments shall be contin-
ued to such judge's beneficiary during the balance of the five-year certain
period.

    (5) Life with 10 years certain. A reduced retirement annuity payable
to the judge during the judge's lifetime in a monthly amount equal to
95% of the monthly payment of the retirement annuity otherwise payable
under K.S.A. 20-2610 and amendments thereto and if the judge dies
within the ten-year certain period, measured from the commencement
of retirement annuity payments, such monthly payments shall be contin-
ued to such judge's beneficiary during the balance of the ten-year certain
period.

    (6) Life with 15 years certain. A reduced retirement annuity payable
to the judge during the judge's lifetime in a monthly amount equal to
88% of the monthly payment of the retirement annuity otherwise payable
under K.S.A. 20-2610 and amendments thereto and if the judge dies
within the fifteen-year certain period, measured from the commence-
ment of retirement annuity payments, such monthly payments shall be
continued to such judge's beneficiary during the balance of the fifteen-
year certain period.

    (d) If a judge, who is eligible to retire, dies without having actually
retired, the judge's spouse, if the spouse is the sole beneficiary for the
judge's accumulated contributions, may elect to receive benefits as a joint
annuitant under one of the options provided in this section in lieu of
receiving the judge's accumulated contributions.

    (e) On and after July 1, 1993, if a judge with 15 or more years of
credited service dies before attaining retirement age, the judge's spouse,
if the spouse is the sole beneficiary for the judge's accumulated contri-
butions, may elect to receive benefits under one of the options provided
in this section in lieu of receiving the judge's accumulated contributions.
Payments under one of the options provided in this section to the judge's
spouse if so elected, shall commence on the date that the judge would
have first attained retirement age.

    (f) Benefits payable to a joint annuitant shall accrue from the first
day of the month following the death of a member or retirant and, in the
case of the joint and 1/2 to joint annuitant survivor option, the joint and
survivor option and the joint and 3/4 to joint annuitant survivor option,
shall end on the last day of the month in which the joint annuitant dies.

    (g) The provisions of the law in effect on the retirement date of a
judge under the retirement system for judges shall govern the retirement
annuity payable to the retired judge and any joint annuitant, except, for
retirement benefits payable after July 1, 1993, for judges who retired prior
to July 1, 1982, in the event that the designated joint annuitant under the
option provided in subsection (c)(1), (2) or (3), as applicable, predeceased
the judge, the amount of the retirement benefit otherwise payable to the
judge under the option provided in subsection (c)(1), (2) or (3), as appli-
cable, shall be adjusted automatically to the retirement benefit which the
judge would have received if no option had been elected under this sec-
tion.

    (h) Upon the death of a joint annuitant who is receiving a retirement
benefit under the provisions of this section, there shall be paid to such
joint annuitant's beneficiary an amount equal to the excess, if any, of the
accumulated contributions of the retired judge over the sum of all retire-
ment benefit payments made to such retired judge and such joint annu-
itant. Such joint annuitant shall designate a beneficiary by filing in the
office of the retirement system such designation at the time of death of
the retired judge. If there is no named beneficiary of such joint annuitant
living at the time of death of such joint annuitant, any amount provided
for by this section shall be paid to, in order of preference as follows:

    (1) The joint annuitant's surviving spouse;

    (2) the joint annuitant's dependent child or children;

    (3) the joint annuitant's dependent parent or parents;

    (4) the joint annuitant's nondependent child or children;

    (5) the joint annuitant's nondependent parent or parents; or

    (6) the estate of the deceased joint annuitant.

    (i) In any event, benefits shall be adjusted as necessary to satisfy the
incidental death benefits regulations under the federal internal revenue
code.

    Sec. 19. K.S.A. 20-2618 is hereby amended to read as follows: 20-
2618. Every annuity or other benefit received by any judge or other per-
son pursuant to the retirement system for judges under the acts contained
in article 26 of chapter 20 of the Kansas Statutes Annotated and amend-
ments thereto is exempt from any tax of the state of Kansas or any political
subdivision or taxing body thereof; shall not be subject to execution, gar-
nishment, attachment or except as otherwise provided, any other process
or claim whatsoever; and shall be unassignable, except that within 30 days
after the death of a retirant the lump-sum death benefit payable to a
retirant pursuant to the provisions of K.S.A. 74-4989 and amendments
thereto may be assignable to a funeral establishment providing funeral
services to such retirant by the beneficiary of such retirant. Any annuity
or benefit or accumulated contributions due and owing to any judge or
any person under the provisions of the retirement system for judges are
subject to claims of an alternate payee under a qualified domestic rela-
tions order. As used in this subsection, the terms ``alternate payee'' and
``qualified domestic relations order'' shall have the meaning ascribed to
them in section 414(p) of the United States federal internal revenue code
of 1954 as amended. The provisions of this act shall apply to any qualified
domestic relations order which was filed or amended either before or
after July 1, 1994. The Kansas public employees retirement system shall
not be a party to any action under article 16 of chapter 60 of the Kansas
Statutes Annotated, and amendments thereto, but is subject to orders
from such actions issued by the district court of the county where such
action was filed and may also accept orders which it deems to be qualified
under this subsection from courts having jurisdiction of such actions out-
side the state of Kansas. Such orders from such actions shall specify either
a specific amount or specific percentage of the amount of the pension or
benefit or any accumulated contributions due and owing from the system
to be distributed by the system pursuant to this act.

    Sec. 20. K.S.A. 20-2620 is hereby amended to read as follows: 20-
2620. (a) Each district magistrate judge holding such position on the ef-
fective date of this act may become a member of the retirement system
for judges on the first day of the payroll period of the fiscal year ending
June 30, 1994, only by filing with the board of trustees of the Kansas
public employees retirement system on or before the first day of the
payroll period of the fiscal year ending June 30, 1994, a written election
to become a member of the system. Failure to file such written election
shall be presumed to be an election not to become a member of the
system. Such election, whether to become a member or not to become a
member, shall be irrevocable. In addition, any such district magistrate
judge who makes the election previously provided in this section, may
elect to transfer such district magistrate judge's service credit from the
Kansas public employees retirement system as provided in subsection (e)
of K.S.A. 20-2601 and amendments thereto and subsection (c).

    (b) Each person who becomes a district magistrate judge on or after
the effective date of this act shall become a member of the retirement
system for judges on the first day such person holds the position of district
magistrate judge.

    (c) The board of trustees of the Kansas public employees retirement
system shall transfer to the credit of the district magistrate judge under
the retirement system for judges such amounts as may be presently cred-
ited to a district magistrate judge's account for contribution under the
Kansas public employees retirement system and an equivalent amount to
the employer's account for contributions for such district magistrate judge
whenever an application for conversion of service under the Kansas public
employees retirement system is received from a district magistrate judge.
Subject to the provisions of section 83 and amendments thereto, any dis-
trict magistrate judge may purchase such service by electing such pur-
chase prior to retirement by means of a single lump-sum payment or
equal annual payments for not to exceed five years. The lump-sum or
annual payments shall be determined by the system's actuary by using
the member's final average salary at the time of application, actuarial
assumptions and tables currently in use by the system and the member's
attained age. No participating employer shall pay all or any part of the
cost of service credit purchased by a member under this section.

    Sec. 21. K.S.A. 20-2621 is hereby amended to read as follows: 20-
2621. (1) Any judge, who first became a member of the retirement system
for judges after attaining age 60 years, may elect to purchase additional
benefits for service credit under the retirement system for judges. In no
case shall a judge be entitled to purchase additional benefits as provided
in this section if the judge's number of years of credited service and
number of years of service credit purchased as provided in this section
exceeds 15 years. The benefit for each such year of service credit pur-
chased as provided in this section shall be as provided in K.S.A. 20-2610
and amendments thereto. Such benefit shall be based on the annual com-
pensation of such judge at the time the judge purchases such additional
benefits. Subject to the provisions of section 83 and amendments thereto,
such member may purchase such additional benefits by making applica-
tion therefor prior to date of retirement and making a single lump-sum
payment representing the amount that a judge would normally contribute
under the system had the years of service credit purchased by the judge
as provided in this section actually been years of credited service. Such
lump-sum payment shall be based on an amount equal to the then present
value of the benefits being purchased as determined by the actuary using
the judge's attained age, annual compensation at the time of purchase
and the actuarial assumptions and tables then in use by this system. The
lump-sum payment shall be made immediately upon being notified of the
amount due on the date specified by the board.

    (2) The provisions of this section shall take effect on and after July
1, 1994.

    Sec. 22. K.S.A. 72-5501 is hereby amended to read as follows: 72-
5501. As used in this act, unless the context otherwise requires:

    (a) ``Retirement system'' means the state school retirement system;

    (b) ``board'' means the board of trustees of the Kansas public em-
ployees retirement system;

    (c) ``school year'' means either the twelve-month period beginning on
September first, or the legal school term during such period. In case of
doubt the board shall decide what constitutes a school year; but it. The
board shall not give credit for a school year that represents less than 140
days, except that the board may give credit for a school year if not less
than 80 days of actual service has been rendered and if continuance in
school service was prevented by illness or other emergency beyond the
control of the person entitled to such credit. No person shall receive
credit for more than one school year during any twelve-month period
beginning on September 1. The board shall give credit for 1/2 of a school
year for 1/2 school year of continuous full-time service;

    (d) ``school employees'' means persons who have performed or who
shall hereafter perform school services as classroom teachers, adminis-
trators, supervisors, librarians, nurses, clerks, janitors, or in any other full-
time capacity in the public schools, area vocational-technical schools or
community junior colleges of the state of Kansas and who are citizens of
the United States and it school employees shall include: (1) Persons who
have performed service as a county superintendent of public instruction
or as an employee appointed by and under the supervision of a county
superintendent,; (2) persons who have performed service as a state su-
perintendent of public instruction or as an employee appointed by and
under supervision of a state superintendent,; (3) persons who have per-
formed services as an employee appointed by the former state board for
vocational education, except that prior to the time of accepting such em-
ployment by such county superintendent, state superintendent or state
board for vocational education such employees had performed school
service in Kansas as a teacher, principal, supervisor, or superintendent,;
(4) persons who are employees appointed by and under the supervision
of the constitutional state board of education, including those employees
transferred to the state department of education at its inception in January
of 1969, and who prior to the time of accepting such employment by the
state board of education had performed school service in Kansas as a
teacher, principal, supervisor, or superintendent,; (5) the commissioner
of education if such commissioner exercises an irrevocable option to be
covered by the state school retirement system in lieu of being covered by
the Kansas public employees retirement system, which option shall be
exercised by written notice of the commissioner of education at the time
of appointment,. Such notice to shall be directed to the state school re-
tirement board and the board of trustees of the Kansas public employees
retirement system,; (6) all instructional employees for the school for the
blind and such employees shall be excluded from participation in any
other state retirement system,; and (7) teachers and supervisors of in-
struction at the state institutions under the management of the director
of penal institutions and those under the management of the state board
of social welfare which provide regular classroom instruction for their
inmates or patients if such instructional personnel have valid certificates
issued by the state board of education, but excepting except that the pro-
visions of this subsection shall not include such employees who have
elected or shall elect, irrevocably, at the time of employment by the
institution to participate in the Kansas public employees retirement sys-
tem. The term ``school employees'' shall not include any employee while
a member of a separate retirement system operated by any board of
education but if any such employee at any time becomes eligible to par-
ticipate in the state retirement as provided by this act, the years such
person served in a school system in Kansas which maintains a separate
retirement system shall be included in determining years of service of
such person under this act. An employee performing service in a school
system maintaining its own separate retirement system in Kansas may
qualify for service credit in the state system by discontinuing membership
in such separate retirement system prior to the time of retirement and
accepting a position which is covered by the state retirement system, and
continuing in such service for at least one school year. Subject to the
provisions of section 83 and amendments thereto, such employee shall
contribute to the state retirement system an amount of money equal to
that which was deducted from such employee's salary for services ren-
dered after September 1, 1941, in the city maintaining its own retirement
system and this amount shall be credited to the savings account of the
employee. If such employee was for any reason excluded from partici-
pation in the separate retirement system, the board shall give credit for
such nonmember service in the public schools in the city maintaining a
separate retirement system without the required transfer of funds. After
September 1, 1971, no person shall be deemed a school employee for
the purposes of this act;

    (e) ``school service'' means: (1) Service performed as a school em-
ployee prior to September 1, 1941, if such years of service include at least
six months during the years 1938-39 or 1939-40 or 1940-41; service per-
formed by any employee who was not in school service in any of the school
years from 1938 to 1941, but who reentered school service after Septem-
ber 1, 1941, and continued in such service for at least five years; all service
prior to September 1, 1941, of any annuitant who retired prior to Sep-
tember 1, 1961, and who was granted a service annuity for one or more
years as a contributing member of the school retirement system; all serv-
ice prior to September 1, 1941, of any employee who served for at least
six months during one of the qualifying years from 1938 to 1941 in a
school system maintaining its own separate retirement system in Kansas,
if such employee has not qualified, nor will in the future qualify, for
retirement benefits under the separate retirement system; all service as
a school employee, including out-of-state service as a school employee,
for a period of 12 or more years prior to September 1, 1938, except that
service annuities paid by the state of Kansas to such school employees
shall not include such out-of-state service as a school employee, unless
otherwise provided by law; and (2) service as a school employee after
September 1, 1941, and prior to age 70 as a contributing member of the
school retirement system. No service credit shall be granted to a school
employee who established or shall hereafter establish membership later
than September 1, 1941, for a period of time between September 1, 1941,
and the date of becoming a contributing member of the retirement sys-
tem. School service shall include only full-time employees, except that 1/2
year of credit shall be given to instructional employees who perform
school service on at least a 1/2 time basis throughout a school year. No
school service credit shall be given in fractional units of less than 1/2 year.
The board may grant service credit to employees, who were performing
school service at the time of their induction into the armed forces of the
United States, equal to the time spent in the armed forces between Sep-
tember 1, 1940, and September 1, 1947, and between June 25, 1950, and
July 27, 1953 and between August 5, 1964, and August 15, 1973, but no
such service credit shall be granted for a period of more than five years
spent in the armed forces between September 1, 1940, and September
1, 1947, or for a period of more than two years spent in the armed forces
between June 25, 1950, and July 27, 1953 or for a period of more than
two years spent in the armed forces between August 5, 1964 and August
15, 1973. In the event the employee served during the periods between
September 1, 1940, and September 1, 1947, and between June 25, 1950,
and July 27, 1953, such employee shall be granted a service credit for the
actual time spent in the armed forces between June 25, 1950, and July
27, 1953, nor shall such service credit be granted to any employee unless
such employee shall reenter school service and continue in such service
for at least one school year. The board may grant service credit to an
employee who was performing school service prior to the time of becom-
ing employed as a veterans' instructional on-the-farm training instructor
equal to the time spent as such instructor between the dates of September
1, 1946, and September 1, 1961. The board may grant service credit to
an employee who prior to performing school service was a faculty member
of the Kansas vocational school at Topeka, known part of the time as the
Kansas technical institute, which operated under the Kansas state board
of regents prior to 1956 equal to the time spent as instructor at such
school. In case of doubt the board shall decide what constitutes school
service; and (3) service for which credit must be given under federal law,
including, but not limited to, when applicable, the uniformed services
employment and reemployment rights act of 1994, as in effect on July 1,
1998;

    (f) ``school annuitant'' means any person who is entitled to receive a
school annuity;

    (g) ``school annuity'' means the monthly payments due to any school
annuitant. Such payments shall continue for life, and be paid in monthly
installments;

    (h) ``service annuity'' means that part of the school annuity which is
based upon the service record of the person concerned, and which is paid
by the state;

    (i) ``savings annuity'' means that part of the school annuity which re-
sults from the accumulated contributions of the school employee and
interest thereon less the proportionate share of the expense of the ad-
ministration of this act;

    (j) ``disability annuity'' means a school annuity granted to a school
employee who suffers such physical or mental disability as to be unable
to perform school service;

    (k) ``standard annuity'' means the school annuity which is granted to
a school employee at the age of 65 years, as prescribed by this act;. The
standard annuity shall be used as the basis in computing actuarially equiv-
alent annuities granted at ages prior to 65 years. Whenever the amount
of any benefit is to be determined on the basis of actuarial assumptions,
the assumption shall be specified in a way that precludes employer dis-
cretion;

    (l) ``service record'' means the individual record kept by the board
for each school employee. It shall show the number of school years of
school service, the salary or wages earned, the date of birth, and such
other data as the board may require;

    (m) ``age'' and ``attained age'' shall be computed as of September 1
of the calendar year under consideration;

    (n) ``deductions'' means the amounts withheld, as provided in this act,
from warrants issued in payment for school services; and

    (o) ``actuarial computation'' means computation in accordance with
some standard actuarial table. The board shall determine which one of
the standard actuarial tables shall be used. The legal minimum standard
for the valuation of annuities shall be McClintock's ``table of mortality
among annuitants,'' with interest at 2% per annum. Whenever the amount
of any benefit is to be determined on the basis of actuarial assumptions,
the assumptions shall be specified in a way that precludes employer dis-
cretion; and

    (p) ``compensation'' means the same as provided in section 83 and
amendments thereto for purposes of nondiscrimination testing pursuant
to the federal internal revenue code of 1986, as in effect on July 1, 1998.

    Sec. 23. K.S.A. 72-5512 is hereby amended to read as follows: 72-
5512. Except as otherwise provided in this act, any school employee who
has attained the age of sixty-five (65) 65 shall be eligible to for a school
annuity, but any employee who has attained the age of sixty (60) may, at
his choice, 60, at such school employee's choice, may be granted an an-
nuity beginning on any September first from age sixty (60) to age seventy
(70) 60, inclusive. Any school annuity granted prior to age sixty-five (65)
65 shall not be the standard annuity, but shall be determined in accord-
ance with the early retirement schedule specified in K.S.A. 72-5518 and
amendments thereto, except as provided in K.S.A. 72-5513 and amend-
ments thereto for those who retire prior to age sixty (60) 60 because of
physical or mental disability. When an annuity is granted to a person past
age sixty-five (65), there shall be no back payments, and the service an-
nuity shall be computed as if the age were sixty-five (65). All annuities
shall be paid in equal monthly installments beginning on the first of Sep-
tember of that calendar year. The board may provide for types of life
annuities and refund annuities to be selected by the school employee at
the time of his such school employee's retirement.

    No person shall be employed for any school service to which this act
applies after August 31 of the calendar year in which he attains age sev-
enty (70). No person shall receive a school retirement annuity while em-
ployed in any position wherein service credit is being earned toward ben-
efits in another retirement system of the state of Kansas.

    No person shall be employed in school service while receiving a service
or disability annuity provided by this act. If any person engaged in school
service shall retire and has received one or more installments of a school
annuity and thereafter shall reenter school service, such person shall not
be entitled to any service credit for the time spent in school service after
reentering such service, nor shall he such person be entitled to receive
any installments of the service annuity withheld from him such person
while engaged in such school service, nor shall any deductions. Deduc-
tions shall not be made from his such person's salary for such school
service, except that any person who may have reentered school service as
a constitutional officer shall be permitted to pay into the state retirement
board four percent (4%) 4% of the first five thousand dollars ($5,000)
$5,000 of his such person's salary as such officer, while in such service
after reentry, and thereby become fully reinstated in the school retire-
ment plan as of the time of such reentry into school service. Any person
so reentering school service as provided in this section and thereafter
retiring again shall not be entitled to any installment payments of the
service annuity until the first September following such last retirement
from school service:Provided, however,, except that any school employee
so retired as provided in this section may perform school service as a
substitute employee, not to exceed ninety (90) 90 teaching days in any
one (1) school year, but. If such substitute employee continues in school
service longer than ninety (90) 90 teaching days in any one (1) school
year, his such substitute employee's retirement annuity shall cease and
become effective again on the first September following such last retire-
ment. Persons who are suspended annuitants on the day preceding the
effective date of this act April 25, 1969, shall be paid retroactively all
savings annuity installments theretofore withheld.

    Sec. 24. K.S.A. 72-5518 is hereby amended to read as follows: 72-
5518. (a) On retirement each school annuitant shall receive:

    (1) A savings annuity which shall be the actuarial equivalent of the
amount credited to such annuitant's savings account, with due consider-
ation of the option provisions in K.S.A. 72-5512 and amendments thereto,
and

    (2) a service annuity to be paid by the state of Kansas.

    The amount of any such service annuity shall be for persons who have:
One to 91/2 years of school service in Kansas, $2.00 per month for each
year. The service annuity of those having served for more than 91/2 years
shall be the total of $6.85 per month for each year of the first 35 years of
school service in Kansas, $3.50 per month for each year of school service
in Kansas in excess of 35 years for benefits accruing during the period
from September 1, 1979, to August 31, 1980, inclusive, and $6.85 per
month for each year of school service in Kansas in excess of 35 years for
benefits accruing on and after September 1, 1980.

    Those retiring with 25 or more years of school employment may count
up to 10 years out-of-state service as a school employee if the last five
years of school service immediately prior to retirement is in Kansas, but
such persons who attain the 25 or more years benefit schedule by count-
ing out-of-state service and those who attain said benefit schedule by
counting nonmember service shall receive the total of $6.85 per month
for each year of the first 35 years of Kansas school service, $3.50 per
month for each year of Kansas school service in excess of 35 years for
benefits accruing during the period from September 1, 1979, to August
31, 1980, inclusive, and $6.85 per month for each year of Kansas school
service in excess of 35 years for benefits accruing on and after September
1, 1980. The service annuity for school employees who retire on or after
September 1, 1969, between ages 60 and 64 shall be computed by ap-
plying a percentage to the standard rate allowable at age 65; such per-
centages according to age at the time of early retirement shall be:

Age 60 .....................................................80%
Age 61 .....................................................84%
Age 62 .....................................................88%
Age 63 .....................................................92%
Age 64 .....................................................96%
Except that those who first become school employees after September 1,
1965, cannot qualify for any service annuity unless such employee accu-
mulates at least 10 years of school service. Certain annuitants and former
school employees shall be grouped for the purpose of granting extraor-
dinary benefits, as follows:

    (A) Group I shall consist of school annuitants and former employees
who left school service prior to September 1, 1959, were born before
1895, and were school employees for at least 25 years. Any person in
group I shall be entitled to have all years as a school employee counted
as school service and a service annuity shall be granted in the total amount
of $6.85 per month for each year of the first 35 years of Kansas school
service, $3.50 per month for each year of Kansas school service in excess
of 35 years for benefits accruing during the period from September 1,
1979, to August 31, 1980, inclusive, and $6.85 per month for each year
of Kansas school service in excess of 35 years for benefits accruing on and
after September 1, 1980.

    (B) Group II shall consist of annuitants with at least 25 years of school
employment, who were born before March 1, 1895, who retired prior to
September 1, 1959, and are receiving a retirement annuity from a city
board of education maintaining a separate retirement system. Any person
in group II who is receiving an annuity from such city retirement system
of a lesser amount per month than the total amount obtained by (i) mul-
tiplying $6.85 by the number of years engaged as a school employee in
Kansas not exceeding 35 years and (ii) multiplying $3.50 by the number
of years engaged as a school employee in Kansas in excess of 35 years for
benefits accruing during the period from September 1, 1979, to August
31, 1980, inclusive, or multiplying $6.85 by the number of years engaged
as a school employee in Kansas in excess of 35 years for benefits accruing
on and after September 1, 1980, shall be entitled to receive monthly the
difference in such amounts as a service annuity. After September 1, 1965,
no additional group II annuitants shall be established; instead such sep-
arate city retirement systems are hereby authorized to increase the ben-
efits of any such annuitant, whose membership has not heretofore been
established in the Kansas school retirement system, to the amount of the
service annuity an eligible annuitant with the same school service would
be entitled to receive under the state school retirement system.

    (C) Group III shall consist of annuitants who retired before Septem-
ber 1, 1956, with school service in excess of 35 years and who have not
qualified for any social security benefits. Notwithstanding the limitations
elsewhere imposed in this section, any person in group III shall be paid
by the retirement system in which such person has established member-
ship $6.85 per month for each year of school service, except that in the
event any person who retires from school service qualifies for more than
one service annuity under the provisions of this section, such person shall
only be entitled to receive one service annuity which shall be the one
which is the largest.

    (b) Subject to the provisions of section 83 and amendments thereto,
the board shall provide for a joint annuity at the option of the school
employee exercised at the time of, or prior to, the date of retirement from
school service whereby the service annuity shall be actuarially reduced
according to the age and sex of the individual named by the school em-
ployee as the joint annuitant. The reduced service annuity will then be
paid to the annuitant during such annuitant's lifetime and a like amount
continued for the life of the joint annuitant should the joint annuitant
survive the annuitant. In case the amount available in any fiscal year is
not sufficient to pay all service annuities in full, the amount available shall
be prorated among the claimants, but the deficiency shall not constitute
a claim against the state of Kansas.

    Sec. 25. K.S.A. 72-5520 is hereby amended to read as follows: 72-
5520. In case any school employee quits school service at any time, not-
withstanding the provisions of K.S.A. 72-5519 or acts amendatory thereof
and amendments thereto, the amount credited to his such school em-
ployee's savings account shall, at the option of the school employee, shall
be refunded to him such school employee and his such school employee's
claims upon the retirement fund, service annuity fund and employees
savings fund shall thereby be terminated. In case any such school em-
ployee who has two or more years of service in Kansas shall later return
returns to school service, he subject to the provisions of section 83 and
amendments thereto, such school employee may return the amount re-
funded to him such school employee without either interest or penalty,
and regain his such school employee's original status with the retirement
system if he such employee returns the amount so refunded within twelve
(12) 12 months after the date he such school employee reenters school
service and if he such school employee continues in school service for at
least one (1) school year: Provided, however,, except that such person
withdrawing from school service shall not be permitted to make appli-
cation for funds credited to his such person's savings account until six
months shall have expired after his such person's withdrawal from school
service.

    Sec. 26. K.S.A. 1997 Supp. 74-4902 is hereby amended to read as
follows: 74-4902. As used in articles 49 and 49a of chapter 74 and amend-
ments thereto, unless otherwise provided or the context otherwise re-
quires:

    (1) ``Accumulated contributions'' means the sum of all contributions
by a member to the system which are credited to the member's account,
with interest allowed thereon;

    (2) ``acts'' means K.S.A. 74-4901 to 74-4929, inclusive, and amend-
ments thereto;

    (3) ``actuarial equivalent'' means an annuity or benefit of equal value
to the accumulated contributions, annuity or benefit, when computed
upon the basis of the actuarial tables in use by the system. Whenever the
amount of any benefit is to be determined on the basis of actuarial as-
sumptions, the assumptions shall be specified in a way that precludes
employer discretion;

    (4) ``actuarial tables'' means the actuarial tables approved and in use
by the board at any given time;

    (5) ``actuary'' means the actuary or firm of actuaries employed or
retained by the board at any given time;

    (6) ``agent'' means the individual designated by each participating em-
ployer through whom system transactions and communication are di-
rected;

    (7) ``beneficiary'' means any natural person or persons or estate
named by a member to receive any benefits as provided for by this act.
Designations of beneficiaries by a member who is a member of more
than one retirement system made on or after July 1, 1987, shall be the
basis of any benefits payable under all systems unless otherwise provided
by law. Except as otherwise provided by subsection (33) of this section,
if there is no named beneficiary living at time of member's death, any
benefits provided for by this act shall be paid to: (A) The member's sur-
viving spouse; (B) the member's dependent child or children; (C) the
member's dependent parent or parents; (D) the member's nondependent
child or children; (E) the member's nondependent parent or parents; (F)
the estate of the deceased member; in the order of preference as specified
in this subsection. Any payment made to a named beneficiary shall be a
full discharge and release to the system from any further claims. Any
payment made to a beneficiary as provided in clauses (A), (B), (C), (D),
(E) or (F) of this subsection, as determined by the board, shall be a full
discharge and release to the system from any further claims. Whenever
any payment is payable to more than one beneficiary such payment shall
be made to such beneficiaries jointly. Any benefits payable to a benefi-
ciary or beneficiaries who are minor children or incompetent persons
shall be made in the name of the beneficiary or beneficiaries and deliv-
ered to the lawfully appointed conservator of such beneficiaries who was
nominated by will or as otherwise provided by law, except that in those
cases where the benefit involves only the payment of the member's ac-
cumulated contributions with interest as provided by this act in an amount
not to exceed $500, the board is hereby authorized in its discretion with-
out the appointment of a conservator or the giving of a bond to pay such
amount as is due to the minor or minors themselves, any payment so
made shall be a full discharge and release to the system from any further
claims;

    (8) ``board of trustees,'' ``board'' or ``trustees'' means the managing
body of the system which is known as the Kansas public employees re-
tirement system board of trustees;

    (9) ``compensation'' means, except as otherwise provided, all salary,
wages and other remuneration payable to a member for personal services
performed for a participating employer, including maintenance or any
allowance in lieu thereof provided a member as part of compensation,
but not including reimbursement for travel or moving expenses or on and
after July 1, 1994, payment pursuant to an early retirement incentive
program made prior to the retirement of the member. Beginning with
the employer's fiscal year which begins in calendar year 1991 or for em-
ployers other than the state of Kansas, beginning with the fiscal year
which begins in calendar year 1992, when the compensation of a member
who remains in substantially the same position during any two consecutive
years of participating service used in calculating final average salary is
increased by an amount which exceeds 15%, then the amount of such
increase which exceeds 15% shall not be included in compensation, ex-
cept that (A) any amount of compensation for accumulated sick leave or
vacation or annual leave paid to the member, (B) any increase in com-
pensation for any member due to a reclassification or reallocation of such
member's position or a reassignment of such member's job classification
to a higher range or level and (C) any increase in compensation as pro-
vided in any contract entered into prior to January 1, 1991, and still in
force on the effective date of this act, pursuant to an early retirement
incentive program as provided in K.S.A. 72-5395 et seq. and amendments
thereto, shall be included in the amount of compensation of such member
used in determining such member's final average salary and shall not be
subject to the 15% limitation provided in this subsection. Any contribu-
tions by such member on the amount of such increase which exceeds
15% which is not included in compensation shall be returned to the mem-
ber. Unless otherwise provided by law, beginning with the employer's
fiscal year coinciding with or following July 1, 1985, compensation shall
include any amounts for tax sheltered annuities or deferred compensation
plans. Beginning with the employer's fiscal year which begins in calendar
year 1991, compensation shall include amounts under sections 403b, 457
and 125 of the federal internal revenue code of 1986 and any other section
of the federal internal revenue code of 1986 which defers or excludes
amounts from inclusion in income. For purposes of applying limits under
the federal internal revenue code ``compensation'' shall have the meaning
as provided in section 83 and amendments thereto;

    (10) ``credited service'' means the sum of participating service and
prior service and in no event shall credited service include any service
which is credited under another retirement plan authorized under any
law of this state;

    (11) ``dependent'' means a parent or child of a member who is de-
pendent upon the member for at least 1/2 of such parent or child's support;

    (12) ``effective date'' means the date upon which the system becomes
effective by operation of law;

    (13) ``eligible employer'' means the state of Kansas, and any county,
city, township, special district or any instrumentality of any one or several
of the aforementioned or any noncommercial public television or radio
station located in this state which receives state funds allocated by the
Kansas public broadcasting commission whose employees are covered by
social security. If a class or several classes of employees of any above
defined employer are not covered by social security, such employer shall
be deemed an eligible employer only with respect to such class or those
classes of employees who are covered by social security;

    (14) ``employee'' means any appointed or elective officer or employee
of a participating employer whose employment is not seasonal or tem-
porary and whose employment requires at least 1,000 hours of work per
year, but not including: (A) Any person covered by or eligible for or who
will become eligible for a retirement annuity under the provisions of
K.S.A. 74-4925 and amendments thereto except as otherwise specifically
provided in subsection (3) of K.S.A. 74-4925 and amendments thereto
and this subsection; (B) any employee who is a contributing member of
the United States civil service retirement system; (C) any employee of an
eligible employer who is a participant in public service employment under
title II and title VI of the federal comprehensive employment and training
act of 1973; (D) any employee who is a leased employee of a participating
employer. ``Leased employee'' means the same as provided in section 414
of the federal internal revenue code; (E) any employee or class of em-
ployees specifically exempted by law. After June 30, 1975, no person who
is otherwise eligible for membership in the Kansas public employees re-
tirement system shall be barred from such membership by reason of
coverage by, eligibility for or future eligibility for a retirement annuity
under the provisions of K.S.A. 74-4925 and amendments thereto, except
that no person shall receive service credit under the Kansas public em-
ployees retirement system for any period of service for which benefits
accrue or are granted under a retirement annuity plan under the provi-
sions of K.S.A. 74-4925 and amendments thereto. After June 30, 1982,
no person who is otherwise eligible for membership in the Kansas public
employees retirement system shall be barred from such membership by
reason of coverage by, eligibility for or future eligibility for any benefit
under another retirement plan authorized under any law of this state,
except that no such person shall receive service credit under the Kansas
public employees retirement system for any period of service for which
any benefit accrues or is granted under any such retirement plan. Em-
ployee shall include persons who are in training at or employed by, or
both, a sheltered workshop for the blind operated by the secretary of
social and rehabilitation services. The entry date for such persons shall
be the beginning of the first pay period of the fiscal year commencing in
calendar year 1986. Such persons shall be granted prior service credit in
accordance with K.S.A. 74-4913 and amendments thereto. However, such
persons classified as home industry employees shall not be covered by
the retirement system;

    (15) ``entry date'' means the date as of which an eligible employer
joins the system. The first entry date pursuant to this act is January 1,
1962;

    (16) ``executive secretary'' means the managing officer of the system
employed by the board under this act;

    (17) ``final average salary'' means in the case of a member who retires
prior to January 1, 1977, and in the case of a member who retires after
January 1, 1977, and who has less than five years of participating service
after January 1, 1967, the average highest annual compensation paid to
such member for any five years of the last 10 years of participating service
immediately preceding retirement or termination of employment, or in
the case of a member who retires on or after January 1, 1977, and who
has five or more years of participating service after January 1, 1967, the
average highest annual compensation paid to such member on or after
January 1, 1967, for any five years of participating service preceding re-
tirement or termination of employment, or, in any case, if participating
service is less than five years, then the average annual compensation paid
to the member during the full period of participating service, or, in any
case, if the member has less than one calendar year of participating service
such member's final average salary shall be computed by multiplying such
member's highest monthly salary received in that year by 12; in the case
of a member who became a member under subsection (3) of K.S.A. 74-
4925 and amendments thereto, or who became a member with a partic-
ipating employer as defined in subsection (3) of K.S.A. 74-4931 and
amendments thereto and who elects to have compensation paid in other
than 12 equal installments, such compensation shall be annualized as if
the member had elected to receive 12 equal installments for any such
periods preceding retirement; in the case of a member who retires after
July 1, 1987, the average highest annual compensation paid to such mem-
ber for any four years of participating service preceding retirement or
termination of employment; in the case of a member who retires on or
after July 1, 1993, who was first hired as an employee, as defined in
subsection (14) of K.S.A. 74-4902 and amendments thereto, prior to July
1, 1993, the average highest annual compensation, as defined in subsec-
tion (9), paid to such member for any four years of participating service
preceding retirement or termination of employment or the average high-
est annual salary, as defined in subsection (34), paid to such member for
any three years of participating service preceding retirement or termi-
nation of employment, whichever is greater; and in the case of a member
who retires on or after July 1, 1993, and who is first hired as an employee,
as defined in subsection (14) of K.S.A. 74-4902 and amendments thereto,
on or after July 1, 1993, the average highest annual salary, as defined in
subsection (34), paid to such member for any three years of participating
service preceding retirement or termination of employment. Final aver-
age salary shall not include any purchase of participating service credit
by a member as provided in subsection (2) of K.S.A. 74-4919h and
amendments thereto which is completed within five years of retirement.
For any application to purchase or repurchase service credit for a certain
period of service as provided by law received by the system after May 17,
1994, for any member who will have contributions deducted from such
member's compensation at a percentage rate equal to two or three times
the employee's rate of contribution or will begin paying to the system a
lump-sum amount for such member's purchase or repurchase and such
deductions or lump-sum payment commences after the commencement
of the first payroll period in the third quarter, ``final average salary'' shall
not include any amount of compensation or salary which is based on such
member's purchase or repurchase. Any application to purchase or repur-
chase multiple periods of service shall be treated as multiple applications.
For purposes of this subsection, the date that such member is first hired
as an employee for members who are employees of employers that
elected to participate in the system on or after January 1, 1994, shall be
the date that such employee's employer elected to participate in the sys-
tem;

    (18) ``fiscal year'' means, for the Kansas public employees retirement
system, the period commencing July 1 of any year and ending June 30 of
the next;

    (19) ``Kansas public employees retirement fund'' means the fund cre-
ated by this act for payment of expenses and benefits under the system
and referred to as the fund;

    (20) ``leave of absence'' means a period of absence from employment
without pay, authorized and approved by the employer, and which after
the effective date does not exceed one year;

    (21) ``member'' means an eligible employee who is in the system and
is making the required employee contributions, or any former employee
who has made the required contributions to the system and has not re-
ceived a refund;

    (22) ``military service'' means service in the armed uniformed forces
of the United States or in the United States public health service, for
which retirement benefit credit must be given under the provisions of
USERRA or service in the armed forces of the United States or in the
United State public health service, which service is immediately preceded
by a period of employment as an employee or by the entering into of an
employment contract with a participating employer and is followed by
return to employment as an employee with the same or another partici-
pating employer within 12 months immediately following discharge from
such military service, except that if the board determines that such return
within 12 months was made impossible by reason of a service-connected
disability, the period within which the employee must return to employ-
ment with a participating employer shall be extended not more than two
years from the date of discharge or separation from military service;

    (23) ``normal retirement date'' means the date on or after which a
member may retire with full retirement benefits pursuant to K.S.A. 74-
4914 and amendments thereto;

    (24) ``participating employer'' means an eligible employer who has
agreed to make contributions to the system on behalf of its employees;

    (25) ``participating service'' means the period of employment after
the entry date for which credit is granted a member;

    (26) ``prior service'' means the period of employment of a member
prior to such member's entry date for which credit is granted a member
under this act;

    (27) ``prior service annual salary'' means the highest annual salary,
not including any amounts received as payment for overtime or as re-
imbursement for travel or moving expense, received for personal services
by the member from the current employer in any one of the three cal-
endar years immediately preceding January 1, 1962, or the entry date of
the employer, whichever is later, except that if a member entered the
employment of the state during the calendar year 1961, the prior service
annual salary shall be computed by multiplying such member's highest
monthly salary received in that year by 12;

    (28) ``retirant'' means a member who has retired under this system;

    (29) ``retirement benefit'' means a monthly income or the actuarial
equivalent thereof paid in such manner as specified by the member pur-
suant to this act or as otherwise allowed to be paid at the discretion of
the board, with benefits accruing from the first day of the month coin-
ciding with or following retirement and ending on the last day of the
month in which death occurs. Upon proper identification a surviving
spouse may negotiate the warrant issued in the name of the retirant;

    (30) ``retirement system'' or ``system'' means the Kansas public em-
ployees retirement system as established by this act and as it may be
amended;

    (31) ``social security'' means the old age, survivors and disability in-
surance section of the federal social security act;

    (32) ``total disability'' means a physical or mental disability which pre-
vents the member from engaging, for remuneration or profit, in any oc-
cupation for which the member is reasonably suited by education, training
or experience;

    (33) ``trust'' means an express trust, created by a trust instrument,
including a will, designated by a member to receive payment of the in-
sured death benefit under K.S.A. 74-4927 and amendments thereto and
payment of the member's accumulated contributions under subsection
(1) of K.S.A. 74-4916 and amendments thereto. A designation of a trust
shall be filed with the board. If there is a designated trust at the time of
the member's death, the insured death benefit for the member under
K.S.A. 74-4927 and amendments thereto and the member's accumulated
contributions under subsection (1) of K.S.A. 74-4916 and amendments
thereto shall be paid to the trust in lieu of the member's beneficiary. If
no will is admitted to probate within six months after the death of the
member or no trustee qualifies within such six months or if the designated
trust fails, for any reason whatsoever, the insured death benefit under
K.S.A. 74-4927 and amendments thereto and the member's accumulated
contributions under subsection (1) of K.S.A. 74-4916 and amendments
thereto shall be paid in accordance with the provisions of subsection (7)
of this section as in other cases where there is no named beneficiary living
at the time of the member's death and any payments so made shall be a
full discharge and release to the system from any further claims; and

    (34) ``salary'' means all salary and wages payable to a member for
personal services performed for a participating employer, including main-
tenance or any allowance in lieu thereof provided a member as part of
salary. Salary shall not include reimbursement for travel or moving ex-
penses, payment for accumulated sick leave or vacation or annual leave,
severance pay or any other payments to the member determined by the
board to not be payments for personal services performed for a partici-
pating employer constituting salary or on and after July 1, 1994, payment
pursuant to an early retirement incentive program made prior to the
retirement of the member. When the salary of a member who remains
in substantially the same position during any two consecutive years of
participating service used in calculating final average salary is increased
by an amount which exceeds 15%, then the amount of such increase
which exceeds 15% shall not be included in salary. Any contributions by
such member on the amount of such increase which exceeds 15% which
is not included in compensation shall be returned to the member. Unless
otherwise provided by law, salary shall include any amounts for tax shel-
tered annuities or deferred compensation plans. Salary shall include
amounts under sections 403b, 457 and 125 of the federal internal revenue
code of 1986 and any other section of the federal internal revenue code
of 1986 which defers or excludes amounts from inclusion in income. For
purposes of applying limits under the federal internal revenue code ``sal-
ary'' shall have the meaning as provided in section 83 and amendments
thereto. In any case, if participating service is less than three years, then
the average annual salary paid to the member during the full period of
participating service, or, in any case, if the member has less than one
calendar year of participating service such member's final average salary
shall be computed by multiplying such member's highest monthly salary
received in that year by 12.;

    (35) ``federal internal revenue code'' means the federal internal rev-
enue code of 1954 or 1986, as in effect on July 1, 1998, and as applicable
to a governmental plan; and

    (36) ``USERRA'' means the federal uniformed services employment
and reemployment rights act of 1994 as in effect on July 1, 1998.

    Sec. 27. K.S.A. 1997 Supp. 74-4909 is hereby amended to read as
follows: 74-4909. (1) The board of trustees shall be responsible for the
general administration of the system, subject to the provisions of this act.

    (2) The board shall establish rules and regulations for the adminis-
tration of the system and for the transaction of business consistent with
law, which rules and regulations shall be filed in the office of the secretary
of state.

    (3) The board shall be responsible for the installation of a complete
and adequate system of accounts and records. The board shall contract
with the department of administration to provide such accounting services
as are necessary to avoid duplication of efforts and promote efficiency.
The board shall pay the department of administration an amount not
exceeding the actual cost incurred in providing this service, which pay-
ments shall be deposited in the state treasury and then credited to the
state general fund.

    (4) All meetings of the board shall be open to the public. The board
shall keep a record of all proceedings.

    (5) The board may prescribe rules and regulations for the determi-
nation of the value of maintenance, board, lodging, laundry and other
allowances to employees in lieu of money.

    (6) The board may adopt all necessary actuarial tables to be used in
the operation of the system as recommended by the actuary, and may
compile such additional data as may be necessary for required actuarial
valuations and calculations. Whenever the amount of any benefit is to be
determined on the basis of actuarial assumptions, the assumptions spec-
ified by the board in a way that precludes employer discretion.

    (7) Subject to the provisions of section 83 and amendments thereto,
the board or the investment committee may invest all cash not required
for current payments in securities eligible for investment under this act.
All actions of the investment committee shall be reported to the board at
the first meeting of the board following the action of the investment
committee.

    (8) The board, as soon after the close of the fiscal year as practical,
shall publish for distribution among members a financial statement show-
ing the financial status of the system.

    (9) All decisions of the board as to questions of fact shall be final and
conclusive on all persons except for the right of review as provided by
law and except for fraud or such gross mistake of fact as to have an effect
equivalent to fraud.

    (10) Each member's account and records shall be administered in a
confidential manner and specific data regarding the member shall not be
released unless authorized in writing by the member; however, the board
may release information to the employer or to other state and federal
agencies as the board deems necessary.

    (11) The board shall develop and adopt a specific plan which outlines
strategies, goals, procedures and related costs, including additional em-
ployees necessary to carry out the provisions of this subsection, to provide
for the system's internal management of the investment and reinvestment
of moneys of the fund as provided in K.S.A. 74-4921 and amendments
thereto. Such internal management would replace the management of all
or part of the fund by persons the board has contracted with as provided
in subsection (7) of K.S.A. 74-4921 and amendments thereto. The board
shall report such plan developed pursuant to this subsection to the leg-
islature and the governor on or before January 1, 1993.

    (12) The board shall adopt rules and regulations providing the
requirements and procedures for the election of members of the board
by members and retirants of the system as provided in subsection (a)(2)
of K.S.A. 74-4905 and amendments thereto, as such statute is amended
in section 1 of 1992 Senate Bill No. 526, effective July 1, 1993, and for
the filling of any vacancy involving such elected member of the board.

    (13) The board shall cooperate with and provide any assistance to the
actuary, the legislative coordinating council and the joint committee on
pensions, investments and benefits related to the independent actuarial
audit and evaluation as provided in K.S.A. 1996 Supp. 74-4908a and
amendments thereto.

    Sec. 28. K.S.A. 1997 Supp. 74-4911 is hereby amended to read as
follows: 74-4911. (1) Any employee of a participating employer other than
an elected official on the entry date of such employer shall be a member
of the system on either the entry date or the first day of the payroll period
coinciding with or following the completion of one year of service, which-
ever is later. For purposes of this act occasional breaks in service which
shall not exceed an aggregate of 10 days in any such year shall not con-
stitute a break in service for purposes of determining the membership
date of such employee.

    (2) Except as otherwise provided in this subsection, any employee
other than an elected official who is employed by a participating employer
after the entry date of such employer shall be a member of the system
on the first day of the payroll period coinciding with or following com-
pletion of one year of continuous service. For purposes of this act, oc-
casional breaks in service which shall not exceed an aggregate of 10 days
in any such year shall not constitute a break in continuous service for
purposes of determining the membership date of such employee. For
purposes of this subsection, any employee of a local governmental unit
which has its own pension plan who becomes an employee of a partici-
pating employer as a result of a merger or consolidation of services pro-
vided by local governmental units, which occurred on January 1, 1994,
may count service with such local governmental unit in determining
whether such employee has met the one year of continuous service re-
quirement contained in this subsection.

    (3) Any employee who is an elected official and is eligible to join the
system shall elect file, within 90 days after taking the oath of office, an
irrevocable election to become or not to become a member of the system.
Such election shall become effective on the first day of the first payroll
period of the first quarter following receipt of the election in the office
of the retirement system. In the event that such elected official fails to
file the election to become a member of the retirement system, it shall
be presumed that such person has elected not to become a member.

    (4) Except as otherwise required by USERRA, any employee other
than an elected official who is in military service or on leave of absence
on the entry date of such employee's employer shall become a member
of the system upon returning to active employment or on the first day of
the payroll period coinciding with or following the completion of one year
of service, whichever is later. For purposes of this act, occasional breaks
in service which shall not exceed an aggregate of 10 days in any such year
shall not constitute a break in service for purposes of determining the
membership date of such employee.

    (5) Any employee of the state of Kansas other than an elected official,
who is receiving or is eligible for assistance by the state board of regents
in the purchase of a retirement annuity under K.S.A. 74-4925, and
amendments thereto, and who becomes ineligible for such assistance be-
cause such employee's position is reclassified to a position in the classified
service under the Kansas civil service act, or who becomes ineligible for
such assistance because such person accepts and transfers to a position
in the classified service under the Kansas civil service act shall be a mem-
ber of the system on the first day of the payroll period coinciding with or
following the effective date of such reclassification or transfer. Any such
employee who became ineligible for such assistance prior to the effective
date of this act because of such a reclassification or such a transfer oc-
curring prior to the effective date of this act and who is not a member of
the system on the effective date of this act shall be a member of the
system on the first day of the payroll period coinciding with or following
the effective date of this act.

    (6) Any employee of the state board of regents or of an educational
institution under its management, other than an elected official, who is a
member of the system and who becomes ineligible to be a member of
the system because such employee's position is reclassified to a position
under the Kansas civil service act which is eligible for assistance by the
state board of regents in the purchase of a retirement annuity under
K.S.A. 74-4925 and amendments thereto, or who becomes ineligible to
be a member of the system because such employee transfers to a position
under the Kansas civil service act which is eligible for such assistance,
shall become eligible for such assistance in accordance with the provisions
of K.S.A. 74-4925 and amendments thereto, unless such employee files
a written election in the office of the retirement system, in the form and
manner prescribed by the board of trustees thereof, to remain a member
of the system prior to the first day of the first complete payroll period
occurring after the effective date of such reclassification or transfer. Fail-
ure to file such written election shall be presumed to be an election not
to remain a member of the system and to become eligible for assistance
by the state board of regents in the purchase of a retirement annuity
under K.S.A. 74-4925 and amendments thereto. Such election, whether
to remain a member of the system or to become eligible for such assis-
tance, shall be effective as of the effective date of such reclassification or
transfer, and shall be irrevocable.

    (7) Any employee who is an elected official and is eligible to join the
system as a result of being an elected official, and who at the time of
becoming an elected official is already a member of the system by being
or having been an employee of a participating employer shall elect to
continue as a member of the system or not to continue as a member of
the system. Such election shall become effective on the first day of the
first payroll period of the first quarter following receipt of the election in
the office of the retirement system. In the event that such elected official
fails to file the election to continue as a member of the system or not to
continue as a member of the system, it shall be presumed that such
elected official has elected to continue as a member of the system.

    Sec. 29. K.S.A. 74-4911c is hereby amended to read as follows: 74-
4911c. (a) Each person who is an employee of a participating employer
on June 30, 1982, who was barred from membership in the Kansas public
employees retirement system under the law in effect on June 30, 1982,
by reason of coverage by, eligibility for or future eligibility for another
retirement plan authorized under any other law of this state, and who is
made eligible by this act to be a member of the Kansas public employees
retirement system, may make an election in accordance with this section
to become a member of that system. No such person shall become a
member of the Kansas public employees retirement system in accordance
with this section and K.S.A. 74-4911 or 74-4935 and amendments thereto,
whichever is applicable, unless such person files a written statement of
election to become a member of the system under this section. A written
statement of election to become a member of the system shall be filed
with the board of trustees. Each election by filing a written statement of
election under this section shall be effective on the first day of the first
payroll period of the calendar quarter coinciding with or following the
date of such filing and shall be irrevocable.

    (b) No election shall be made as provided in subsection (a) after June
30, 1998.

    Sec. 30. K.S.A. 74-4911e is hereby amended to read as follows: 74-
4911e. (a) Each person who is an elected official on and after January 1,
1985, and who is a member of the Kansas public employees retirement
system, may elect to continue to participate in the Kansas public em-
ployees retirement system under the provisions of this act after the date
such person's service as an elected official terminates unless such person
immediately becomes an employee of another participating employer.
Such person's election is valid only if such person files notice of such
election in the office of the executive secretary of the Kansas public em-
ployees retirement system, in a form acceptable to the system, within 30
days of the termination of such person's service as an elected official.

    (b) For the purposes of contributions to and benefits under the Kan-
sas public employees retirement system, compensation of such members
shall be a monthly amount equal to the greater of (1) the compensation
to which the elected official was entitled for services as an elected official
during the period January 15 to February 14, inclusive, of the most recent
year, or (2) the monthly amount of such person's compensation at the
time that such person's service as an elected official terminates. The em-
ployer rate of contribution for the state of Kansas and employee rate of
contribution shall be applied to such amounts monthly. Such person shall
remit the required employer and employee contributions to the system
quarterly in advance with a report as may be required by the system.

    (c) Any election by such person under subsection (a) shall remain in
effect until revoked in writing and received by the system or such person
becomes an employee of another participating employer or upon failure
of such person to remit to the system the employer and employee con-
tributions required under subsection (b).

    (d) This act or acts amendatory thereof and supplemental thereto
shall become a part of the Kansas public employees retirement act as
defined in subsection (2) of K.S.A. 74-4902 and amendments thereto and
shall be governed thereby in all respects, except if words and phrases
used in this act appear to have a different meaning, the provisions of this
act shall prevail.

    (e) The provisions of subsection (2) of K.S.A. 74-4916 and amend-
ments thereto are not applicable to any person making an election under
subsection (a).

    (f) No election shall be made as provided in subsection (a) after June
30, 1998.

    Sec. 31. K.S.A. 1997 Supp. 74-4911f is hereby amended to read as
follows: 74-4911f. (a) Subject to procedures or limitations prescribed by
the governor, any person who is not an employee and who becomes a state
officer may elect to not become a member of the system. The election to
not become a member of the system must be filed within 90 days of as-
suming the position of state officer. Such election shall be irrevocable. If
such election is not filed by such state officer, such state officer shall be a
member of the system.

    (b) (1) Any such state officer described in subsection (a) who is a
member of the Kansas public employees retirement system, on or after
the effective date of this act, may elect to not be a member by filing an
election with the office of the retirement system. Each state officer filing
such election may withdraw the state officer's accumulated contributions
then on deposit with the system in the same manner as prescribed in
K.S.A. 74-4917 and amendments thereto for employees upon termina-
tion.

    (2) Any state officer who has filed an election and received a refund
of contributions shall be entitled to again become a member of the system
upon the filing of proper notice in such form as prescribed by the system
and upon the making of a single lump-sum payment in an amount equal
to all withdrawn contributions, plus interest at a rate specified by the
system. The election to not become a member of the system must be filed
within 90 days of assuming the position of state officer. If such election
is not filed by such state officer, such state officer shall be a member of
the system.

    (c) Subject to limitations prescribed by the secretary of administra-
tion, the state agency employing any employee who has filed an election
as provided under subsection (a) or (b) and who has entered into an
employee participation agreement, as provided in K.S.A. 75-5524 and
amendments thereto for deferred compensation pursuant to the Kansas
public employees deferred compensation plan shall contribute to such
plan on such employee's behalf an amount equal to 8% of the employee's
salary, as such salary has been approved pursuant to K.S.A. 75-2935b and
amendments thereto or as otherwise prescribed by law.

    (d) As used in this section and K.S.A. 74-4927k and amendments
thereto, ``state officer'' means the secretary of administration, secretary
on aging, secretary of commerce and housing, secretary of corrections,
secretary of health and environment, secretary of human resources, sec-
retary of revenue, secretary of social and rehabilitation services, secretary
of transportation, secretary of wildlife and parks, superintendent of the
Kansas highway patrol, secretary of agriculture, executive director of the
Kansas lottery, executive director of the Kansas racing commission, pres-
ident of the Kansas development finance authority, state fire marshal,
state librarian, securities commissioner, adjutant general, members of the
state board of tax appeals, members of the Kansas parole board, members
of the state corporation commission, any unclassified employee on the
staff of officers of both houses of the legislature, any unclassified em-
ployee appointed to the governor's or lieutenant governor's staff and any
person employed by the legislative branch of the state of Kansas, other
than any such person receiving service credited under the Kansas public
employees retirement system or any other retirement system of the state
of Kansas therefor, who elected to be covered by the provisions of this
section as provided in subsection (e) of K.S.A. 46-1302 and amendments
thereto or who is first employed on or after July 1, 1996, by the legislative
branch of the state of Kansas.

    (e) The provisions of this section shall not apply to any state officer
who has elected to remain eligible for assistance by the state board of
regents as provided in subsection (a) of K.S.A. 74-4925 and amendments
thereto.

    Sec. 32. K.S.A. 74-4912 is hereby amended to read as follows: 74-
4912. (1) The state of Kansas or any county, city, township, special district
or instrumentality of any of the aforementioned whose employees or a
class of whose employees are members of any other retirement or pension
plan authorized by a statute of the state of Kansas may by resolution
adopted by the board, body or officer or officers authorized to apply for
application pursuant to K.S.A. 74-4910 and any amendments thereto,
request the board to submit a proposal for consolidation of such other
system with the Kansas public employees retirement system including an
estimate of the contribution rate necessary to comply with the actuarial
standard of this system. Such proposal shall provide that:

    (a) The operation of such other pension system shall be discontinued;

    (b) the existing retirants or annuitants of such other system shall con-
tinue to be paid by the Kansas public employees retirement system on
the basis of the benefits schedule applicable in such other system at the
date of proposed consolidation, except that all such benefits shall be paid
in accordance with the applicable requirements of section 401 (a)(9) of
the federal internal revenue code and the regulations thereto in effect on
July 1, 1998. Active members of such other system shall be deemed vested
in such member's accrued benefit under such system;

    (c) all cash and securities to the credit of such other system shall be
transferred to the Kansas public employees retirement system;

    (d) funds of such other system which represent accumulated contri-
butions, if any, of members shall be credited to the employees accumu-
lated contribution reserve of each employee. The balance of the funds so
transferred to the Kansas public employees retirement system shall be
offset against the liability on account of existing retirants, annuitants and
active members;

    (e) the resulting liability so determined shall be the basis for a rate
of contribution of such employer; and

    (f) such consolidation shall take effect only on January 1 of any given
year.

    (2) Before any employer shall adopt a resolution of affiliation which
shall propose to accept a proposal of the board as provided in this section,
at least sixty percent (60%) 60% of the members (, not retirants or an-
nuitants), shall approve such consolidation. The board shall prescribe the
manner in which such consent shall be exercised.

    Sec. 33. K.S.A. 1997 Supp. 74-4913 is hereby amended to read as
follows: 74-4913. (1) Prior service shall be credited as follows:

    (a) A member shall receive full credit for continuous employment
prior to the entry date with such member's employer on the entry date.
If the employee was employed on March 15, 1961, by the employer who
is the employee's employer on the employee's entry date, then all such
previous employment, whether or not continuous, shall be credited; oth-
erwise no credit shall be granted for employment prior to a break in
continuous employment. Any member or retirant who has been credited
with prior service as hereinbefore provided and who was employed by
any participating employer on March 15, 1961, may apply to the board
on such forms as it may prescribe for prior service credit with a partici-
pating employer other than the member's entry date employer. Upon
receipt of written verification of such employment from the participating
employer, the board may grant such additional prior service credit and
with respect to a retirant, shall adjust the amount of the retirement ben-
efit accordingly commencing with the next monthly benefit payment due
following receipt of the written verification, except that such retirant shall
not be entitled to any retroactive adjustment in the amount of such re-
tirement benefit as a result of the board granting such additional prior
service credit. In the case of any person other than a retirant receiving a
retirement benefit, such person may make application for an adjustment
in the benefit amount in the same manner as a member or retirant, and
in such case the adjustment in the benefit amount shall be determined
by the board upon the advice of the actuary, and shall commence with
the next monthly benefit payment due following receipt of the written
verification;

    (b) leaves of absence and military service shall not be counted as
breaks in continuous employment; however, military service which is im-
mediately preceded and followed by employment with a participating
employer shall be credited, except that after July 1, 1974, not more than
five years' credit for military service shall be granted hereunder to the
extent required under USERRA, but leaves of absence shall not be cred-
ited;

    (c) any member who was employed in the Kansas state employment
service, now a section of the Kansas division of employment security,
during any of the time the Kansas state employment service was loaned
by the state to the federal government (January 1, 1942, for the duration
of the emergency period of world war II, which service was returned to
the state by the federal government effective November 16, 1946) shall
be entitled to prior service credit for the time so employed during the
period stated for any service rendered under the jurisdiction of the United
States employment service for the federal government in like manner as
if the employment service had remained under the jurisdiction of the
state of Kansas;

    (d) any member who is not otherwise eligible for service credit as
provided for in subsection (1)(a) may be granted credit for the service
upon the attainment of 38 quarters of participating service;

    (e) any member who was employed by the university of Wichita prior
to July 1, 1964, shall be entitled to prior service credit for such time of
employment under the Kansas public employees retirement system,
when such employment is not the basis for other pension rights.

    (2) Participating service shall be credited as follows: (a) A member
shall receive credit for participating service with a participating employer
in accordance with the rules and regulations established by the board of
trustees, except that no more than one calendar quarter of participating
service shall be credited for any employment within any one calendar
quarter;

    (b) leaves of absence and military service shall not count as a break
in continuous employment provided the. In the case of a leave of absence,
the member leaves shall leave such member's accumulated contribution
on deposit with the fund; however, the period of military service shall be
credited, except that after July 1, 1974, not more than five years' credit
for military service shall be granted hereunder to the extent required
under USERRA, but leaves of absence shall not be credited. Employees
who enter the military service from their employment after the em-
ployer's entry date and who have not completed one year of service at
the time of their entry into the military service, shall not become members
of the retirement system until they return to the employment of that
participating employer. In the case of such employee whose combined
public employment and military service does not equal one year at the
time of such employee's return to employment, the date of membership
shall be the first day of the payroll period coinciding with or following
the completion of one combined public employment and military year of
service. Such service shall be granted in accordance with this section;

    (c) a period of retirement under the system or a period of total dis-
ability, immediately followed by employment with a participating em-
ployer, shall not count as a break in continuous employment, except that
such periods while not employed shall not be credited as participating
service;

    (d) termination of employment, followed by employment with a par-
ticipating employer within five years after such termination, does not
constitute a break in continuous employment if such person has not with-
drawn such person's accumulated contribution. Such period while not
employed shall not be credited as participating service.

    (3) In determining the number of years of credited prior service or
participating service a fractional year of six months or more shall be con-
sidered as one year and a fractional year of less than six months shall be
disregarded.

    Sec. 34. K.S.A. 1997 Supp. 74-4916 is hereby amended to read as
follows: 74-4916. (1) Upon the death of a member before retirement, the
member's accumulated contributions shall be paid to the member's ben-
eficiary.

    (2) (a) In the event that a member dies before retirement as a result
of an accident arising out of and in the course of the member's actual
performance of duty in the employ of a participating employer inde-
pendent of all other causes and not as a result of a willfully negligent or
intentional act of the member, an accidental death benefit shall be pay-
able if: (A) A report of the accident, in a form acceptable to the board, is
filed in the office of the executive secretary of the board within 60 days
after the date of the accident causing such death and an application for
such benefit, in such form and manner as the board shall prescribe, is
filed in the office of the executive secretary of the board within two years
of the date of the accident, but the board may waive such time limits for
a reasonable period if in the judgment of the board the failure to meet
these limits was due to lack of knowledge or incapacity; and (B) the board
finds from such evidence as it may require, to be submitted in such form
and manner as it shall prescribe, that the natural and proximate cause of
death was the result of an accident arising out of and in the course of the
member's employment with a participating employer independent of all
other causes at a definite time and place. Such accidental death benefit
shall be a lump-sum amount of $50,000 and an annual amount of 1/2 of
the member's final average salary which shall accrue from the first day of
the month following the date of death and which shall be payable in
monthly installments or as the board may direct, but, after June 30, 1982,
in no case shall the accidental death benefit be less than $100 per month.
The accidental death benefit payments shall be paid to the surviving
spouse of such deceased member, such payments to continue so long as
such surviving spouse lives or if there is no surviving spouse, or in the
case the spouse dies before the youngest child of such deceased member
attains age 18 or before the youngest child of such deceased member
attains age 23 years, if such child is a full-time student as provided in
K.S.A. 74-49,117 and amendments thereto or if there are one or more
children of the member who are totally disabled and dependent on the
member or spouse, then to the child or children of such member under
age 18 or under age 23, if such child or children are full-time students as
provided in K.S.A. 74-49,117 and amendments thereto and to the child
or children of the member who are totally disabled and dependent on
the member or spouse, divided in such manner as the board in its dis-
cretion shall determine, to continue until the youngest surviving child
dies or attains age 18 or attains age 23 if such child is a full-time student
as provided in K.S.A. 79-49,117 and amendments thereto or, in the case
of the child or children who are totally disabled and dependent on the
member or spouse, until death or until no longer totally disabled, or if
there is no surviving spouse or child eligible for accidental death benefits
under this subsection (2) at the time of the member's death, then to the
parent or parents of such member who are dependent on such member,
to continue until the last such parent dies. All payments due under this
subsection (2) to a minor shall be made to a legally appointed conservator
of such minor or totally disabled child as provided in subsection (7) of
K.S.A. 74-4902 and amendments thereto. Commencing on the effective
date of this act, any surviving spouse, who was receiving benefits pursuant
to this section and who had such benefits terminated by reason of such
spouse's remarriage, shall be entitled to once again receive benefits pur-
suant to this section, except that such surviving spouse shall not be enti-
tled to recover any benefits not received after the termination of benefits
by reason of such surviving spouse's remarriage but before the effective
date of this act.

    (b) In construction of this section of the act there shall be no pre-
sumption that the death of the member was the result of an accident nor
shall there be a liberal interpretation of the law or evidence in favor of
the person claiming under this subsection (2). In the event of the death
of a member resulting from a heart, circulatory or respiratory condition
there must be clear and precise evidence that death was the result of an
accident independent of all other causes which arose out of and in the
course of the member's actual performance of duties in the employ of a
participating employer.

    (c) The annual benefit under this subsection (2) shall be reduced by
any workers compensation benefit payable. If the workers compensation
benefit is paid in a lump-sum, the amount of such reduction shall be
calculated on a monthly basis over the period of time for which workers
compensation benefits would have been payable had such lump-sum not
been paid. For any recipient already in receipt of such benefits on the
effective date of this act, no change in the original reduction for workers
compensation benefits shall be applicable to benefits paid prior to July 1,
1994. In the event that a member should die as a result of an accident as
described in this subsection (2), all elections or options previously made
by the deceased member shall become void and of no effect whatsoever
and the retirement system shall be liable only for the accidental death
benefit, refund of accumulated contributions as described in subsection
(1) and any insured death benefit that may be due. The benefit payable
under this subsection (2) shall be known and referred to as the ``accidental
death benefit.''

    (3) (a) Upon the application of a member, or the member's appoint-
ing authority acting for the member, a member who is in the employ of
a participating employer and becomes totally and permanently disabled
for duty in the employ of a participating employer, by reason of an acci-
dent which occurred prior to July 1, 1975, may be retired by the board
if, (A) the board finds the total and permanent disability to be the natural
and proximate result of an accident causing personal injury or disease
independent of all other causes and arising out of and in the course of
the member's actual performance of duties as an employee of a partici-
pating employer; and (B) a report of the accident, in a form acceptable
to the board is filed in the office of the executive secretary of the board
within 200 days after the date of the accident causing such injury; and
(C) such application for retirement under this provision, in such form and
manner as shall be prescribed by the board, is filed in the office of the
executive secretary of the board within two years of the date of the ac-
cident; and (D) after a medical examination of the member has been
made by or under the direction of a medical physician or physicians or
any other practitioner holding a valid license issued by the Kansas state
board of healing arts designated by the board and the medical physician
or physicians or any other practitioner holding a valid license issued by
the Kansas state board of healing arts report in writing to the board that
the member is physically or mentally totally disabled for duty in the em-
ploy of a participating employer and that such disability will probably be
permanent; and (E) the board finds that the member became perma-
nently and totally disabled on a date certain based on the evidence fur-
nished and the professional guidance obtained and that such disability
was not the result of a willfully negligent or intentional act of the member.
If the board shall so retire the applicant, the member shall receive an-
nually an accidental total disability benefit equal to 1/2 of the member's
final average salary which shall accrue from the first day of the month
following the date of such accidental total and permanent disability as
found by the board payable in monthly installments or as the board may
direct.

    (b) In construction of this subsection (3) there shall be no presump-
tion that the disability of the member was the result of an accident nor
shall there be a liberal interpretation of the law or evidence in favor of
the member claiming under this subsection (3). In the event of the dis-
ability of a member resulting from a heart, circulatory or respiratory con-
dition there must be clear and precise evidence that disability was the
result of an accident independent of all other causes which arose out of
and in the course of the member's actual performance of duties in the
employ of a participating employer.

    (c) A member will continue to receive such accidental total disability
benefit so long as the member is wholly and continuously disabled by
such injury and prevented thereby from engaging in any gainful occu-
pation or employment for which the member is reasonably qualified by
reason of education, training or experience. The accidental loss of both
hands by actual severance through or above the wrist joint, or the acci-
dental loss of both feet by actual severance through or above the ankle
joint or the entire and irrecoverable accidental loss of sight of both eyes,
or such severance of one hand and one foot, and such severance of one
hand or one foot and such loss of sight of one eye, shall be deemed
accidental total and permanent disability and accidental total disability
benefits shall be paid so long as the member lives.

    (d) Any retirant retired by reason of such accidental total and per-
manent disability who has been receiving benefits under the provisions
of this subsection (3) for a period of five years shall be deemed finally
retired and shall not be subject to further medical examinations, except
that if the board of trustees has reasonable grounds to question whether
the retirant remains totally and permanently disabled, a further medical
examination or examinations may be required. Refusal or neglect to sub-
mit to examination shall be sufficient cause for suspending or discontin-
uing the accidental total disability benefit. If the refusal or neglect con-
tinues for a period of one year, all of the member's rights with respect to
such accidental total disability benefit may be revoked by the board.

    (e) In the event that a retirant who is receiving an accidental total
disability benefit dies within five years after the date of the retirant's
retirement, an accidental death benefit shall then be payable as provided
in subsection (2) of this section.

    (f) A member who retires under the provisions of this subsection (3)
shall receive such benefits as provided in this subsection (3) in lieu of all
other retirement benefits provided under the retirement system except
that no member shall be entitled to receive any payments under this
subsection (3) for a period for which insured disability benefits are re-
ceived.

    (g) The value, as determined by the board upon recommendation of
the actuary, of any workmen's compensation benefits paid or payable to
the recipient of an accidental total disability benefit shall be deducted
from the amount payable under this section.

    (h) The benefit payable under subsection (3) of this section shall be
known and referred to as ``accidental total disability benefit.''

    (4) The payment of benefits as provided in this section is subject to
the provisions of section 83 and amendments thereto.

    Sec. 35. K.S.A. 1997 Supp. 74-4917a is hereby amended to read as
follows: 74-4917a. (1) To the extent required by the federal law internal
revenue code, the system, at the request of any member or member's
spouse who is entitled to withdraw such member's accumulated contri-
butions or to receive a lump-sum benefit or other nonperiodic distribu-
tion, shall pay the designated amount of the taxable portion of the accu-
mulated contributions to be withdrawn or lump-sum benefit or other
nonperiodic distribution to be received directly to any entity that: (a) Is
designated in writing by that person; (b) is qualified under the federal
law internal revenue code to accept an eligible rollover distribution from
a qualified plan; and (c) has agreed to accept the distribution. For pur-
poses of this section, ``system'' means the Kansas public employees re-
tirement system, Kansas police and firemen's retirement system and the
retirement system for judges.

    (2) The provisions of this section shall take effect on and after July
1, 1994 January 1, 1993.

    Sec. 36. K.S.A. 1997 Supp. 74-4918 is hereby amended to read as
follows: 74-4918. (1) A member may elect to have such member's retire-
ment benefit paid under one of the options provided in this section in
lieu of having it paid in the form stated in K.S.A. 74-4915 and amend-
ments thereto. Such election must be made before the date of actual
retirement. A specific person must be designated as joint annuitant at the
time of election of the joint and 1/2 to joint annuitant survivor option, the
joint and survivor option and the joint and 3/4 to joint annuitant survivor
option. Under no circumstances may an option be changed or canceled
nor the named joint annuitant changed after the date of actual retirement
of the member.

    (2) The amount of retirement benefit payable under an option shall
be based on the age of the member and, if applicable, the age of the joint
annuitant, and shall be such amount as to be the actuarial equivalent of
the retirement benefit otherwise payable under K.S.A. 74-4915 and
amendments thereto, as prescribed in subsection (3). In no case shall the
total amount of retirement benefit paid under any option provided in this
section be more than 100% of the retirement benefit which would have
been otherwise payable if no option had been elected under this section.

    (3) The following retirement options, which are subject to the pro-
visions of section 83 and amendments thereto, are available:

    (A) Joint and 1/2 to joint annuitant survivor. A reduced retirement
benefit is payable to the retirant during the retirant's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment benefit otherwise payable under K.S.A. 74-4915 and amendments
thereto and (B) the percentage equal to 91% minus .4% for each year by
which the age of the retirant's joint annuitant is less than the retirant's
age, computed to the nearest whole year, or plus .4% for each year by
which the age of the retirant's joint annuitant is more than the retirant's
age, computed to the nearest whole year, with 1/2 of that monthly amount
continued to the retirant's joint annuitant during such joint annuitant's
remaining lifetime, if any, after the death of the retirant. In the event that
the designated joint annuitant under this option predeceases the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under this option shall be adjusted automatically to the retirement benefit
which the retirant would have received if no option had been elected
under this section.

    (B) Joint and survivor. A reduced retirement benefit is payable to
the retirant during the retirant's lifetime in a monthly amount equal to
the product of (A) the monthly payment of the retirement benefit oth-
erwise payable under K.S.A. 74-4915 and amendments thereto and (B)
the percentage equal to 83% minus .6% for each year by which the age
of the retirant's joint annuitant is less than the retirant's age, computed
to the nearest whole year, or plus .6% for each year by which the age of
the retirant's joint annuitant is more than the retirant's age, computed to
the nearest whole year, with that amount continued to the joint annuitant
during the joint annuitant's remaining lifetime, if any, after the death of
the retirant. In the event that the designated joint annuitant under this
option predeceases the retirant, the amount of the retirement benefit
otherwise payable to the retirant under this option shall be adjusted au-
tomatically to the retirement benefit which the retirant would have re-
ceived if no option had been elected under this section.

    (C) Joint and 3/4 to joint annuitant survivor. A reduced retirement
benefit is payable to the retirant during the retirant's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment benefit otherwise payable under K.S.A. 74-4915 and amendments
thereto and (B) the percentage equal to 87% minus .5% for each year by
which the age of the retirant's joint annuitant is less than the retirant's
age, computed to the nearest whole year, or plus .5% for each year by
which the age of the retirant's joint annuitant is more than the retirant's
age, computed to the nearest whole year, with 3/4 of that monthly amount
continued to the retirant's joint annuitant during such joint annuitant's
remaining lifetime, if any, after the death of the retirant. In the event that
the designated joint annuitant under this option predeceases the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under this option shall be adjusted automatically to the retirement benefit
which the retirant would have received if no option had been elected
under this section.

    (D) Life with 5 years certain. A reduced retirement benefit is payable
to the retirant during the retirant's lifetime in a monthly amount equal
to 98% of the monthly payment of the retirement benefit otherwise pay-
able under K.S.A. 74-4915 and amendments thereto and if the retirant
dies within the five-year certain period, measured from the commence-
ment of retirement benefit payments, such payments shall be continued
to the retirant's beneficiary during the balance of the five-year certain
period.

    (E) Life with 10 years certain. A reduced retirement benefit is pay-
able to the retirant during the retirant's lifetime in a monthly amount
equal to 95% of the monthly payment of the retirement benefit otherwise
payable under K.S.A. 74-4915 and amendments thereto and if the retirant
dies within the ten-year certain period, measured from the commence-
ment of retirement benefit payments, such payments shall be continued
to the retirant's beneficiary during the balance of the ten-year certain
period.

    (F) Life with 15 years certain. A reduced retirement benefit is pay-
able to the retirant during the retirant's lifetime in a monthly amount
equal to 88% of the monthly payment of the retirement benefit otherwise
payable under K.S.A. 74-4915 and amendments thereto and if the retirant
dies within the fifteen-year certain period, measured from the com-
mencement of retirement benefit payments, such payments shall be con-
tinued to the retirant's beneficiary during the balance of the fifteen-year
certain period.

    (4) If a member, who is eligible to retire in accordance with the pro-
visions of K.S.A. 74-4914 and amendments thereto, dies without having
actually retired, the member's spouse, if the spouse is the sole beneficiary
for the member's accumulated contributions, may elect to receive ben-
efits under one of the options provided in this section in lieu of receiving
the member's accumulated contributions.

    (5) The benefits of subsection (4) shall be available in the case of
death within the first six months after the entry date of the member's
participating employer.

    (6) On and after January 1, 1991, if a member with 15 or more years
of credited service dies before attaining retirement age, the member's
spouse, if the spouse is the sole beneficiary for the member's accumulated
contributions, may elect to receive benefits under one of the options
provided in this section in lieu of receiving the member's accumulated
contributions. Payments under one of the options provided in this section
to the member's spouse if so elected, shall commence on the date that
the member would have attained retirement age.

    (7) Benefits payable to a joint annuitant shall accrue from the first
day of the month following the death of a member or retirant and, in the
case of the joint and 1/2 to joint annuitant survivor option, the joint and
survivor option and the joint and 3/4 to joint annuitant survivor option,
shall end on the last day of the month in which the joint annuitant dies.

    (8) The provisions of the law in effect on the retirement date of a
member under the system shall govern the retirement benefit payable to
the retirant and any joint annuitant, except, for retirement benefits pay-
able after July 1, 1993, for retirants who retired prior to July 1, 1982, in
the event that the designated joint annuitant under the option provided
in subsection (3)(A), (B) or (C), as applicable, predeceased the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under the option provided in subsection (3)(A), (B) or (C), as applicable,
shall be adjusted automatically to the retirement benefit which the retir-
ant would have received if no option had been elected under this section.

    (9) Upon the death of a joint annuitant who is receiving a retirement
benefit under the provisions of this section, there shall be paid to such
joint annuitant's beneficiary an amount equal to the excess, if any, of the
accumulated contributions of the retirant over the sum of all retirement
benefit payments made to such retirant and such joint annuitant. Such
joint annuitant shall designate a beneficiary by filing in the office of the
retirement system such designation at the time of death of the retirant.
If there is no named beneficiary of such joint annuitant living at the time
of death of such joint annuitant, any amount provided for by this section
shall be paid to, in order of preference as follows:

    (A) The joint annuitant's surviving spouse;

    (B) the joint annuitant's dependent child or children;

    (C) the joint annuitant's dependent parent or parents;

    (D) the joint annuitant's nondependent child or children;

    (E) the joint annuitant's nondependent parent or parents; or

    (F) the estate of the deceased joint annuitant.

    Sec. 37. K.S.A. 74-4919 is hereby amended to read as follows: 74-
4919. (1) Each participating employer, beginning with the first payroll for
services performed after the entry date, shall deduct from the compen-
sation of each member 4% of such member's compensation as employee
contributions. Such deductions shall be remitted quarterly, or as the
board may otherwise provide, to the executive secretary for deposit in the
Kansas public employees retirement fund. Such deductions shall be cred-
ited to the members' individual accounts and interest shall be added an-
nually to such accounts.

    (2) (a) Subject to the provisions of section 83 and amendments
thereto, each participating employer, pursuant to the provisions of section
414(h)(2) of the United States federal internal revenue code, shall pick
up and pay the contributions which would otherwise be payable by mem-
bers as prescribed in subsection (1) commencing with the third quarter
of 1984. The contributions so picked up shall be treated as employer
contributions for purposes of determining the amounts of federal income
taxes to withhold from the member's compensation.

    (b) Member contributions picked up by the employer shall be paid
from the same source of funds used for the payment of compensation to
a member. A deduction shall be made from each member's compensation
equal to the amount of the member's contributions picked up by the
employer, provided that such deduction shall not reduce the member's
compensation for purposes of computing benefits under the system.

    (c) Member contributions picked up by the employer shall be remit-
ted quarterly, or as the board may otherwise provide, to the executive
secretary for credit to the Kansas public employees retirement fund. Such
contributions shall be credited to a separate account within the member's
individual account so that amounts contributed by the member com-
mencing with the third quarter of 1984 may be distinguished from the
member contributions picked up by the employer. Interest shall be added
annually to members' individual accounts.

    Sec. 38. K.S.A. 1997 Supp. 74-4919a is hereby amended to read as
follows: 74-4919a. (1) An employee of a participating employer who be-
comes a member as provided in K.S.A. 74-4911 and amendments thereto,
after completion of one year of continuous employment as therein pro-
vided may purchase participating service credit for such year of employ-
ment by making application therefor. Such application and payment may
be made at any time after the employee becomes a member and continues
to be employed by a participating employer. Any member of the system
who has not retired may purchase, subject to the provisions of section 83
and amendments thereto, such service credit by paying the then present
value of the retirement benefits based on such service by means of a
single lump-sum payment in the amount determined by the actuary using
the member's attained age and the actuarial assumptions and tables cur-
rently in use by this retirement system. If an employee was employed
before the participating employer's entry date and did not become a
member until the first day of the month or the first day of the first payroll
period, whichever is applicable, coinciding with or following the comple-
tion of one year continuous employment, the member may purchase,
subject to the provisions of section 83 and amendments thereto, partici-
pating service credit for the period from the participating employer's en-
try date until such member became a member by paying to the system
the then present value of the retirement benefits based on such service
by means of a single lump-sum payment in the amount determined by
the actuary using the member's attained age and the actuarial assumptions
and tables currently in use by this retirement system.

    If an employee was employed for a partial year after the participating
employer's entry date and did not become a member at that time, but
became a member at a later date, the member may purchase, subject to
the provisions of section 83 and amendments thereto, participating service
credit for such partial year of employment by paying the then present
value of the retirement benefits based on such service by means of a
single lump-sum payment in the amount determined by the actuary using
the member's attained age and the actuarial assumptions and tables cur-
rently in use by this retirement system.

    (2) Any employee of the state of Kansas who was receiving or was
eligible for assistance by the state board of regents in the purchase of a
retirement annuity under K.S.A. 74-4925 and amendments thereto, and
who became ineligible for such assistance prior to the effective date of
this act because such employee's position was reclassified to a position in
the classified service under the Kansas civil service act, or who became
ineligible for such assistance because such person accepted and trans-
ferred to a position in the classified service under the Kansas civil service
act, and who becomes a member of the system on the first day of the
payroll period coinciding with or following the effective date of this act
in accordance with subsection (5) of K.S.A. 74-4911 and amendments
thereto, may purchase, subject to the provisions of section 83 and amend-
ments thereto, participating service credit for the period of employment
from the effective date of such reclassification or transfer to the date of
such employee's membership in the system. Such employee may pur-
chase such participating service credit by making application therefor and
paying to the system a lump-sum amount equivalent to 4% of the com-
pensation paid to such member for personal services during such period
by the state of Kansas or as provided in subsection (3). Such application
and payment may be made at any time after the employee becomes a
member and continues to be employed by a participating employer.

    (3) Except as otherwise provided in this subsection, any member of
the retirement system may purchase, subject to the provisions of section
83 and amendments thereto, participating service credit for employment
service as described in this section, if first commenced prior to January
1, 1996, by electing to effect such purchase by means of having employee
contributions as provided in K.S.A. 74-4919 and amendments thereto
deducted from such member's compensation at a percentage rate equal
to two times or three times the employee's rate of contribution as pro-
vided in K.S.A. 74-4919 and amendments thereto for such periods of
service, in lieu of a lump-sum amount as provided in this section. Such
deductions shall commence at the beginning of the quarter following such
election and shall remain in effect until all quarters of such service have
been purchased. Subject to the provisions of section 83 and amendments
thereto, any person may make any such purchase as described in this
section, if first commenced in calendar year 1996 or thereafter, at an
additional rate of contribution, in addition to the employee's rate of con-
tribution as provided in K.S.A. 74-4919 and amendments thereto, based
upon the member's attained age at the time of purchase and using ac-
tuarial assumptions and tables in use by the retirement system at such
time of purchase, for such periods of service, in lieu of a lump-sum
amount as provided in this section. Such additional rate of contribution
shall commence at the beginning of the quarter following such election
and shall remain in effect until all quarters of such service have been
purchased.

    Sec. 39. K.S.A. 74-4919b is hereby amended to read as follows: 74-
4919b. (a) Any employee of a participating employer who becomes a
member of the system as provided in K.S.A. 74-4911 or 74-4935 and
amendments thereto, who has previously been a member of the system
and who has forfeited participating and prior service credit by reason of
termination of employment with a participating employer and withdrawal
of such member's accumulated contributions, may have all or a part of
such forfeited service reinstated as provided in K.S.A. 74-4901 through
74-4930 and amendments thereto.

    (b) Any member, if not actively employed, who has previously been
a member of the system and who has forfeited participating and prior
service credit by reason of termination of employment with a participating
employer and withdrawal of such member's accumulated contributions
may have all or a part of such forfeited service reinstated as provided in
K.S.A. 74-4901 through 74-4930 and amendments thereto. Subject to the
provisions of section 83 and amendments thereto, such member may pur-
chase such service credit by means of a single lump-sum payment. The
lump-sum payment shall be an amount determined by the actuary using
the member's annual rate of compensation when last participating, the
actuarial assumptions and tables currently in use by the retirement system
and the member's attained age. No participating employer shall pay all
or any part of the cost of any additional participating service credit to be
purchased by means of a lump-sum payment by a member under the
provisions of K.S.A. 74-4901 through 74-4930 and amendments thereto.
The provisions of this subsection shall not apply to repurchase of previ-
ously forfeited service credit as provided in subsection (b) of K.S.A. 74-
4911b and amendments thereto.

    Sec. 40. K.S.A. 1997 Supp. 74-4919c is hereby amended to read as
follows: 74-4919c. Except as otherwise provided in this section, any such
member having previously lost credit for periods of participating service,
because of termination of employment and withdrawal of contributions,
if first commenced prior to January 1, 1996, may elect in writing to such
member's participating employer and the retirement system to have
member contributions deducted from such member's compensation at a
percentage rate equal to two times or three times the employee's rate of
contribution as provided in K.S.A. 74-4919 and amendments thereto for
such periods of service. Such election may be made at any time prior to
retirement and the attainment of age 70 and shall commence on the first
day of the payroll period for which compensation shall be paid in the
employer's quarterly reporting period coinciding with or following such
election. Any member making such an election shall receive credit for
one additional quarter of participating service credit for each quarter
during which the contribution rate at a percentage rate equal to two times
the employee's rate of contribution as provided in K.S.A. 74-4919 and
amendments thereto for such periods of service, is in effect and two
additional quarters of participating service credit for each quarter during
which the contribution rate at a percentage rate equal to three times the
employee's rate of contribution as provided in K.S.A. 74-4919 and amend-
ments thereto, is in effect. Subject to the provisions of section 83 and
amendments thereto, any person may make any such purchase as de-
scribed in this section, if first commenced in calendar year 1996 or there-
after, at an additional rate of contribution, in addition to the employee's
rate of contribution as provided in K.S.A. 74-4919 and amendments
thereto, based upon the member's attained age at the time of purchase
and using actuarial assumptions and tables in use by the retirement sys-
tem at such time of purchase, for such periods of service, in lieu of a
lump-sum amount as provided in this section. Such additional rate of
contribution shall commence at the beginning of the quarter following
such election and shall remain in effect until all quarters of such service
have been purchased. In no case shall the additional credit so granted be
greater than the total participating service credit forfeited on the earlier
termination of employment and withdrawal of contributions. Such con-
tribution rates shall not remain in effect longer than the period for which
additional participating service credit may be granted.

    Sec. 41. K.S.A. 1997 Supp. 74-4919d is hereby amended to read as
follows: 74-4919d. (1) Any such member, having previously lost credit for
periods of prior service because of termination of employment and with-
drawal of contributions, and who has elected to contribute at a percentage
rate equal to two times or three times the employee's rate of contribution
as provided in K.S.A. 74-4919 and amendments thereto for such periods
of service or at an additional rate of contribution, in addition to the em-
ployee's rate of contribution as provided in K.S.A. 74-4919 and amend-
ments thereto, may receive up to three years of prior service credit for
each year of participating service credit repurchased, but in no event
more than the total of such previously forfeited prior service credit. Any
member who repurchases all of such member's previously forfeited par-
ticipating service credit shall also receive all of such member's previously
forfeited prior service credit.

    (2) If such member, previously a member of the state school retire-
ment system and having contributions on deposit with such system which
were transferred to such member's account with this system on January
1, 1971, and prior service credit granted therefor with this system in
accordance with K.S.A. 74-4936 and amendments thereto, has forfeited
prior service credit with this system by reason of termination of employ-
ment and withdrawal of such transferred contributions, subject to the
provisions of section 83 and amendments thereto, such member may re-
instate such prior service credit only upon repaying in a lump-sum the
full amount of such transferred contributions withdrawn plus interest at
a rate specified by the board at the time of electing to repurchase pre-
viously forfeited participating credit as provided in K.S.A. 74-4919c or
74-4919f and amendments thereto.

    Sec. 42. K.S.A. 74-4919f is hereby amended to read as follows: 74-
4919f. In the event that a member, who elects to repurchase previously
forfeited service credit, also elects to effect such repurchase by means of
a single lump-sum payment, he such member may do so, subject to the
provisions of section 83 and amendments thereto, by paying the amount
determined by the actuary using the member's then current annual rate
of compensation and the actuarial assumptions and tables then currently
in use by the retirement system. Any member who elects repurchase by
a single lump-sum payment shall make such payment in lieu of the in-
creased amount of the employee's contribution rate otherwise provided
for in this act.

    Sec. 43. K.S.A. 1997 Supp. 74-4919g is hereby amended to read as
follows: 74-4919g. (1) Any member of this system who was previously a
member of the Kansas school retirement system and who forfeited service
credit under that system prior to January 1, 1971, by reason of termination
of employment in school service and withdrew such member's contri-
butions to that system, may elect to purchase service credit for such pre-
viously forfeited service credit under the Kansas school retirement sys-
tem, if such service has not been credited under the Kansas public
employees' retirement system. Any member of the system who has not
retired may purchase, subject to the provisions of section 83 and amend-
ments thereto, such service credit by paying the then present value of the
retirement benefits based on such service by means of a single lump-sum
payment in the amount determined by the actuary using the member's
attained age, a prior service annual salary as defined in subsection (3) of
K.S.A. 74-4938 and the actuarial assumptions and tables currently in use
by this retirement system.

    (2) Any member of this system who was previously a member of the
Wichita employees' retirement plan who was transferred to the employ
of Sedgwick county, as a direct consequence of a transfer of function
between the city of Wichita and Sedgwick county and who forfeited serv-
ice credit under that system, by reason of termination of employment and
withdrew such member's contributions to that system, may elect to pur-
chase service credit for such previously forfeited service credit, if such
service has not been credited under the Kansas public employees' retire-
ment system. Any member of the system who has not retired may pur-
chase, subject to the provisions of section 83 and amendments thereto,
such service credit by paying the then present value of the retirement
benefits based on such service by means of a single lump-sum payment
in the amount determined by the actuary using the member's attained
age and the actuarial assumptions and tables currently in use by this re-
tirement system. Any member may make such purchase as described in
this section, subject to the provisions of section 83 and amendments
thereto, if first commenced in calendar year 1996 or thereafter, at an
additional rate of contribution, in addition to the employee's rate of con-
tribution as provided in K.S.A. 74-4919 and amendments thereto, based
upon the member's attained age at the time of purchase and using ac-
tuarial assumptions and tables in use by the retirement system at such
time of purchase, for such periods of service, in lieu of a lump-sum
amount as provided in this section. Such additional rate of contribution
shall commence at the beginning of the quarter following such election
and shall remain in effect until all quarters of such service have been
purchased.

    Sec. 44. K.S.A. 1997 Supp. 74-4919h is hereby amended to read as
follows: 74-4919h. (1) In addition to any military service credited under
the provisions of K.S.A. 74-4913 or 74-4936 and amendments thereto, or
in the event that an active contributing member does not qualify for credit
for military service as defined in subsection (22) of K.S.A. 74-4902 and
amendments thereto, such member may purchase, subject to the provi-
sions of section 83 and amendments thereto, participating credit for per-
iods of active service in the armed forces of the United States or in the
United States public health service and for periods of service required to
fulfill the requirements of section 651 of title 10, United States code,
which are not otherwise creditable, which when added to any creditable
military service do not exceed six years. Except as provided in subsection
(4)(a) for such purchase of participating credit for such periods of such
military service which is the basis for military pension rights, such mem-
ber shall be entitled to purchase one quarter of participating service credit
for each year of service required to fulfill the requirements of section 651
of title 10, United States code. Except as otherwise provided in this sec-
tion, such purchase shall be effected by the member submitting proof of
such service acceptable to the board and, if first commenced prior to
January 1, 1996, electing in writing to have employee contributions as
provided in K.S.A. 74-4919 and amendments thereto deducted from such
member's compensation at a percentage rate equal to two times or three
times the employee's rate of contribution as provided in K.S.A. 74-4919
and amendments thereto for such periods of service. Such deductions
shall commence at the beginning of the quarter following such election
and shall remain in effect until all of the full quarters of such service have
been purchased. Any person may make any such purchase as described
in this section, subject to the provisions of section 83 and amendments
thereto, if first commenced in calendar year 1996 or thereafter, at an
additional rate of contribution, in addition to the employee's rate of con-
tribution as provided in K.S.A. 74-4919 and amendments thereto, based
upon the member's attained age at the time of purchase and using ac-
tuarial assumptions and tables in use by the retirement system at such
time of purchase, for such periods of service, in lieu of a lump-sum
amount as provided in this section. Such additional rate of contribution
shall commence at the beginning of the quarter following such election
and shall remain in effect until all quarters of such service have been
purchased.

    (2) (a) Such purchase of participating service credit must be com-
pleted prior to such member's retirement.

    (b) For members purchasing such participating service credit on or
after July 1, 1993, whose purchase is completed within five years before
such member's retirement, subject to the provisions of section 83 and
amendments thereto, such member shall pay the actuarially determined
amount by means of a single lump-sum payment or equal annual pay-
ments which shall be completed prior to retirement. The lump-sum pay-
ment or annual payments shall be determined by the system's actuary by
using the member's current annual salary at the time, actuarial assump-
tions and tables currently in use by the system and the member's attained
age. No participating employer shall pay all or any part of the cost of
service credit purchased by a member under this subsection. Any mem-
ber who purchases such participating service credit and who does not
make the lump-sum payment or annual payments as required by this
subsection shall have any previously credited service under this section
voided and such member shall be refunded such member's payments
previously made for such purchase plus interest. The provisions of this
subsection shall not apply to any member who is employed by an insti-
tution that is closed or abolished or otherwise ceases operations or that
is scheduled for such closure, abolition or cessation of operations and has
a budget reduction imposed that is associated with such closure, abolition
or cessation of operations, and who is laid off from employment with such
institution for the reason of such closure, abolition or cessation. As used
in this subsection, ``institution'' means Topeka state hospital or Winfield
state hospital and training center; and ``laid off'' means, in the case of a
state officer or employee in the classified service under the Kansas civil
service act, being laid off under K.S.A. 75-2948 and amendments thereto
and in the case of a state officer or employee in the unclassified service
under the Kansas civil service act, being terminated from employment
with the state agency by the appointing authority, except that ``laid off''
shall not include any separation from employment pursuant to budget
reduction or expenditure authority reduction and reduction of F.T.E.
positions under K.S.A. 1996 Supp. 75-6801 and amendments thereto.

    (3) In the event such member has elected to purchase participating
service credit as provided in K.S.A. 74-4919a to 74-4919e, inclusive, and
any amendments thereto, the increased employee contributions and pur-
chase of participating service credit provided herein shall not commence
until after the purchase of participating service credit under K.S.A. 74-
4919a to 74-4919e, inclusive, and any amendments thereto, has been
completed. If a member terminates employment before completing the
purchase of all participating service credit as such member may be enti-
tled to, such member shall only receive such credit for those full quarters
as the percentage rate equal to two times or three times the employee's
rate of contribution as provided in K.S.A. 74-4919 and amendments
thereto or those full quarters as the additional rate of contribution, in
addition to the employee's rate of contribution as provided in K.S.A.
74-4919 and amendments thereto has been deducted from such mem-
ber's compensation.

    (4) (a) Any member of the system who has not yet retired may pur-
chase participating service credit for military service as described in this
section which is the basis for military pension rights at an additional rate
of contribution in addition to the employee's rate of contribution as pro-
vided in K.S.A. 74-4919 and amendments thereto, based upon the mem-
ber's attained age at the time of purchase and using actuarial assumptions
and tables in use by the retirement system at the time of such purchase.
Such additional rate of contribution shall commence at the beginning of
the quarter following such election and shall remain in effect until all
quarters of such service have been purchased. Any such member may
purchase, subject to the provisions of section 83 and amendments thereto,
participating service credit for military service as described in this section
by electing to effect such purchase by means of a single lump-sum pay-
ment in lieu of employee contributions as provided in this section. The
lump-sum payment shall be an amount determined by the actuary using
the member's then current annual rate of compensation, or if not actively
employed, the member's annual rate of compensation when last partici-
pating, the actuarial assumptions and tables currently in use by the re-
tirement system and the member's attained age. No participating em-
ployer shall pay all or any part of the cost of any additional participating
service credit to be purchased by means of a lump-sum payment by a
member under this section.

    (b) Any member of the retirement system who has not retired may
purchase, subject to the provisions of section 83 and amendments thereto,
participating service credit for military service as described in this section
which is not the basis for military pension rights by electing to effect such
purchase by means of a single lump-sum payment in lieu of employee
contributions as provided in this section. The lump-sum payment shall
be an amount determined by the actuary using the member's then current
annual rate of compensation, or if not actively employed, the member's
annual rate of compensation when last participating, the actuarial as-
sumptions and tables currently in use by the retirement system and the
member's attained age. No participating employer shall pay all or any part
of the cost of any additional participating service credit to be purchased
by means of a lump-sum payment by a member under this section.

    Sec. 45. K.S.A. 74-4919i is hereby amended to read as follows: 74-
4919i. Any person who becomes a member of the Kansas public employ-
ees retirement system pursuant to subsection (14) of K.S.A. 74-4902 and
amendments thereto, subsection (4) of K.S.A. 74-4932 and amendments
thereto, K.S.A. 74-4911c and amendments thereto or sections 18 and 19,
K.S.A. 74-4911d or K.S.A. 74-4919k and amendments thereto, may elect
to purchase additional benefits for any service performed during the pe-
riod that such person was barred from membership in the Kansas public
employees retirement system, except that no person shall purchase ad-
ditional benefits for any service which is the basis or will become the basis
for retirement credit or benefits under a retirement annuity under the
provisions of K.S.A. 74-4925 and amendments thereto. As used in this
section, ``annual compensation'' means the rate of annual compensation
being paid to such member by the participating employer on the date of
application to purchase additional benefits. Such member may purchase
additional benefits by making application therefor at least three years
prior to date of retirement and, subject to the provisions of section 83 and
amendments thereto, by making a single lump-sum payment in an amount
equal to the then present value of the benefits being purchased as deter-
mined by the actuary using the member's attained age, annual compen-
sation at the time of purchase and the actuarial assumptions and tables
then in use by the system. The lump-sum payment shall be made im-
mediately upon being notified of the amount due. No participating em-
ployer shall pay all or any part of the cost of any additional benefits au-
thorized to be purchased by a member under this section. The benefit
for each such year of service shall be equal to 1% of the annual compen-
sation at the time the member purchases such additional benefits.

    Sec. 46. K.S.A. 1997 Supp. 74-4919j is hereby amended to read as
follows: 74-4919j. (1) In addition to any service credited under the pro-
visions of K.S.A. 74-4913 or 74-4936 and amendments thereto, in the
event that a member of the Kansas public employees retirement system
does not qualify for credit for service as an elected official with a partic-
ipating employer, such member may purchase, subject to the provisions
of section 83 and amendments thereto, participating credit for periods of
such service. Except as otherwise provided in this section, such member
may purchase such service credit by submitting proof of such service
acceptable to the board of trustees and, if first commenced prior to Jan-
uary 1, 1996, electing in writing to have employee contributions deducted
as provided in K.S.A. 74-4919 and amendments thereto from such mem-
ber's compensation at a percentage rate equal to two times or three times
the employee's rate of contribution as provided in K.S.A. 74-4919 and
amendments thereto for such periods of service. Such deductions shall
commence at the beginning of the quarter following such election and
shall remain in effect until all of the full quarters of such service have
been purchased. Subject to the provisions of section 83 and amendments
thereto, any person may make any such purchase as described in this
section, if first commenced in calendar year 1996 or thereafter, at an
additional rate of contribution, in addition to the employee's rate of con-
tribution as provided in K.S.A. 74-4919 and amendments thereto, based
upon the member's attained age at the time of purchase and using ac-
tuarial assumptions and tables in use by the retirement system at such
time of purchase, for such periods of service, in lieu of a lump-sum
amount as provided in this section. Such additional rate of contribution
shall commence at the beginning of the quarter following such election
and shall remain in effect until all quarters of such service have been
purchased.

    (2) In the event such member has elected to purchase participating
service credit as provided in K.S.A. 74-4919a to 74-4919e, inclusive, and
amendments thereto, the increased employee contributions and purchase
of participating service credit provided herein shall not commence until
after the purchase of participating service credit under K.S.A. 74-4919a
to 74-4919e, inclusive, and amendments thereto, has been completed. If
a member terminates employment before completing the purchase of all
participating service credit as such member may be entitled to purchase,
such member shall only receive such credit for those full quarters as the
percentage rate equal to two times or three times the employee's rate of
contribution as provided in K.S.A. 74-4919 and amendments thereto or
those full quarters as the additional rate of contribution, in addition to
the employee's rate of contribution as provided in K.S.A. 74-4919 and
amendments thereto for such periods of service has been deducted from
such member's compensation.

    (3) Subject to the provisions of section 83 and amendments thereto,
any member of the Kansas public employees retirement system who does
not qualify for credit for service as an elected official with a participating
employer and who has not retired may purchase participating service
credit for such service as an elected official with a participating employer
by making a single lump-sum payment in lieu of employee contributions
as provided in this section. The lump-sum payment shall be in an amount
determined by the actuary using (A) the member's then current annual
rate of compensation, or if not actively employed, the member's annual
rate of compensation when last participating, (B) the actuarial assump-
tions and tables currently in use by the system and (C) the member's
attained age. No participating employer shall pay all or any part of the
cost of any additional participating service credit to be purchased by
means of a lump-sum payment by a member under this subsection.

    (4) Commencing on January 1, 1988, and ending on June 30, 1988,
any member of the Kansas public employees retirement system who does
not qualify for credit for service as an elected official with a participating
employer and who has not retired may purchase participating service
credit for such service as an elected official with a participating employer
by making a single lump-sum amount equivalent to 4% of the compen-
sation paid to such member for service as an elected official during such
period. No participating employer shall pay all or any part of the cost of
any additional participating service credit to be purchased by means of a
lump-sum amount by a member under this subsection.

    Sec. 47. K.S.A. 74-4919l is hereby amended to read as follows: 74-
4919l. Any member of the Kansas public employees retirement system
who was previously a member of the retirement system for judges or the
Kansas police and firemen's retirement system and who forfeited service
credit under either of those systems by reason of termination of employ-
ment and withdrawal of their contributions to that system, may elect to
purchase, subject to the provisions of section 83 and amendments thereto,
service credit for the previously forfeited service credit by means of a
single lump-sum payment and such service shall be recredited to that
system. The amount of the lump-sum payment shall be determined by
the actuary using the member's then current annual rate of compensation
and the actuarial assumptions and tables then currently in use by that
retirement system.

    Sec. 48. K.S.A. 1997 Supp. 74-4919m is hereby amended to read as
follows: 74-4919m. (1) Except as otherwise provided, any active contrib-
uting member of the retirement system who at one time had the state
board of regents assist such member in the purchase of retirement an-
nuities as provided in K.S.A. 74-4925 and amendments thereto and who
withdrew such member's accumulated contributions upon the termina-
tion of such employment as provided in K.S.A. 74-4925 and amendments
thereto may purchase such participating service credit for such service.
Such member may purchase, subject to the provisions of section 83 and
amendments thereto such service credit by submitting proof of such serv-
ice acceptable to the board of trustees and electing in writing to have
employee contributions deducted as provided in K.S.A. 74-4919 and
amendments thereto from such member's compensation at an additional
rate of contribution, in addition to the employee's rate of contribution as
provided in K.S.A. 74-4919 and amendments thereto, based upon the
member's attained age at the time of purchase and using actuarial as-
sumptions and tables in use by the retirement system at such time of
purchase for such periods of service. Such additional rate of contribution
shall commence at the beginning of the quarter following such election
and shall remain in effect until all of the full quarters of such service have
been purchased.

    (2) Any member of the Kansas public employees retirement system
who has not retired may purchase, subject to the provisions of section 83
and amendments thereto participating service credit for such service as
described in this section with a participating employer by making a single
lump-sum payment in lieu of employee contributions as provided in this
section. The lump-sum payment shall be in an amount determined by the
actuary using (a) the member's then current annual rate of compensation,
or if not actively employed, the member's annual rate of compensation
when last participating, (b) the actuarial assumptions and tables currently
in use by the system and (c) the member's attained age. No participating
employer shall pay all or any part of the cost of any additional participating
service credit to be purchased by means of a lump-sum payment by a
member under this subsection.

    Sec. 49. K.S.A. 1997 Supp. 74-4919n is hereby amended to read as
follows: 74-4919n. Any employee of a participating employer who is a
member of the Kansas public employees retirement system, who was
previously employed in another state in nonfederal governmental em-
ployment and which service otherwise meets the requirements of an em-
ployee as prescribed in subsection (14) of K.S.A. 74-4902 or subsection
(4) of K.S.A. 74-4932 and amendments thereto, may elect to purchase,
subject to the provisions of section 83 and amendments thereto, prior
service for such out-of-state nonfederal governmental employment. The
benefit for each such year of employment shall be equal to 1% of the
final average salary of any such member. Such member may purchase
such prior service by making application therefor prior to date of retire-
ment at an additional rate of contribution in addition to the employee's
rate of contribution as provided in K.S.A. 74-4919 and amendments
thereto, based upon the member's attained age at the time of purchase
and using actuarial assumptions and tables in use by the retirement sys-
tem at the time of such purchase. Such additional rate of contribution
shall commence at the beginning of the quarter following such election
and shall remain in effect until all quarters of such service have been
purchased. Subject to the provisions of section 83 and amendments
thereto, any such member may purchase such prior service as described
in this section by electing to effect such purchase by means of a single
lump-sum payment in lieu of employee contributions as provided in this
section in an amount equal to the then present value of the benefits being
purchased as determined by the actuary using the member's attained age,
annual compensation at the time of purchase and the actuarial assump-
tions and tables then in use by this system. The lump-sum payment shall
be made immediately upon being notified of the amount due. No partic-
ipating employer shall pay the cost, or any part thereof, of any prior
service authorized to be purchased by a member under this section.

    Sec. 50. K.S.A. 1997 Supp. 74-4919o is hereby amended to read as
follows: 74-4919o. (1) Notwithstanding the provisions of K.S.A. 74-4913
and amendments thereto and except as provided in subsection (3), any
member of the Kansas public employees retirement system who was pre-
viously employed by an employer who maintained its own police and fire
pension plan as a city of the first or second class and who withdrew their
accumulated contributions may purchase, subject to the provisions of sec-
tion 83 and amendments thereto, participating service credit for periods
of such service prior to retirement. Such member may purchase such
service credit by submitting proof of such service acceptable to the board
of trustees and electing in writing to have employee contributions de-
ducted as provided in K.S.A. 74-4919 and amendments thereto from such
member's compensation at an additional rate of contribution, in addition
to the employee's rate of contribution as provided in K.S.A. 74-4919 and
amendments thereto, based upon the member's attained age at the time
of purchase and using actuarial assumptions and tables in use by the
retirement system at such time of purchase for such periods of service.
Such additional rate of contribution shall commence at the beginning of
the quarter following such election and shall remain in effect until all of
the full quarters of such service have been purchased.

    (2) Any member of the Kansas public employees retirement system
who has not retired may purchase, subject to the provisions of section 83
and amendments thereto, participating service credit for such service as
described in this section with a participating employer by making a single
lump-sum payment in lieu of employee contributions as provided in this
section. The lump-sum payment shall be in an amount determined by the
actuary using (a) the member's then current annual rate of compensation,
or if not actively employed, the member's annual rate of compensation
when last participating, (b) the actuarial assumptions and tables currently
in use by the system and (c) the member's attained age. No participating
employer shall pay all or any part of the cost of any additional participating
service credit to be purchased by means of a lump-sum payment by a
member under this subsection.

    (3) No member may purchase such participating service credit for
any service that is subject to a retirement under any other pension plan
authorized pursuant to the laws of the state of Kansas.

    Sec. 51. K.S.A. 1997 Supp. 74-4922 is hereby amended to read as
follows: 74-4922. The executive secretary shall maintain such records as
are necessary to determine the following reserves of the fund.

    (a) Member's accumulated contribution reserve. This reserve shall be
maintained within the fund for each member and for each member having
a vested benefit. Each such reserve account shall be credited with the
employee's contributions upon receipt thereof and shall be credited on
June 30 each year with interest: (1) At the actuarial assumption rate
adopted by the board on the balance in the employee's account as of the
preceding December 31 for those who first became members prior to
July 1, 1993; and (2) 4% for those who first became members on and
after July 1, 1993. For the purposes of crediting interest upon accumu-
lated contributions, the term member shall include the beneficiary of a
member during the twelve-month period following the death of a mem-
ber and the beneficiary of a member pursuant to subsection (6) of K.S.A.
74-4918 and amendments thereto during any period commencing on the
date of death of such member and ending on the date that the member
would have attained retirement age. Refunds of employee's accumulated
contributions prior to retirement shall be made from this reserve. Upon
commencement of payments of the retirement benefit, the amount in
this reserve account for the retiring member or members, shall be trans-
ferred to the retirement benefit payment reserve.

    (b) Retirement benefit accumulation reserve. This reserve within the
fund shall be credited with the portion of employer contributions for
retirement benefits (both for prior service and for participating service)
and with income of the fund not otherwise directed by law to a different
reserve. The board shall credit interest to all other reserves and reserve
accounts as provided by law at rates determined by the board. Interest
so credited shall be transferred from the retirement benefit accumulation
reserve. Separate reserve accounts shall not be maintained for each par-
ticipating employer joining the system on the first entry date. The board
shall determine whether or not separate reserve accounts shall be main-
tained for each participating employer joining the system after the first
entry date.

    (c) Retirement benefit payment reserve. (i) This reserve within the
fund will be credited with the amount transferred from the member's
accumulated contributions reserve and from the retirement benefit ac-
cumulation reserve and with interest allocated to this reserve at the rate
determined each year by the board. This reserve shall be charged with
payments of retirement benefits including payments upon death of the
excess of member's accumulated contributions over retirement benefit
payments paid to date of death. Annually, upon receipt of the actuarial
valuation as of the end of the previous fiscal year the board shall cause
certain adjustments to be made which shall be made prior to the end of
the fiscal year immediately following the fiscal year for which the actuarial
valuation is applicable.

    (ii) The amount of these adjustments shall be the difference between
the amount required by the current actuarial valuation and the amount
required by the previous year's actuarial valuation plus amounts trans-
ferred to this reserve less amounts paid out of this reserve during the
fiscal year to be adjusted. Such adjustments required to maintain this
reserve on an actuarial reserve basis as of June 30 of the previous fiscal
year shall be accomplished by transfers to or from, as applicable, the
retirement benefit accumulation reserve.

    (d) Expense reserve. This reserve within the fund shall be credited
with interest allocated to this reserve at the rate determined each year by
the board. It shall be charged with payments of all expenses incurred in
connection with the administration of the system.

    (e) Group insurance reserve. This reserve shall be credited with the
employer contributions required to pay the cost for the plan of death and
long-term disability benefits under K.S.A. 74-4927, and amendments
thereto, with any dividend or retrospective rate credit allowed by any
insurance company or companies contracted with by the board for such
plan, and with interest allocated to this reserve at the rate determined
each year by the board. This reserve shall be charged with the amount of
the payments required to provide such plan of death and long-term dis-
ability benefits.

    Sec. 52. K.S.A. 1997 Supp. 74-4923 is hereby amended to read as
follows: 74-4923. (a) No alteration, amendment or repeal of this act shall
affect the then existing rights of members and beneficiaries but shall be
effective only as to rights which would otherwise accrue under this act as
a result of services rendered by an employee after the alteration, amend-
ment or repeal. This subsection shall not apply to any alteration or amend-
ment of this act which provides greater benefits to members or benefi-
ciaries, but any increase of benefits shall only be applicable to benefits
payable on the first day of the month coinciding with or following the
effective date of the alteration or amendment.

    (b) Any annuity, benefits, funds, property or rights created by, or
accruing to any person under the provisions of K.S.A. 74-4901 et seq. or
74-4951 et seq., and amendments thereto, shall be exempt from any tax
of the state of Kansas or any political subdivision or taxing body of the
state; shall not be subject to execution, garnishment or attachment, or,
except as otherwise provided, any other process or claim whatsoever; and
shall be unassignable, except that within 30 days after the death of a
retirant the lump-sum death benefit payable to a retirant's beneficiary
pursuant to the provisions of K.S.A. 74-4989 and amendments thereto
may be assignable to a funeral establishment providing funeral services
to the retirant by the beneficiary of such retirant. Any annuity or benefit
or accumulated contributions due and owing to any person under the
provisions of K.S.A. 74-4901 et seq. or 74-4951 et seq. and amendments
thereto are subject to claims of an alternate payee under a qualified do-
mestic relations order. As used in this subsection, the terms ``alternate
payee'' and ``qualified domestic relations order'' shall have the meaning
ascribed to them in section 414(p) of the United States federal internal
revenue code of 1954 as amended. The provisions of this act shall apply
to any qualified domestic relations order which is in effect on or after July
1, 1994. The Kansas public employees retirement system shall not be a
party to any action under article 16 of chapter 60 of the Kansas Statutes
Annotated, and amendments thereto, but is subject to orders from such
actions issued by the district court of the county where such action was
filed and may also accept orders which it deems to be qualified under
this subsection from courts having jurisdiction of such actions outside the
state of Kansas. Such orders from such actions shall specify either a spe-
cific amount or specific percentage of the amount of the pension or ben-
efit or any accumulated contributions due and owing from the system to
be distributed by the system pursuant to this act.

    (c) In any case where a state agency is owed a debt or where a par-
ticipating employer under the Kansas public employees retirement sys-
tem or under the Kansas police and firemen's retirement system has been
required to pay and has paid an arrearage obligation of the amount of
contributions of a member which were not paid at the time required and
where the employment of the member by the state agency or participating
employer has been terminated and the member is eligible to withdraw
accumulated contributions in accordance with K.S.A. 74-4917 and 74-
4963, and amendments thereto, the state agency or participating em-
ployer shall be paid from the member's account in the fund an amount
equal to the debt or the amount of contributions of the member paid by
the participating employer pursuant to an arrearage obligation, upon ap-
plication to the board therefor accompanied by certification of the
amount to be paid to the state agency or participating employer. If any
application and certification under this subsection are not received by the
board prior to the withdrawal of accumulated contributions by the mem-
ber, the board shall not be liable to pay and shall not pay any amount
from the fund pursuant to any such application and certification.

    Sec. 53. K.S.A. 1997 Supp. 74-4927 is hereby amended to read as
follows: 74-4927. (1) The board may establish a plan of death and long-
term disability benefits to be paid to the members of the retirement
system as provided by this section. The long-term disability benefit shall
not be payable until the member has been prevented from carrying out
each and every duty pertaining to the member's employment as a result
of sickness or injury for a period of 180 days and the annual benefit shall
not exceed an amount equal to 662/3% of the member's annual rate of
compensation on the date such disability commenced and shall be payable
in equal monthly installments. In the event that a member's compensation
is not fixed at an annual rate but on an hourly, weekly, biweekly, monthly
or any other basis than annual, the board shall prescribe by rule and
regulation a formula for establishing a reasonable rate of annual compen-
sation to be used in determining the amount of the death or long-term
disability benefit for such member. Such plan shall provide that:

    (A) For deaths occurring prior to January 1, 1987, the right to receive
such death benefit shall cease upon the member's attainment of age 70
or date of retirement whichever first occurs. The right to receive such
long-term disability benefit shall cease (i) for a member who becomes
eligible for such benefit before attaining age 60, upon the date that such
member attains age 65 or the date of such member's retirement, which-
ever first occurs, (ii) for a member who becomes eligible for such benefit
at or after attaining age 60, the date that such member has received such
benefit for a period of five years, upon the date that such member attains
age 70, or upon the date of such member's retirement, whichever first
occurs, (iii) for all disabilities incurred on or after January 1, 1987, for a
member who becomes eligible for such benefit at or after attaining age
70, the date that such member has received such benefit for a period of
12 months or upon the date of such member's retirement, whichever first
occurs, and (iv) for all disabilities incurred on or after January 1, 1987,
for a member who becomes eligible for such benefit at or after attaining
age 75, the date that such member has received such benefit for a period
of six months or upon the date of such member's retirement, whichever
first occurs.

    (B) Long-term disability benefit payments shall be in lieu of any ac-
cidental total disability benefit that a member may be eligible to receive
under subsection (3) of K.S.A. 74-4916 and amendments thereto. Such
plan may provide that any amount which a member receives as a social
security benefit or a disability benefit or compensation from any source
by reason of any employment including, but not limited, to workers com-
pensation benefits may be deducted from the amount of insured disability
benefit payments under such plan, except that not more than 50% of such
workers compensation benefits shall be deducted therefrom. Such in-
sured disability payments shall accrue from the later of the 181st day of
total disability or the first day upon which the member ceases to draw
compensation from the employer. If the social security benefit, workers
compensation benefit, other income or wages or other disability benefit
by reason of employment, or any part thereof, is paid in a lump-sum, the
amount of the reduction shall be calculated on a monthly basis over the
period of time for which the lump-sum is given. In no case shall a member
who is entitled to receive insured disability benefits receive less than $50
per month. As used in this section, ``workers compensation benefits''
means the total award of disability benefit payments under the workers
compensation act notwithstanding any payment of attorney fees from
such benefits as provided in the workers compensation act.

    (C) The plan may include other provisions relating to qualifications
for benefits; schedules and graduation of benefits; limitations of eligibility
for benefits by reason of termination of employment or membership;
conversion privileges; limitations of eligibility for benefits by reason of
leaves of absence, military service or other interruptions in service; lim-
itations on the condition of long-term disability benefit payment by reason
of improved health; requirements for medical examinations or reports; or
any other reasonable provisions as established by rule and regulation of
uniform application adopted by the board.

    (D) On and after April 30, 1981, the board may provide under the
plan for the continuation of long-term disability benefit payments to any
former member who forfeits the entitlement to continued service credit
under the retirement system or continued assistance in the purchase of
retirement annuities under K.S.A. 74-4925 and amendments thereto and
to continued long-term disability benefit payments and continued death
benefit coverage, by reason of the member's withdrawal of contributions
from the retirement system or the repurchase of retirement annuities
which were purchased with assistance received under K.S.A. 74-4925 and
amendments thereto. Such long-term disability benefit payments may be
continued until such individual dies, attains age 65 or is no longer disa-
bled, whichever occurs first.

    (E) Any visually impaired person who is in training at and employed
by a sheltered workshop for the blind operated by the secretary of social
and rehabilitation services and who would otherwise be eligible for the
insured disability benefit as described in this section shall not be eligible
to receive such benefit due to visual impairment as such impairment shall
be determined to be a preexisting condition.

    (2) (A) In the event that a member becomes eligible for a long-term
disability benefit under the plan authorized by this section such member
shall be given participating service credit for the entire period of such
disability. Such member's final average salary shall be computed in ac-
cordance with subsection (17) of K.S.A. 74-4902 and amendments thereto
except that the years of participating service used in such computation
shall be the years of salaried participating service.

    (B) In the event that a member eligible for a long-term disability
benefit under the plan authorized by this section shall be disabled for a
period of five years or more immediately preceding retirement, such
member's final average salary shall be adjusted upon retirement by the
actuarial salary assumption rates in existence during such period of dis-
ability. Effective July 1, 1993, such member's final average salary shall be
adjusted upon retirement by 5% for each year of disability after July 1,
1993.

    (C) In the event that a member eligible for a long-term disability
benefit under the plan authorized by this section shall be disabled for a
period of five years or more immediately preceding death, such member's
current annual rate shall be adjusted by the actuarial salary assumption
rates in existence during such period of disability. Effective July 1, 1993,
such member's current annual rate shall be adjusted upon death by 5%
for each year of disability after July 1, 1993.

    (3) (A) To carry out the legislative intent to provide, within the funds
made available therefor, the broadest possible coverage for members who
are in active employment or involuntarily absent from such active em-
ployment, the plan of death and long-term disability benefits shall be
subject to adjustment from time to time by the board within the limita-
tions of this section. The plan may include terms and provisions which
are consistent with the terms and provisions of group life and long-term
disability policies usually issued to those employers who employ a large
number of employees. The board shall have the authority to establish and
adjust from time to time the procedures for financing and administering
the plan of death and long-term disability benefits authorized by this
section. Either the insured death benefit or the insured disability benefit
or both such benefits may be financed directly by the system or by one
or more insurance companies authorized and licensed to transact group
life and group accident and health insurance in this state.

    (B) The board may contract with one or more insurance companies,
which are authorized and licensed to transact group life and group acci-
dent and health insurance in Kansas, to underwrite or to administer or
to both underwrite and administer either the insured death benefit or the
insured disability benefit or both such benefits. Each such contract with
an insurance company under this subsection shall be entered into on the
basis of competitive bids solicited and administered by the board. Such
competitive bids shall be based on specifications prepared by the board.

    (i) In the event the board purchases one or more policies of group
insurance from such company or companies to provide either the insured
death benefit or the insured disability benefit or both such benefits, the
board shall have the authority to subsequently cancel one or more of such
policies and, notwithstanding any other provision of law, to release each
company which issued any such canceled policy from any liability for
future benefits under any such policy and to have the reserves established
by such company under any such canceled policy returned to the system
for deposit in the group insurance reserve of the fund.

    (ii) In addition, the board shall have the authority to cancel any policy
or policies of group life and long-term disability insurance in existence
on the effective date of this act and, notwithstanding any other provision
of law, to release each company which issued any such canceled policy
from any liability for future benefits under any such policy and to have
the reserves established by such company under any such canceled policy
returned to the system for deposit in the group insurance reserve of the
fund. Notwithstanding any other provision of law, no premium tax shall
be due or payable by any such company or companies on any such policy
or policies purchased by the board nor shall any brokerage fees or com-
missions be paid thereon.

    (4) (A) There is hereby created in the state treasury the group insur-
ance reserve fund. Investment income of the fund shall be added or cred-
ited to the fund as provided by law. The cost of the plan of death and
long-term disability benefits shall be paid from a special reserve hereby
created in the fund, to be known as the group insurance reserve fund,
which shall be administered by the board. Each participating employer
shall appropriate and pay to the system in such manner as the board shall
prescribe in addition to the employee and employer retirement contri-
butions an amount equal to .6% of the amount of compensation on which
the members' contributions to the Kansas public employees retirement
system are based for deposit in the group insurance reserve of the Kansas
public employees retirement fund.

    (B) The director of the budget and the governor shall include in the
budget and in the budget request for appropriations for personal services
a sum to pay the state's contribution to the group insurance reserve fund
as provided by this section and shall present the same to the legislature
for allowances and appropriation.

    (C) The provisions of subsection (4) of K.S.A. 74-4920 and amend-
ments thereto shall apply for the purpose of providing the funds to make
the contributions to be deposited to the group insurance reserve fund.

    (D) Any dividend or retrospective rate credit allowed by an insurance
company or companies shall be credited to the group insurance reserve
fund and the board may take such amounts into consideration in deter-
mining the amounts of the benefits under the plan authorized by this
section.

    (5) The death benefit provided under the plan of death and long-
term disability benefits authorized by this section shall be known and
referred to as insured death benefit. The long-term disability benefit pro-
vided under the plan of death and long-term disability benefits authorized
by this section shall be known and referred to as insured disability benefit.

    (6) The board is hereby authorized to establish an optional death
benefit plan. Except as provided in subsection (7), such optional death
benefit plan shall be made available to all employees who are covered or
may hereafter become covered by the plan of death and long-term disa-
bility benefits authorized by this section. The cost of the optional death
benefit plan shall be paid by the applicant either by means of a system
of payroll deductions or direct payment to the board. The board shall
have the authority and discretion to establish such terms, conditions, spec-
ifications and coverages as it may deem to be in the best interest of the
state of Kansas and its employees which should include term death ben-
efits for the person's period of active state employment regardless of age,
but in no case, on and after January 1, 1989, shall the maximum allowable
coverage be less than $200,000. The cost of the optional death benefit
plan shall not be established on such a basis as to unreasonably discrim-
inate against any particular age group. The board shall have full admin-
istrative responsibility, discretion and authority to establish and continue
such optional death benefit plan and the director of accounts and reports
of the department of administration shall when requested by the board
and from funds appropriated or available for such purpose establish a
system to make periodic deductions from state payrolls to cover the cost
of the optional death benefit plan coverage under the provisions of this
subsection (6) and shall remit all deductions together with appropriate
accounting reports to the system. There is hereby created in the state
treasury the optional death benefit plan reserve fund. Investment income
of the fund shall be added or credited to the fund as provided by law. All
funds received by the board, whether in the form of direct payments,
payroll deductions or otherwise, shall be accounted for separately from
all other funds of the retirement system and shall be paid into a special
reserve hereby created in the fund, to be known as the optional death
benefit plan reserve fund, from which reserve the board is authorized to
make the appropriate payments and to pay the ongoing costs of admin-
istration of such optional death benefit plan as may be incurred in carrying
out the provisions of this subsection (6).

    (7) Any employer other than the state of Kansas which is currently a
participating employer of the Kansas public employees retirement system
or is in the process of affiliating with the Kansas public employees retire-
ment system may also elect to affiliate for the purposes of subsection (6).
All such employers shall make application for affiliation with such system,
to be effective on January 1 next following application. Such optional
death benefit plan shall not be available for employees of employers spec-
ified under this subsection until after July 1, 1988.

    Sec. 54. K.S.A. 74-4927a is hereby amended to read as follows: 74-
4927a. (1) For the purposes of providing the ``insured death benefit'' and
``insured disability benefit'' as prescribed in K.S.A. 74-4927 and amend-
ments thereto to those members of the faculty and other persons em-
ployed by educational institutions under the management of the state
board of regents as defined in paragraph (a) of subsection (1) of K.S.A.
74-4925 and amendments thereto, and who are receiving assistance in
the purchase of retirement annuities as therein provided, the term ``mem-
ber'' as used in K.S.A. 74-4927 and amendments thereto shall include the
aforementioned members of the faculty and other persons employed by
educational institutions under the management of the state board of re-
gents and who are receiving such assistance.

    (2) Each institution under the state board of regents shall pay to the
Kansas public employees retirement system in such manner as the board
of trustees shall prescribe each payroll period an amount sufficient to pay
the employer's contribution to the group insurance reserve as provided
in K.S.A. 74-4927 and amendments thereto. Subsection (2) of K.S.A.
74-4932 and amendments thereto shall also apply in determining such
contributions and benefits.

    (3) Each institution under the state board of regents shall maintain a
file of the beneficiaries named by the persons covered under the provi-
sions of this act in the form and manner as prescribed by the board of
trustees.

    (4) In the event that a member of the faculty or other person as
defined in this section becomes eligible for the insured disability benefit,
the state board of regents shall continue to provide the assistance includ-
ing the payment of employers and employees contributions in the pur-
chase of the retirement annuities as provided in K.S.A. 74-4925 and
amendments thereto, until the attainment of age 65 or the date of retire-
ment, whichever occurs first.

    (5) Any member of the faculty or other person as defined in this
section may elect to continue to participate in the plan of death and long-
term disability benefits as prescribed in K.S.A. 74-4927 and amendments
thereto while on leave of absence without compensation from an edu-
cational institution under the management of the state board of regents.
Such member or person's election is valid only if such member or person
files notice of such election with such member's or person's educational
institution. Such member or person shall remit an amount equal to the
required contributions to such educational institution. The educational
institution shall report and remit such contributions in the same form and
manner as other contributions are remitted by such educational institu-
tion. Such contributions shall not be more than such contributions would
have been had such member or person not commenced such leave of
absence. Upon returning to employment with an educational institution
under the management of the state board of regents, for such member
or person who elects to continue coverage as provided in this subsection,
the provisions of subsections (1) through (4) of this section shall apply.

    Sec. 55. K.S.A. 74-4927b is hereby amended to read as follows: 74-
4927b. (1) For the purposes of providing the ``insured death benefit'' and
``insured disability benefit'' as prescribed in K.S.A. 74-4927 and amend-
ments thereto to those members of the faculty and other persons em-
ployed by educational institutions under the management of the state
board of education who are receiving assistance in the purchase of re-
tirement annuities as provided in K.S.A. 74-4925 and amendments
thereto, the term ``member'' as used in K.S.A. 74-4927 and amendments
thereto shall include the aforementioned members of the faculty and
other persons employed by educational institutions under the manage-
ment of the state board of education and who are receiving such assis-
tance.

    (2) Each institution under the state board of education furnishing
such assistance shall pay to the Kansas public employees retirement sys-
tem in such manner as the board of trustees shall prescribe each payroll
period an amount sufficient to pay the employer's contribution to the
group insurance reserve as provided in K.S.A. 74-4927 and amendments
thereto. Subsection (2) of K.S.A. 74-4932 and amendments thereto shall
also apply in determining such contributions and benefits.

    (3) Each such institution under the state board of education shall
maintain a file of the beneficiaries named by the persons covered under
the provisions of this act in the form and manner as prescribed by the
board of trustees.

    (4) In the event that a member of the faculty or other person as
herein defined becomes eligible for the insured disability benefit, the
respective educational institutions under the board of education herein-
before described shall continue to provide the assistance including the
payment of employers and employees contributions in the purchase of
the retirement annuities provided in K.S.A. 74-4925 and amendments
thereto, until the attainment of age 65 or the date of retirement, which-
ever occurs first.

    Sec. 56. K.S.A. 74-4927h is hereby amended to read as follows: 74-
4927h. (1) The provisions of this section shall apply to employees of the
state board of regents and institutions under its management covered by
the provisions of K.S.A. 74-4925 and 74-4927a and amendments thereto.
This section shall be administered by the board of trustees of the Kansas
public employees retirement system.

    (2) (a) In the event that a member dies before retirement as a result
of an accident arising out of and in the course of the member's actual
performance of duty in the employ of a participating employer inde-
pendent of all other causes and not as a result of a willfully negligent or
intentional act of the member, an accidental death benefit shall be pay-
able if: (A) A report of the accident, in a form acceptable to the board, is
filed in the office of the executive secretary of the board within 60 days
of the date of the accident causing such death, and an application for such
benefit, in such form and manner as the board shall prescribe, is filed in
the office of the executive secretary of the board within two years of the
date of the accident, but the board may waive such time limits for a
reasonable period if in the judgment of the board the failure to meet
these limits was due to lack of knowledge or incapacity; and (B) the board
finds from such evidence as it may require, to be submitted in such form
and manner as it shall prescribe, that the natural and proximate cause of
death was the result of an accident arising out of and in the course of the
member's employment with a participating employer independent of all
other causes at a definite time and place. Such accidental death benefit
shall be a lump-sum amount of $50,000 and an annual amount of 1/2 of
the member's final average salary which shall accrue from the first day of
the month following the date of death and which shall be payable in
monthly installments or as the board may direct, but in no case shall the
accidental death benefit be less than $100 per month. The accidental
death benefit payments shall be paid to the surviving spouse of such
deceased member, such payments to continue so long as such surviving
spouse lives or until such surviving spouse remarries. If there is no sur-
viving spouse, or in the case the spouse dies or remarries before the
youngest child of such deceased member attains age 18 years or before
the youngest child of such deceased member attains age 23, if such child
is a full-time student as provided in K.S.A. 74-49,117, or if there are one
or more children of the member who are totally disabled and dependent
on the member or spouse, the accidental death benefit payments shall be
paid to the child or children of such member under age 18 years or under
age 23 years, if such child or children are full-time students as provided
in K.S.A. 74-49,117 and to the child or children of the member who are
totally disabled and dependent on the member or spouse, such payments
to be divided in such manner as the board in its discretion shall determine
and to continue until the youngest surviving child dies or attains age 18
years or attains age 23 years, if such child is a full-time student as provided
in K.S.A. 74-49,117, in the case of the child or children who are totally
disabled and dependent on the member or spouse, until death or until
no longer totally disabled. If there is no surviving spouse or child eligible
for accidental death benefits under this subsection (2) at the time of the
member's death, the accidental death benefit payments shall be paid to
the parent or parents of such member who are dependent on such mem-
ber, such payments to continue until the last such parent dies. All pay-
ments due under this subsection (2) to a minor shall be made to a legally
appointed conservator of such minor or totally disabled child as provided
in subsection (7) of K.S.A. 74-4902 and amendments thereto.

    (b) In construction of this section, there shall be no presumption that
the death of the member was the result of an accident nor shall there be
a liberal interpretation of the law or evidence in favor of the person claim-
ing under this subsection (2). In the event of the death of a member
resulting from a heart, circulatory or respiratory condition, there must be
clear and precise evidence that death was the result of an accident in-
dependent of all other causes which arose out of and in the course of the
member's actual performance of duties in the employ of a participating
employer.

    (c) The value, as determined by the board upon recommendation of
the actuary, of any worker's compensation benefits paid or payable to the
recipient or recipients of an annual benefit under this subsection (2) shall
be deducted from the amounts which become payable under this section.
In the event that a member should die as a result of an accident as de-
scribed in this subsection (2), all elections or options previously made by
the deceased member shall become void and of no effect whatsoever and
the retirement system shall be liable only for the accidental death benefit
and any insured death benefit that may be due. The benefit payable under
this subsection (2) shall be known and referred to as the ``accidental death
benefit.''

    (3) Any costs to the board from the claims arising under this section
shall be included in the rate certified by the board to finance the costs of
members under subsection (3) of K.S.A. 74-4925 and amendments
thereto.

    (4) The payment of benefits as provided in this section is subject to
the provisions of section 83 and amendments thereto.

    Sec. 57. K.S.A. 74-4928 is hereby amended to read as follows: 74-
4928. Notwithstanding the provisions of K.S.A. 74-4902, 74-4911 and 74-
4913 and amendments thereto, to the contrary, an employee of a partic-
ipating employer who was employed by the legislature on January 15,
1962, and was employed on July 1, 1943, and July 1, 1962, by the partic-
ipating employer by whom said such employee is employed on the effec-
tive date of this act, shall be an eligible member of the Kansas public
employees retirement system as of July 1, 1962, subject to the provisions
of section 83 and amendments thereto, upon the payment of appropriate
employer and employee contributions, and. Such employee shall be en-
titled to receive full credit for employment with said such participating
employer prior to said participating employer's entry date. The prior serv-
ice annual salary in such case shall be the compensation, (not including
any amount received as payment for overtime or as reimbursement for
travel or moving expense), received for personal services by the employee
from the employer during the last twelve (12) 12 months of employment
prior to January 1, 1962.

    Sec. 58. K.S.A. 1997 Supp. 74-4932 is hereby amended to read as
follows: 74-4932. As used in this act, unless the context otherwise re-
quires:

    (1) ``Accumulated contributions'' means the sum of all contributions
by a member to the system which shall be credited to such member's
account, with interest allowed thereon, plus such member's contributions
transferred from the school employees savings fund of the state school
retirement system;

    (2) ``compensation'' means the same as defined in subsection (9) of
K.S.A. 74-4902 and amendments thereto;

    (3) ``school year'' means the twelve-month period beginning Septem-
ber 1 and ending August 31;

    (4) ``employee'' means any employee of a participating employer
which is an eligible employer, as specified in K.S.A. 74-4931 and amend-
ments thereto, whose employment is not seasonal or temporary and
whose employment requires at least 630 hours of work per year or 3.5
hours of work per day for at least 180 days or any employee who is con-
currently employed by two or more eligible employers, as specified in
K.S.A. 74-4931 and amendments thereto, whose combined employment
is not seasonal or temporary and whose combined employment requires
at least 630 hours of work per year or 3.5 hours of work per day for at
least 180 days. Employee shall not include:

    (a) Any employee who is covered by or eligible for or who will be-
come eligible for retirement benefits under any retirement plan or system
provided by K.S.A. 74-4925 and amendments thereto;

    (b) any employee who is a contributing member of the United States
civil service retirement system;

    (c) any employee or class of employees specifically exempt by law,
except those persons who were formerly employees of one or more of
the participating employers which are eligible employers as specified in
K.S.A. 74-4931 and amendments thereto, who are covered by and have
contributions on deposit with the state school retirement system and who
have not retired under that system on the day next preceding entry date;

    (d) any employee who on entry date is covered by or eligible for or
will become eligible for retirement benefits under a separate retirement
system authorized or established under K.S.A. 72-1758 to 72-1769, inclu-
sive, and amendments thereto, or K.S.A. 72-6780 and amendments
thereto, except that this paragraph (d) shall not include any employee,
who before September 1, 1974, elects to become a member of the Kansas
public employees retirement system as provided in K.S.A. 74-4935a and
amendments thereto; or

    (e) on and after July 1, 1975, no person who is otherwise eligible for
membership in the Kansas public employees retirement system shall be
barred from such membership by reason of coverage by, eligibility for or
future eligibility for a retirement annuity under the provisions of K.S.A.
74-4925 and amendments thereto. However, no person shall receive serv-
ice credit under the Kansas public employees retirement system for any
period of service for which benefits accrue or are granted under a retire-
ment annuity plan under the provisions of K.S.A. 74-4925 and amend-
ments thereto;

    (5) ``executive secretary'' means the managing officer of the system
as defined in subsection (16) of K.S.A. 74-4902 and amendments thereto;

    (6) ``military service'' means the same as defined in subsection (22)
of K.S.A. 74-4902 and amendments thereto, and includes such service
when followed by return to employment with the same or another par-
ticipating employer on or before the beginning of the next school year
following discharge or separation from such military service;

    (7) ``normal retirement date'' means the same as defined in subsec-
tion (23) of K.S.A. 74-4902 and amendments thereto, as modified by
subsection (1) of K.S.A. 74-4937 and amendments thereto; and

    (8) ``school employment'' means the employment of a member when
employed by an eligible employer as specified in any of subsections (1),
(2) or (3) of K.S.A. 74-4931 and amendments thereto.; and

    (9) ``USERRA'' means the same as defined in subsection (35) of K.S.A.
74-4902 and amendments thereto.

    Sec. 59. K.S.A. 74-4933 is hereby amended to read as follows: 74-
4933. (1) Except as otherwise specifically provided in this act and to the
extent not inconsistent herewith with the provisions of this act, employers
who are participating employers under this act, employees of such em-
ployers and the provisions of this act shall be subject to the provisions of
K.S.A. 74-4901 through 74-4929, inclusive, et seq. and amendments
thereto and acts supplemental thereof. The rights of such employees to
benefits accrued to the extent funded to the date of transfer or to the
amounts in such employees' accounts, if any, are nonforfeitable.

    (2) The provisions of K.S.A. 72-5501 to through 72-5534, inclusive,
and amendments thereto shall not apply to any person who is an employee
as defined in this act K.S.A. 74-4932 and amendments thereto, except as
specifically otherwise provided in this act.

    (3) For purposes of this section, ``act'' means the provisions of K.S.A.
74-4931 et seq. and amendments thereto.

    Sec. 60. K.S.A. 74-4935 is hereby amended to read as follows: 74-
4935. (1) Any employee of a participating employer on the entry date of
such employer shall be a member of the system on the entry date.

    (2) Any employee other than an elected official who is employed by
a participating employer after the entry date of such employer shall be a
member of the system on the first day of such employment.

    (3) Any employee who is in military service subject to the provisions
of USERRA or on leave of absence on the entry date of the employee's
employer shall become a member of the system immediately upon re-
turning to active employment with the same or another participating em-
ployer.

    (4) Any member of the state school retirement system who meets the
following conditions on entry date shall become a member of the system
on entry date:

    (a) Is not employed by a participating employer;

    (b) has not retired under the state school retirement system;

    (c) has contributions on deposit with the state school retirement sys-
tem; and

    (d) would be eligible for retirement under the state school retirement
system based on service which is credited to such member thereunder.

    Sec. 61. K.S.A. 1997 Supp. 74-4935c is hereby amended to read as
follows: 74-4935c. (a) Any member who is elected or appointed to a
full-time position as a school employee representative may elect to con-
tinue to participate in the Kansas public employees retirement system
under the provisions of this act after the date the member assumes such
full-time position as an employee representative. Such election is valid
only if the member files notice of such election in the office of the ex-
ecutive secretary of the Kansas public employees retirement system, in a
form acceptable to the system, within a reasonable time after the member
assumes such full-time position as an employee representative.

    (b) For purposes of contribution to and benefits under the Kansas
public employees retirement system, compensation of such member shall
be a monthly amount equal to the monthly amount of the member's
compensation with the member's participating employer at the time the
member left to assume such full-time position as an employee represen-
tative. The employer rate of contribution and employee rate of contri-
bution shall be applied to such amount monthly. Subject to the provisions
of section 83 and amendments thereto, such member shall remit the re-
quired employee and employer contributions to such member's partici-
pating employer monthly in advance with a report as may be required by
the system.

    (c) Any election by such member under subsection (a) shall remain
in effect for a period not to exceed one elected term or until revoked in
writing and received by the system or such member becomes an em-
ployee of another participating employer or upon failure of such member
to remit to such member's participating employer the employee and em-
ployer contributions required under subsection (b).

    (d) The provisions of subsection (2) of K.S.A. 74-4916 and amend-
ments thereto are not applicable to any person making an election under
subsection (a).

    (e) The provisions of this section shall take effect on and after July 1,
1994 and shall expire on June 30, 1998.

    Sec. 62. K.S.A. 74-4936 is hereby amended to read as follows: 74-
4936. (1) Prior service shall be credited as follows:

    (a) A member shall receive full credit for continuous employment
prior to the entry date with such member's employer on the entry date,
except that if the employee was employed on March 15, 1970, by a par-
ticipating employer, then all previous employment with a participating
employer shall be credited;

    (b) any member of the state school retirement system not employed
on the day preceding entry date by an eligible employer which will be-
come a participating employer on entry date, who has contributions on
deposit with the state school retirement system on entry date, who would
become eligible for a retirement benefit based on the credited service
under the state school retirement system, on entry date, and who has not
retired under the state school retirement system shall be granted prior
service credit for employment with any participating employer prior to
entry date;

    (c) any member of the state school retirement system not employed
on the date preceding entry date by an eligible employer which will be-
come a participating employer on entry date, who has contributions on
deposit on entry date, and who would not become eligible for a retirement
benefit on the basis of service credited under the state school retirement
system on entry date shall not receive credit for such service;

    (d) leaves of absence shall not be credited;

    (e) subject to the provisions of USERRA, military service which is
credited under the state school retirement system shall be credited;

    (f) one year of prior service credit shall be granted for each year of
school employment by a participating employer;

    (g) any member who is not otherwise eligible for service credit as
provided for in subsection (1)(a) may be granted credit for such service
upon the attainment of 38 quarters of participating service.

    (2) Participating service shall be credited as follows: (a) A member
shall receive credit for participating service with a participating employer
in accordance with rules and regulations established by the board of trus-
tees, except that no more than one calendar quarter of participating serv-
ice shall be credited for any employment within one calendar quarter;

    (b) leaves of absence and military service shall not count as a break
in continuous employment, if the member leaves accumulated contri-
butions on deposit with the fund. The period of military service shall be
credited, except that after July 1, 1974, not more than five years' credit
for military service shall be granted hereunder to the extent required by
the provisions of USERRA, but leaves of absence shall not be credited;

    (c) termination of employment followed by employment by the same
or with another participating employer within five years shall not consti-
tute a break in continuous employment, if such employee leaves accu-
mulated contributions on deposit with the system. Such period while not
employed shall not be credited as participating service.

    (3) In determining the numbers of years of credited prior service or
participating service a fractional year of six months or more shall be con-
sidered as one year and a fractional year of less than six months shall be
disregarded.

    (4) If a member is on leave of absence or is in military service or has
terminated employment with a participating employer, such member may
withdraw accumulated contributions on forms prescribed by the board.
In the event the member withdraws the accumulated contributions, such
member's membership in the system shall terminate and the system shall
have no further liability or obligation to such member. Thereafter, if such
former member is employed by the same or another participating em-
ployer, such member shall be deemed to be a new employee unless oth-
erwise required by the provisions of USERRA.

    (5) If a member does not return to employment with the same or
another participating employer within five years following termination of
employment, such member shall withdraw accumulated contributions on
forms prescribed by the board. Such member's membership in the system
shall terminate and the system shall have no further liability or obligation
to such member. Thereafter, if such former member is employed by the
same or another participating employer, such member shall be deemed
to be a new employee.

    (6) If a member, who has a vested benefit, again becomes an em-
ployee of a participating employer, any credited service such member
subsequently accrues shall be added to that which had been vested by
virtue of previous service.

    Sec. 63. K.S.A. 1997 Supp. 74-4936a is hereby amended to read as
follows: 74-4936a. Any employee of a participating employer who is a
member of the Kansas public employees retirement system, who was
previously employed in a teaching position with a public school system of
another state, in a foreign teaching service in an overseas dependents'
school, in a recognized teacher exchange program or in any program
where a teacher is chosen by the Kansas department of education to teach
in a foreign country and which service otherwise meets the requirements
of an employee as prescribed in subsection (14) of K.S.A. 74-4902 or
subsection (4) of K.S.A. 74-4932 and amendments thereto may elect to
purchase prior service for such out-of-state public school or overseas
teaching employment. The benefit for each such year of employment shall
be equal to 1% of the final average salary of any such member. Subject
to the provisions of section 83 and amendments thereto, such member
may purchase such prior service by making application therefor prior to
date of retirement at an additional rate of contribution in addition to the
employee's rate of contribution as provided in K.S.A. 74-4919 and amend-
ments thereto, based upon the member's attained age at the time of
purchase and using actuarial assumptions and tables in use by the retire-
ment system at the time of such purchase. Such additional rate of con-
tribution shall commence at the beginning of the quarter following such
election and shall remain in effect until all quarters of such service have
been purchased. Subject to the provisions of section 83 and amendments
thereto, any such member may purchase such prior service as described
in this section by electing to effect such purchase by means of a single
lump-sum payment in lieu of employee contributions as provided in this
section in an amount equal to the then present value of the benefits being
purchased as determined by the actuary using the member's attained age,
annual compensation at the time of purchase and the actuarial assump-
tions and tables then in use by this system. The lump-sum payment shall
be made immediately upon being notified of the amount due. No partic-
ipating employer shall pay the cost, or any part thereof, of any prior
service authorized to be purchased by a member under this section.

    Sec. 64. K.S.A. 74-4942 is hereby amended to read as follows: 74-
4942. In the event that a person first entered school service September
1, 1923, and first became a member of the Kansas school retirement
system in 1960 and retired under the Kansas school retirement system in
1967 and was a suspended annuitant while employed by an employer who
became a participating employer as defined in K.S.A. 74-4931 on March
15, 1970, and on the entry date of said such employer, may become a
member of the Kansas public employees retirement system if: (1) The
person is an eligible employer as defined in K.S.A. 74-4902 or 74-4931
and amendments thereto; (2) application for membership is made within
six (6) months after the effective date of this act and; (3) such person
repays to the Kansas school retirement system an amount equal to all
annuities which have been received since 1967, both service and savings,;
and (4) subject to the provisions of section 83 and amendments thereto,
such individual person pays an amount equivalent to employee contri-
butions which would have been deducted from his such person's com-
pensation from the employer's entry date. Such individual shall then be
considered an employee as defined in subsection (4) of K.S.A. 74-4932
and amendments thereto, on the entry date of the participating employer
and may be granted prior and participating service credit in accordance
with the provisions of K.S.A. 74-4936 and amendments thereto.

    Sec. 65. K.S.A. 1997 Supp. 74-4952 is hereby amended to read as
follows: 74-4952. As used in K.S.A. 74-4951 et seq. and amendments
thereto:

    (1) ``Accumulated contributions'' means the sum of all contributions
by a member to the system which shall be credited to the member's
account with interest allowed thereon after June 30, 1982.

    (2) ``Disability'' means the total inability to perform permanently the
duties of the position of a policeman or fireman.

    (3) ``Eligible employer'' means any city, county, township or other
political subdivision of the state employing one or more employees as
firemen or policemen.

    (4) ``Employee'' means any policeman or fireman employed by a par-
ticipating employer whose employment for police or fireman purposes is
not seasonal or temporary and requires at least 1,000 hours of work per
year.

    (5) ``Entry date'' means the date as of which an eligible employer
joins the system; the first entry date pursuant to this act is January 1,
1967.

    (6) ``Final average salary'' means:

    (a) For members who are first hired as an employee, as defined in
subsection (4), before July 1, 1993, the average highest annual compen-
sation paid to a member for any three of the last five years of participating
service immediately preceding retirement or termination of employment,
or if participating service is less than three years, then the average annual
compensation paid to the member during the full period of participating
service, or if a member has less than one calendar year of participating
service, then the member's final average salary shall be computed by
multiplying the member's highest monthly salary received in that year by
12;

    (b) for members who are first hired as an employee, as defined in
subsection (4), on and after July 1, 1993, the average highest annual salary,
as defined in subsection (34) of K.S.A. 74-4902 and amendments thereto,
paid to a member for any three of the last five years of participating
service immediately preceding retirement or termination of employment,
or if participating service is less than three years, then the average annual
salary, as defined in subsection (34) of K.S.A. 74-4902 and amendments
thereto, paid to the member during the full period of participating service,
or if a member has less than one calendar year of participating service,
then the member's final average salary shall be computed by multiplying
the member's highest monthly salary received in that year by 12;

    (c) for purposes of subparagraphs (a) and (b) of this subsection, the
date that such member is first hired as an employee for members who
are employees of employers that elected to participate in the system on
or after January 1, 1994, shall be the date that such employee's employer
elected to participate in the system; and

    (d) for any application to purchase or repurchase service credit for a
certain period of service as provided by law received by the system after
May 17, 1994, for any member who will have contributions deducted from
such member's compensation at a percentage rate equal to two or three
times the employee's rate of contribution or who will have contributions
deducted from such member's compensation at an additional rate of con-
tribution, in addition to the employee's rate of contribution as provided
in K.S.A. 74-4919 and amendments thereto or will begin paying to the
system a lump-sum amount for such member's purchase or repurchase,
and such deductions or lump-sum payment commences after the com-
mencement of the first payroll period in the third quarter, ``final average
salary'' shall not include any amount of compensation or salary which is
based on such member's purchase or repurchase. Any application to pur-
chase or repurchase multiple periods of service shall be treated as mul-
tiple applications.

    (e) Notwithstanding any other provision of this section, for purposes
of applying limits as provided by the federal internal revenue code, salary
shall have the meaning as determined pursuant to section 83 and amend-
ments thereto.

    (7) ``Retirement benefit'' means a monthly income or the actuarial
equivalent thereof paid in such manner as specified by the member as
provided under the system or as otherwise allowed to be paid at the
discretion of the board, with benefits accruing from the first day of the
month coinciding with or following retirement and ending on the last day
of the month in which death occurs. Upon proper identification such
surviving spouse may negotiate the warrant issued in the name of the
retirant.

    (8) ``Normal retirement date'' means the date on or after which a
member may retire with eligibility for retirement benefits for age and
service as provided in subsections (1) and (3) of K.S.A. 74-4957 and
amendments thereto;

    (9) ``Retirement system'' or ``system'' means the Kansas police and
firemen's retirement system as established by this act and as it may be
hereafter amended.

    (10) ``Service-connected'' means with regard to a death or any phys-
ical or mental disability, any such death or disability resulting from ex-
ternal force, violence or disease occasioned by an act of duty as a police-
man or fireman and, for any member after five years of credited service,
includes any death or disability resulting from a heart disease or disease
of the lung or respiratory tract or cancer as provided in this subsection,
except that in the event that the member ceases to be a contributing
member except by reason of a service-connected disability for a period
of six months or more and then again becomes a contributing member,
the provision relating to death or disability resulting from a heart disease,
disease of the lung or respiratory tract or cancer as provided in this sub-
section shall not apply until such member has again become a contrib-
uting member for a period of not less than two years or unless clear and
precise evidence is presented that the heart disease, disease of the lung
or respiratory tract or cancer as provided in this subsection was in fact
occasioned by an act of duty as a policeman or fireman. The provisions
of this section relating to the presumption that the death or disability
resulting from cancer is service-connected shall only apply if the condition
that caused the death or disability is a type of cancer which may, in gen-
eral, result from exposure to heat, radiation or a known carcinogen.

    (11) ``Fireman'' or ``firemen'' means an employee assigned to the fire
department and engaged in the fighting and extinguishment of fires and
the protection of life and property therefrom or in support thereof and
who is specifically designated, appointed, commissioned or styled as such
by the governing body or city manager of the participating employer and
certified to the retirement system as such.

    (12) ``Police,'' ``policeman'' or ``policemen'' means an employee as-
signed to the police department and engaged in the enforcement of law
and maintenance of order within the state and its political subdivisions,
including sheriffs and sheriffs' deputies, or in support thereof and who is
specifically designated, appointed, commissioned or styled as such by the
governing body or city manager of the participating employer and certi-
fied to the retirement system as such.

    (13) Except as otherwise defined in this act, words and phrases used
in K.S.A. 74-4951 et seq. and amendments thereto, shall have the same
meanings ascribed to them as are defined in K.S.A. 74-4902 and amend-
ments thereto.

    Sec. 66. K.S.A. 74-4953 is hereby amended to read as follows: 74-
4953. (1) There is hereby created the ``Kansas police and firemen's re-
tirement system'' which shall be is a division of the Kansas public em-
ployees retirement system created by K.S.A. 74-4903 and amendments
thereto, and which shall be is subject to the provisions of K.S.A. 74-4901
to 74-4926 et seq. and amendments thereto.

    (2) The Kansas police and fireman's retirement system shall be ad-
ministered by the board in the manner required to satisfy the applicable
qualification requirements for governmental plans as specified in the fed-
eral internal revenue code, and as appropriate for a governmental plan.
The provisions of section 83 and amendments thereto shall apply to the
administration of the system.

    Sec. 67. K.S.A. 74-4954b is hereby amended to read as follows: 74-
4954b. (1) On and after July 1, 1985, any city, county, township or other
political subdivision of the state employing one or more firemen or po-
licemen, as defined by subsections (11) and (12) of K.S.A. 74-4952 and
amendments thereto, or emergency medical technician, as defined by
subsection (f) of K.S.A. 65-4314 and amendments thereto, which is cur-
rently a participating employer in the Kansas public employees retirement
system, may affiliate with the Kansas police and firemen's retirement
system established under the provisions of K.S.A. 74-4951 et seq. and
amendments thereto. All such agencies shall make application for affili-
ation with such system in the manner provided by K.S.A. 74-4954 and
amendments thereto, to be effective on January 1 next following appli-
cation.

    (2) Each participating employer affiliating pursuant to the provisions
of subsection (1) shall appropriate and pay to the system a sum sufficient
to satisfy the obligations hereunder as certified by the board.

    (3) Except as otherwise required by the provisions of USERRA, any
policeman or fireman who shall be appointed on or after the entry date
of such agency shall become a member of the Kansas police and firemen's
retirement system upon the first day of such employment.

    (4) For the purposes of determining and computing retirement ben-
efits and death and disability benefits computed upon the basis of credited
service of policemen or firemen appointed under the provisions of this
act, the term ``credited service,'' as used in K.S.A. 74-4951 et seq. and
amendments thereto, means and includes only participating service with
the participating employer, except as hereinafter provided:

    (a) Credited service of any employee with any participating employer
prior to becoming a member under these provisions shall be considered
and included in determining if the death or disability of such employee
was service connected under the provisions of subsection (10) of K.S.A.
74-4952 and amendments thereto and for the purposes of determining
the eligibility of such officer for nonservice-connected death and disability
benefits under the provisions of subsection (2) of K.S.A. 74-4959 and
amendments thereto and subsection (2) of K.S.A. 74-4960 and amend-
ments thereto.

    (b) Notwithstanding the provisions of K.S.A. 74-4957 and 74-4963
and amendments thereto, all credited service of any employee with any
participating employer prior to becoming a member under these provi-
sions shall be included and counted together with credited participating
service for the meeting of requirements of years of service fixed under
the provisions of such sections.

    Any rights and benefits accruing to any employee of an agency prior
to the effective date of affiliation shall be determined and computed pur-
suant to the provisions of K.S.A. 74-4901 et seq. and amendments thereto.
Any member who becomes a member pursuant to this section, who has
a vested retirement benefit pursuant to K.S.A. 74-4917 and amendments
thereto and who terminates employment prior to attaining a vested ben-
efit pursuant to K.S.A. 74-4963 and amendments thereto may have such
service credited for purposes of determining and computing retirement
benefits pursuant to K.S.A. 74-4901 et seq. and amendments thereto.

    Sec. 68. K.S.A. 1997 Supp. 74-4956 is hereby amended to read as
follows: 74-4956. (1) Prior service shall be credited as follows:

    (a) Each member shall receive:

    (i) Full credit for all employment, whether or not continuous, as ei-
ther a policeman or fireman prior to the entry date with such member's
employer who is such member's employer on the entry date;

    (ii) full credit for all employment, whether or not continuous, as ei-
ther a police or fireman prior to the entry date of such police or firemen's
employer, with a participating employer, if such member has at least 20
years of credited service; and

    (iii) for all continuous employment with the same employer other
than either as policeman or fireman, immediately preceding such service
as a policeman or fireman, 12 months of credit for each 24 months of
service. Any member or retirant who has been credited with prior service
as provided in this section may apply to the board on such forms as the
board prescribes for prior service credit with a participating employer
under the Kansas police and firemen's retirement system other than such
member's entry date employer. Each member shall receive full credit for
all employment as either a policeman or fireman with such other partic-
ipating employers and shall receive 12 months of credit for each 24
months of continuous service with other participating employers for con-
tinuous employment preceding service as a policeman or fireman. Upon
receipt of written verification of such employment from such other par-
ticipating employer, the board may grant such additional prior service
credit. With respect to a retirant, the board shall adjust the amount of
the retirement benefit accordingly commencing with the next monthly
benefit payment due following receipt of written verification. In the case
of any person other than a retirant receiving a retirement benefit, such
person may make application for an adjustment in the benefit amount in
the same manner as a member or retirant, and in such case the adjustment
in the benefit amount shall be determined by the board upon the advice
of the actuary, and shall commence with the next monthly benefit pay-
ment due following receipt of written verification, except that no addi-
tional prior service credit shall be granted for any service with another
participating employer for which benefits are being received or will be
received.

    If a member was employed as a fireman (, other than as a volunteer
fireman), by a township which is annexed by a participating employer the
member's retirement benefits and death and disability benefits shall be
computed on the basis of credited service. Continuous service as a fire-
man with a township prior to annexation by a member, who became a
member immediately following the annexation, shall be considered cred-
ited service.

    No such service shall be considered credited service for the purpose
of computing years of service if such fireman is receiving or will become
eligible to receive benefits as a result of such service with the township.

    (b) Leaves of absence and military service shall not be counted as
breaks in continuous employment; however, military service which is pre-
ceded within 30 days and followed by employment with a participating
employer shall be credited, except that after July 1, 1974, not more than
five years credit for military service shall be granted hereunder to the
extent required by the provisions of USERRA, but leaves of absence shall
not be credited.

    (2) Participating service shall be credited as follows: (a) A member
shall receive credit for participating service with a participating employer
in accordance with the rules and regulations established by the board. No
more than one calendar quarter of participating service shall be credited
for employment within any one calendar quarter.

    (b) Leaves of absence shall not be counted as a termination of em-
ployment provided the member leaves such member's accumulated con-
tributions on deposit with the system and returns to employment with
the employer granting such leave; however, the period of leave of absence
shall not be credited service.

    (c) To the extent required under the provisions of USERRA, military
service shall not count as a break in continuous employment provided the
member leaves such member's accumulated contributions on deposit
with the system and returns to employment within 12 months of such
member's discharge from military service without voluntarily extending
such member's service. Such member shall receive credited service for
such period of military service.

    (d) Termination of employment with a participating employer fol-
lowed by employment with the same or another participating employer
within two years shall not constitute a termination of membership pro-
vided the member leaves such member's accumulated contributions on
deposit with the system; however, the period while not employed shall
not be credited.

    (3) In determining the number of years of credited service for cal-
culation of retirement benefits a fractional year of six months or more of
credited service shall be considered as one year and a fractional year of
less than six months of credited service shall be disregarded.

    Sec. 69. K.S.A. 1997 Supp. 74-4958 is hereby amended to read as
follows: 74-4958. (1) Any member who retires on or after July 1, 1993,
shall be entitled to receive an age and service retirement benefit equal
to 2.5% of such member's final average salary multiplied by the number
of years of credited service except that in no case shall such retirement
benefit exceed 80% of such member's final average salary.

    (2) Any member who is appointed or employed prior to July 1, 1989,
who does not make an election pursuant to K.S.A. 74-4955a and amend-
ments thereto and who retires before such member's normal retirement
date shall receive an early retirement benefit equal to the annual retire-
ment benefit payable had the member retired on the normal retirement
date reduced by an amount equal to the product of (A) such annual re-
tirement benefit payable had the member retired on the normal retire-
ment date, multiplied by (B) the product of .4% multiplied by the number
of months difference, to the nearest whole month, between the member's
attained age at the time of retirement and age 55.

    (3) Upon the death after retirement of a member who was covered,
up to the entry date of the member's employer, by a pension system under
the provisions of K.S.A. 12-5001 to 12-5007, inclusive, and amendments
thereto, or K.S.A. 13-14a01 to 13-14a14, inclusive, and amendments
thereto, or K.S.A. 14-10a01 to 14-10a15, inclusive, and amendments
thereto, and who had not elected to retire under one of the options pro-
vided under K.S.A. 74-4964 and amendments thereto, the member's
spouse, if such spouse was the member's lawfully wedded spouse for a
period of not less than one year at the time of the member's retirement
or if such spouse had been the member's lawfully wedded spouse for at
least three years after the time of the member's retirement, shall receive
a lump-sum benefit equal to 1/2 the member's final average salary at the
time of the member's retirement and shall receive an annual spouse's
benefit equal to 75% of the member's retirement benefit payable in
monthly installments, to accrue from the last day of the month following
the member's date of death and ending on the last day of the month in
which the spouse dies. Commencing on the effective date of this act, any
surviving spouse, who was receiving benefits pursuant to this section and
who had such benefits terminated by reason of such spouse's remarriage,
shall be entitled to once again receive benefits pursuant to this section,
except that such surviving spouse shall not be entitled to recover any
benefits not received after the termination of benefits by reason of such
surviving spouse's remarriage but before the effective date of this act. If
there is no surviving spouse, or if after the death of the spouse there
remain one or more children under the age of 18 years or one or more
children under the age of 23 years who is a full-time student as provided
in K.S.A. 74-49,117 and amendments thereto, the annual spouse's benefit
shall be payable, subject to the provisions of section 83 and amendments
thereto, in equal shares to such children and each child's share shall end
on the last day of the month in which such child attains the age of 18
years or dies, whichever occurs earlier or in which such child attains the
age of 23 years if such child is a full-time student as provided in K.S.A.
74-49,117 and amendments thereto. Commencing on the effective date
of this act, any child who was receiving benefits pursuant to this section
and who had such benefits terminated by reason of such child's marriage,
shall be entitled to once again receive benefits pursuant to this section
subject to the limitations contained in this section, except that such child
shall not be entitled to recover any benefits not received after the ter-
mination of benefits by reason of such child's marriage but before the
effective date of this act. All payments due under this section to a minor
shall be made to a legally appointed conservator of such minor as provided
in subsection (7) of K.S.A. 74-4902 and amendments thereto. No person
shall be entitled to receive more than one benefit under the provisions
of this subsection. Any person who otherwise meets the qualifications to
receive more than one benefit under this subsection shall elect the benefit
such person shall receive.

    (4) Upon the death after retirement of a member who had not elected
to retire under one of the options provided under K.S.A. 74-4964 and
amendments thereto, such member's beneficiary shall receive an amount
equal to the excess, if any, of such member's accumulated contributions
over the sum of all retirement benefit payments made.

    (5) The provisions of law in effect on the retirement date of a member
under the system shall govern the retirement benefit payable to the re-
tirant, any joint annuitant and any beneficiary.

    Sec. 70. K.S.A. 1997 Supp. 74-4958a is hereby amended to read as
follows: 74-4958a. (1) Any member who retires on or after July 1, 1993,
shall be entitled to receive an age and service retirement benefit equal
to 2.5% of such member's final average salary multiplied by the number
of years of credited service except that in no case shall such retirement
benefit exceed 80% of such member's final average salary.

    (2) Any member who retires before such member's normal retire-
ment date shall receive an early retirement benefit equal to the annual
retirement benefit payable had the member retired on the normal retire-
ment date reduced by an amount equal to the product of (A) such annual
retirement benefit payable had the member retired on the normal retire-
ment date, multiplied by (B) the product of .4% multiplied by the number
of months difference, to the nearest whole month, between the member's
attained age at the time of retirement and age 55.

    (3) Upon the death after retirement of a member who was covered,
up to the entry date of the member's employer, by a pension system under
the provisions of K.S.A. 12-5001 to 12-5007, inclusive, and amendments
thereto, or K.S.A. 13-14a01 to 13-14a14, inclusive, and amendments
thereto, or K.S.A. 14-10a01 to 14-10a15, inclusive, and amendments
thereto, and who had not elected to retire under one of the options pro-
vided under K.S.A. 74-4964 and amendments thereto, the member's
spouse, if such spouse was the member's lawfully wedded spouse for a
period of not less than one year at the time of the member's retirement
or if such spouse had been the member's lawfully wedded spouse for at
least three years after the time of the member's retirement, shall receive
a lump-sum benefit equal to 1/2 the member's final average salary at the
time of the member's retirement and shall receive an annual spouse's
benefit equal to 75% of the member's retirement benefit payable in
monthly installments, to accrue from the first day of the month following
the member's date of death and ending on the last day of the month in
which the spouse dies. Commencing on the effective date of this act, any
surviving spouse, who was receiving benefits pursuant to this section and
who had such benefits terminated by reason of such spouse's remarriage,
shall be entitled to once again receive benefits pursuant to this section,
except that such surviving spouse shall not be entitled to recover any
benefits not received after the termination of benefits by reason of such
surviving spouse's remarriage but before the effective date of this act. If
there is no surviving spouse, or if after the death of the spouse there
remain one or more children under the age of 18 years or one or more
children under the age of 23 years who is a full-time student as provided
in K.S.A. 74-49,117 and amendments thereto, the annual spouse's benefit
shall be payable, subject to the provisions of section 83 and amendments
thereto, in equal shares to such children and each child's share shall end
on the last day of the month in which such child attains the age of 18
years or dies, whichever occurs earlier or in which such child attains the
age of 23 years, if such child is a full-time student as provided in K.S.A.
74-49,117 and amendments thereto. Commencing on the effective date
of this act, any child who was receiving benefits pursuant to this section
and who had such benefits terminated by reason of such child's marriage,
shall be entitled to once again receive benefits pursuant to this section
subject to the limitations contained in this section, except that such child
shall not be entitled to recover any benefits not received after the ter-
mination of benefits by reason of such child's marriage but before the
effective date of this act. All payments due under this section to a minor
shall be made to a legally appointed conservator of such minor as provided
in subsection (7) of K.S.A. 74-4902 and amendments thereto. No person
shall be entitled to receive more than one benefit under the provisions
of this subsection. Any person who otherwise meets the qualifications to
receive more than one benefit under this subsection shall elect the benefit
such person shall receive.

    (4) Upon the death after retirement of a member who had not elected
to retire under one of the options provided under K.S.A. 74-4964 and
amendments thereto, such member's beneficiary shall receive an amount
equal to the excess, if any, of such member's accumulated contributions
over the sum of all retirement benefit payments made.

    (5) The provisions of this section shall be effective on and after July
1, 1989 and shall apply only to members who were appointed or employed
prior to July 1, 1989, and who made an election pursuant to K.S.A. 74-
4955a and amendments thereto; and persons appointed or employed on
or after July 1, 1989.

    (6) The provisions of law in effect on the retirement date of a member
under the system shall govern the retirement benefit payable to the re-
tirant, any joint annuitant and any beneficiary.

    Sec. 71. K.S.A. 1997 Supp. 74-4959 is hereby amended to read as
follows: 74-4959. (1) Upon the death from service-connected causes as
defined in this act, of an active contributing member prior to retirement,
the following benefits shall be payable if a report of the event, in a form
acceptable to the board, is filed in the office of the executive secretary of
the board within 200 days after the date of the act of duty causing such
death and an application for such benefits, in such form and manner as
prescribed by the board, is filed in the office of the executive secretary
of the board within two years of the date of death, but the board may
waive such time limits for a reasonable period if in the judgment of the
board the failure to meet these limits was due to lack of knowledge or
incapacity:

    (a) To the member's spouse, if lawfully wedded to the member at the
time of the member's death, an annual spouse's benefit equal to 50% of
the member's final average salary, which shall accrue from the first day
of the month coinciding with or following the member's death and shall
end on the first day of the month in which the spouse's death occurs.
Commencing on the effective date of this act, any surviving spouse, who
was receiving benefits pursuant to this section and who had such benefits
terminated by reason of such spouse's remarriage, shall be entitled to
once again receive benefits pursuant to this section, except that such
surviving spouse shall not be entitled to recover any benefits not received
after the termination of benefits by reason of such surviving spouse's
remarriage but before the effective date of this act.

    (b) Subject to the provisions of section 83 and amendments thereto,
to the member's children under the age of 18 years or under the age of
23 years, if such children are full-time students as provided in K.S.A.
74-49,117 and amendments thereto an annual children's benefit equal to
10% of the member's final average salary for each such child, which shall
accrue from the first day of the month coinciding with or following the
member's death and shall end on the last day of the month in which such
child attains the age of 18 years or dies, whichever occurs earlier or in
which such child attains the age of 23 years, if such child is a full-time
student as provided in K.S.A. 74-49,117 and amendments thereto, except
that if there is no eligible spouse, or if upon the death of the spouse there
remain one or more children under the age of 18 years or under the age
of 23 years, if such children are full-time students as provided in K.S.A.
74-49,117 and amendments thereto, the annual spouse's benefit shall be
paid in equal shares to such children and each child's share shall end on
the last day of the month in which such child attains the age of 18 years
or dies, whichever occurs earlier or in which such child attains the age of
23 years, if such child is a full-time student as provided in K.S.A. 74-
49,117 and amendments thereto. Commencing on the effective date of
this act, any child who was receiving benefits pursuant to this section and
who had such benefits terminated by reason of such child's marriage,
shall be entitled to once again receive benefits pursuant to this section
subject to the limitations contained in this section, except that such child
shall not be entitled to recover any benefits not received after the ter-
mination of benefits by reason of such child's marriage but before the
effective date of this act.

    (c) In no case shall benefits payable under the provisions of para-
graphs (a) and (b) of this subsection (1) exceed 75% of the member's
final average salary.

    (2) Upon the death from causes not service-connected of an active
contributing member prior to retirement, the member's spouse, if law-
fully wedded to the member at the time of the member's death, shall
receive immediately a lump-sum benefit equal to 100% of the member's
final average salary and shall be entitled to receive an annual death benefit
equal to the member's retirement benefit calculated as if the member
had retired on the member's normal retirement date, but based upon the
member's final average salary and years of credited service on the date
of death but not to exceed the amount of the annual spouse's benefit
provided in paragraph (a) of subsection (1). An application for such ben-
efits in such form and manner as prescribed by the board must be filed
in the office of the executive secretary of the board within two years of
the date of death, but the board may waive such time limit for a reason-
able period if in the judgment of the board the failure to meet this limit
was due to the lack of knowledge or incapacity. On and after July 1, 1993,
the annual spouse's benefit under this subsection (2) shall accrue from
the first day of the month coinciding with or following the member's
death and shall continue until the spouse's death. Commencing on the
effective date of this act, any surviving spouse, who was receiving benefits
pursuant to this section and who had such benefits terminated by reason
of such spouse's remarriage, shall be entitled to once again receive ben-
efits pursuant to this section, except that such surviving spouse shall not
be entitled to recover any benefits not received after the termination of
benefits by reason of such surviving spouse's remarriage but before the
effective date of this act. If there is no eligible spouse or if after the death
of the spouse there remain one or more children of the member under
the age of 18 years or one or more children of the member under the
age of 23 years, if such children are full-time students as provided in
K.S.A. 74-49,117 and amendments thereto, the spouse's benefit shall be
payable, subject to the provisions of section 83 and amendments thereto,
in equal shares to such children and each child's share shall end on the
last day of the month in which such child attains the age of 18 years or
dies, whichever occurs earlier or in which such child attains the age of 23
years, if such child is a full-time student as provided in K.S.A. 74-49,117
and amendments thereto. Commencing on the effective date of this act,
any child who was receiving benefits pursuant to this section and who
had such benefits terminated by reason of such child's marriage, shall be
entitled to once again receive benefits pursuant to this section subject to
the limitations contained in this section, except that such child shall not
be entitled to recover any benefits not received after the termination of
benefits by reason of such child's marriage but before the effective date
of this act.

    (3) Upon the death of a member prior to retirement, if no benefits
are payable under the provisions of subsection (1) or (2), the sum of the
member's accumulated contributions shall be paid to the member's ben-
eficiary.

    (4) All payments due under this section to a minor shall be made to
a legally appointed conservator of such minor as provided in subsection
(7) of K.S.A. 74-4902 and amendments thereto.

    Sec. 72. K.S.A. 1997 Supp. 74-4960 is hereby amended to read as
follows: 74-4960. (1) If any active contributing member becomes totally
and permanently disabled due to service-connected causes as defined in
subsection (10) of K.S.A. 74-4952 and amendments thereto, such mem-
ber shall be retired and the following benefits shall become payable and
shall continue until the member's death or until the member recovers
from the disability if: A report of the event in a form acceptable to the
board is filed in the office of the executive secretary of the board within
220 days after the date of the event or act of duty causing such disability;
and an application for such benefit, in such form and manner as the board
prescribes, is filed by the member or the member's authorized represen-
tative in the office of the executive secretary of the board within two years
of the date of disability:

    (a) On and after July 1, 1993, the member shall receive a retirement
benefit equal to 50% of the member's final average salary or, if the mem-
ber has no dependents, as defined in subsection (1)(b), the retirement
benefit the member would have been entitled to as provided under K.S.A.
74-4958 and amendments thereto had the member retired, whichever is
greater. Such benefit shall accrue from the day upon which the member
ceases to draw compensation.

    (b) Each of the member's children under the age of 18 years or each
of the member's children under the age of 23 years who is a full-time
student as provided in K.S.A. 74-49,117 and amendments thereto shall
receive an annual benefit equal to 10% of the member's final average
salary. Such benefit shall accrue from the day upon which the member
ceases to draw compensation and shall end on the last day of the month
in which each such child or children shall attain the age of 18 years or
die, whichever occurs earlier or in which such children attain the age of
23 years, if such child is a full-time student as provided in K.S.A. 74-
49,117 and amendments thereto. Commencing on the effective date of
this act, any child who was receiving benefits pursuant to this section and
who had such benefits terminated by reason of such child's marriage,
shall be entitled to once again receive benefits pursuant to this section
subject to the limitations contained in this section, except that such child
shall not be entitled to recover any benefits not received after the ter-
mination of benefits by reason of such child's marriage but before the
effective date of this act.

    (c) In no case shall the total of the benefits payable under paragraphs
(a) and (b) of this subsection (1) be in excess of 75% of the member's
final average salary.

    (d) In the event a member who is retired under subsection (1) dies
within two years after the date of such retirement and no benefits are
payable under subsection (3) of K.S.A. 74-4958 and amendments thereto,
then benefits may be payable under subsection (1) of K.S.A. 74-4959 and
amendments thereto.

    (e) In the event a member who is retired under subsection (1) dies
more than two years after the date of such retirement, and the proximate
cause of such death is the service-connected cause from which the disa-
bility resulted and no benefits are payable under subsection (3) of K.S.A.
74-4958 and amendments thereto, then benefits may be payable under
subsection (1) of K.S.A. 74-4959 and amendments thereto. The provisions
of this paragraph (e) of this subsection (1) shall apply in all cases of such
members who die after June 30, 1978.

    (f) In the event a member who is retired under subsection (1) dies
after the date of such retirement, and no benefits are payable under
paragraphs (d) and (e) of subsection (1), nor under subsection (3) of
K.S.A. 74-4958 and amendments thereto, the following benefits shall be
payable:

    (i) To the member's spouse, if lawfully wedded to the member at the
time of the member's death, a lump-sum benefit equal to 50% of the
member's final average salary at the time of the member's retirement.

    (ii) To the member's spouse, if lawfully wedded to the member at
the time of the member's death, an annual benefit equal to 50% of the
member's retirement benefit payable in monthly installments, to accrue
from the first day of the month following the member's date of death and
ending on the last day of the month in which the spouse dies. Com-
mencing on the effective date of this act, any surviving spouse, who was
receiving benefits pursuant to this section and who had such benefits
terminated by reason of such spouse's remarriage, shall be entitled to
once again receive benefits pursuant to this section, except that such
surviving spouse shall not be entitled to recover any benefits not received
after the termination of benefits by reason of such surviving spouse's
remarriage but before the effective date of this act. If there is no surviving
spouse, or if after the death of the spouse there remain one or more
children under the age of 18 years or one or more children under the age
of 23 years who is a full-time student as provided in K.S.A. 74-49,117 and
amendments thereto, the annual spouse's benefit shall be payable, subject
to the provisions of section 83 and amendments thereto, in equal shares
to such children and each child's share shall end on the last day of the
month in which such child attains the age of 18 years or dies, whichever
occurs earlier or in which such child attains the age of 23 years, if such
child is a full-time student as provided in K.S.A. 74-49,117 and amend-
ments thereto. Commencing on the effective date of this act, any child
who was receiving benefits pursuant to this section and who had such
benefits terminated by reason of such child's marriage, shall be entitled
to once again receive benefits pursuant to this section subject to the lim-
itations contained in this section, except that such child shall not be en-
titled to recover any benefits not received after the termination of benefits
by reason of such child's marriage but before the effective date of this
act.

    The provisions of paragraph (f) of subsection (1) shall apply in all cases
of such members who die after December 1, 1984.

    (2) (a) If any active contributing member, prior to such member's
normal retirement, becomes totally and permanently disabled for a period
of 180 days from causes not service-connected, and not as the result of a
willfully negligent or intentional act of the member, such member shall
be retired and the following benefit shall become payable and shall con-
tinue until the member's death or until the member recovers from such
disability, whichever occurs first, if a report of the disability in a form
acceptable to the board is filed in the office of the executive secretary of
the board within 220 days after the date of the commencement of such
disability and if an application for such benefit in such form and manner
as the board shall prescribe is filed in the office of the executive secretary
of the board within two years of the date of disability:

    A retirement benefit equal to 2.5% of the member's final average salary
multiplied by the number of years of credited service or the retirement
benefit the member would have been entitled to as provided under K.S.A.
74-4958 and amendments thereto had the member retired, whichever is
greater, multiplied by the number of years of credited service except that
such retirement benefit shall be at least equal to 25% of the member's
final average salary but shall not exceed the amount of the retirement
benefit provided in paragraph (a) of subsection (1). Such benefit shall not
become payable until satisfactory evidence shall be presented to the board
that the member is and has been totally and permanently disabled for a
period of 180 days, but benefits shall accrue from the day upon which
the member ceases to draw compensation.

    (b) In the event a member who is retired under subsection (2) dies
after the date of such retirement, and no benefits are payable under
subsection (3) of K.S.A. 74-4958 and amendments thereto, the following
benefits shall be payable:

    (i) To the member's spouse, if lawfully wedded to the member at the
time of the member's death, a lump-sum benefit equal to 50% of the
member's final average salary at the time of the member's retirement.

    (ii) To the member's spouse, if lawfully wedded to the member at
the time of the member's death, an annual benefit equal to 50% of the
member's retirement benefit payable in monthly installments, to accrue
from the first day of the month following the member's date of death and
ending on the last day of the month in which the spouse dies. Com-
mencing on the effective date of this act, any surviving spouse, who was
receiving benefits pursuant to this section and who had such benefits
terminated by reason of such spouse's remarriage, shall be entitled to
once again receive benefits pursuant to this section, except that such
surviving spouse shall not be entitled to recover any benefits not received
after the termination of benefits by reason of such surviving spouse's
remarriage but before the effective date of this act. If there is no surviving
spouse, or if after the death of the spouse there remain one or more
children under the age of 18 years or one or more children under the age
of 23 years who are full-time students as provided in K.S.A. 74-49,117
and amendments thereto, the annual spouse's benefit shall be payable,
subject to the provisions of section 83 and amendments thereto, in equal
shares to such children and each child's share shall end on the last day of
the month in which such child attains the age of 18 years or dies, which-
ever occurs earlier or in which such child attains the age of 23 years, if
such child is a full-time student as provided in K.S.A. 74-49,117 and
amendments thereto. Commencing on the effective date of this act, any
child who was receiving benefits pursuant to this section and who had
such benefits terminated by reason of such child's marriage, shall be en-
titled to once again receive benefits pursuant to this section subject to
the limitations contained in this section, except that such child shall not
be entitled to recover any benefits not received after the termination of
benefits by reason of such child's marriage but before the effective date
of this act.

    The provisions of paragraph (b) of subsection (2) shall apply in all cases
of such members who die after July 1, 1989.

    (3) Any member who was employed for compensation by an em-
ployer other than the member's participating employer and whose disa-
bility was incurred in the course of such other employment shall not be
eligible for any of the benefits provided in subsection (2).

    (4) If a member becomes totally and permanently disabled and no
benefits are payable under subsection (1) or (2), the sum of the member's
accumulated contributions shall be paid to the member.

    (5) Any member receiving benefits under this section shall submit to
medical examination, not oftener than annually, by one or more physicians
or any other practitioners of the healing arts holding a valid license issued
by Kansas state board of healing arts, as the board of trustees may direct.
If upon such medical examination, the examiner's report to the board that
the retirant is physically able and capable of resuming employment with
the participating employer from whose employment such member re-
tired, the disability benefits shall terminate. A retirant who has been re-
ceiving benefits under the provisions of this section and who returns to
employment of a participating employer shall immediately commence
accruing service credit which shall be added to that which has been ac-
crued by virtue of previous service.

    (6) Any retirant who has been receiving benefits under the provisions
of this section for a period of five years shall be deemed finally retired
and shall not be subject to further medical examinations, except that if
the board of trustees shall have reasonable grounds to question whether
the retirant remains totally and permanently disabled, a further medical
examination or examinations may be required.

    (7) Refusal or neglect to submit to examination as provided in sub-
section (5) shall be sufficient cause for suspending or discontinuing ben-
efit payments under this section and if such refusal or neglect shall con-
tinue for a period of one year, the member's rights in and to all benefits
under this system may be revoked by the board.

    (8) Any retirement benefits payable under the provisions of this sec-
tion shall be in lieu of normal retirement benefits as provided in subsec-
tions (1) and (2) of K.S.A. 74-4958 and amendments thereto.

    (9) Each member shall report to such member's participating em-
ployer any event or act of duty causing disability within 200 days after
such event or act of duty. The member's participating employer shall file
in the office of the executive secretary of the board, in a form acceptable
to the board, a report of the event or act of duty causing disability within
220 days after the event or act of duty.

    (10) In any case of any event occurring prior to July 1, 1979, for which
a report of the event was made by the participating employer to the
director of workers' compensation in accordance with K.S.A. 44-557 and
amendments thereto, such report to the director of workers' compensa-
tion shall satisfy the requirement under subsection (1) of this section to
file a report of such event, in a form acceptable to the board within 220
days. No such report to the director of workers' compensation shall be
deemed to satisfy such requirement with respect to events occurring on
or after July 1, 1979.

    (11) All payments due under this section to a minor shall be made to
a legally appointed conservator of such minor.

    (12) The provisions of this section shall apply only to members who
were appointed or employed prior to July 1, 1989, and who did not make
an election pursuant to K.S.A. 74-4955a and amendments thereto.

    Sec. 73. K.S.A. 1997 Supp. 74-4960a is hereby amended to read as
follows: 74-4960a. (1) If any active contributing member who is appointed
or employed on or after July 1, 1989, or who makes an election pursuant
to K.S.A. 74-4955a and amendments thereto to be covered by the pro-
visions of this act becomes disabled as defined in subsection (2), such
member shall receive a monthly benefit equal to 50% of the member's
final average salary at the time such member was disabled payable in
monthly installments, accruing from the first day upon which the member
ceases to draw compensation, if a report of the disability in such form
and manner as the board shall prescribe is filed in the office of the ex-
ecutive secretary of the board within 220 days after the date of the com-
mencement of such disability and if an application for such benefit in
such form and manner as the board shall prescribe is filed in the office
of the executive secretary of the board within two years of the date of the
commencement of such disability.

    (2) For the purposes of this section, ``disabled'' means total inability
to perform permanently the duties of the position of policeman or fire-
man.

    (3) In the event a member who is disabled and entitled to such ben-
efits as provided in subsection (1) dies after the date of such disability,
and no benefits are payable under subsection (3) of K.S.A. 74-4958 and
amendments thereto, the following benefits shall be payable:

    (i) To the member's spouse, if lawfully wedded to the member at the
time of the member's death, a lump-sum benefit equal to 50% of the
member's final average salary at the time such member was disabled.

    (ii) To the member's spouse, if lawfully wedded to the member at
the time of the member's death, an annual benefit equal to 50% of the
member's benefit payable in monthly installments, to accrue from the
first day of the month following the member's date of death and ending
on the last day of the month in which the spouse dies. Commencing on
the effective date of this act, any surviving spouse, who was receiving
benefits pursuant to this section and who had such benefits terminated
by reason of such spouse's remarriage, shall be entitled to once again
receive benefits pursuant to this section, except that such surviving spouse
shall not be entitled to recover any benefits not received after the ter-
mination of benefits by reason of such surviving spouse's remarriage but
before the effective date of this act. If there is no surviving spouse, or if
after the death of the spouse there remain one or more children under
the age of 18 years or one or more children under the age of 23 years
who is a full-time student as provided in K.S.A. 74-49,117 and amend-
ments thereto, the annual spouse's benefit shall be payable, subject to the
provisions of section 83 and amendments thereto, in equal shares to such
children and each child's share shall end on the last day of the month in
which such child attains the age of 18 years or dies, whichever occurs
earlier or in which such child attains the age of 23 years, if such child is
a full-time student as provided in K.S.A. 74-49,117 and amendments
thereto. Commencing on the effective date of this act, any child who was
receiving benefits pursuant to this section and who had such benefits
terminated by reason of such child's marriage, shall be entitled to once
again receive benefits pursuant to this section subject to the limitations
contained in this section, except that such child shall not be entitled to
recover any benefits not received after the termination of benefits by
reason of such child's marriage but before the effective date of this act.

    (4) Any member who was employed for compensation by an em-
ployer other than the member's participating employer and whose disa-
bility was incurred in the course of such other employment shall not be
eligible for any of the benefits provided in subsection (1) or (3).

    (5) If a member becomes totally and permanently disabled and no
benefits are payable under subsection (1), the sum of the member's ac-
cumulated contributions shall be paid to the member.

    (6) Any member receiving benefits under this section shall submit to
medical examination, not oftener than annually, by one or more physicians
or any other practitioners of the healing arts holding a valid license issued
by Kansas state board of healing arts, as the board of trustees may direct.
If upon such medical examination, the examiner's report to the board that
the member is physically able and capable of resuming employment with
the participating employer from whose employment such member was
employed prior to such member's disability, the disability benefits shall
terminate. A member who has been receiving benefits under the provi-
sions of this section and who returns to employment of a participating
employer shall immediately commence accruing service credit which shall
be added to that which has been accrued by virtue of previous service.

    (7) Any member who has been receiving benefits under the provi-
sions of this section for a period of five years shall be deemed permanent
and shall not be subject to further medical examinations, except that if
the board of trustees shall have reasonable grounds to question whether
the member remains totally and permanently disabled, a further medical
examination or examinations may be required.

    (8) Refusal or neglect to submit to examination as provided in sub-
section (6) shall be sufficient cause for suspending or discontinuing ben-
efit payments under this section and if such refusal or neglect shall con-
tinue for a period of one year, the member's rights in and to all benefits
under this system may be revoked by the board.

    (9) In the event that a member becomes disabled and is eligible for
benefits provided in this section, such member shall be given participating
service credit for the entire period of such disability.

    (10) Any member who is receiving benefits pursuant to this section
shall file annually a statement of earnings for the previous year in such
form and manner as the board shall prescribe. Any disability benefit paid
to a member entitled to such benefit pursuant to this section shall be
reduced by the board in an amount equal to a $1 reduction in such benefit
for every $2 of earnings of such member which were earned during the
previous year while such member was disabled. Such reduction shall ap-
ply only to a member's earnings which exceed $10,000.

    (11) Any benefits provided pursuant to this section and any partici-
pating service credit given pursuant to subsection (9) shall terminate upon
the earliest date such member is eligible for retirement upon attainment
of the normal retirement date as provided in K.S.A. 74-4964a and amend-
ments thereto.

    (12) Any member who has received benefits under the provisions of
this section for a period of five years or more immediately preceding
retirement shall have such member's final average salary adjusted upon
retirement by the actuarial salary assumption rates in existence during
such period. Effective July 1, 1993, each member's current annual rate
shall be adjusted upon retirement by 5% for each year of disability after
July 1, 1993.

    (13) All payments due under this section to a minor shall be made to
a legally appointed conservator of such minor.

    (14) The provisions of this section shall be effective on and after July
1, 1989 and shall apply only to members who were appointed or employed
prior to July 1, 1989, and who made an election pursuant to K.S.A. 74-
4955a and amendments thereto; and persons appointed or employed on
or after July 1, 1989.

    Sec. 74. K.S.A. 74-4962 is hereby amended to read as follows: 74-
4962. (1) All benefits except lump-sum benefits as provided herein in this
subsection shall be payable in equal monthly installments: Provided,, ex-
cept that the board may provide for payment of benefits to a member's
family in a single payment rather than separate payments to the member,
to the widow or to minor children.

    (2) Whenever the amount of any benefit is to be determined on the
basis of actuarial assumptions, the assumptions shall be specified by the
board in a way that precludes employer discretion.

    Sec. 75. K.S.A. 1997 Supp. 74-4963 is hereby amended to read as
follows: 74-4963. (1) Upon termination of employment prior to the com-
pletion of 20 years of credited service, a member may withdraw such
member's accumulated contributions or elect to leave such accumulated
contributions on deposit with the system. If the member elects to leave
the accumulated contributions on deposit with the system and if the
member returns to employment with the same or another participating
employer within five years, such member shall receive credit for such
member's service prior to such termination. If the member does not elect
to leave the accumulated contributions on deposit or if the member does
not return to covered employment within five years, such member shall
no longer be a member of the system and the sum of such member's
accumulated contributions then on deposit with this system shall be paid
to such member after making application in a form prescribed by the
board and after the system has a reasonable time to process the appli-
cation for withdrawal. Upon proper notification by the system, member
contributions not on deposit with the system shall be paid to the member
by the participating employer.

    (2) If, after termination and withdrawal of accumulated contribu-
tions, a former member returns to covered employment, except as oth-
erwise provided in subsection (1), the former member shall become a
member of the system as provided in subsection (2) of K.S.A. 74-4955
and amendments thereto. Any former member returning to covered em-
ployment may, at the former member's option, pay to the system within
31 days of the former member's return to covered employment, the total
of the former member's withdrawn accumulated contributions plus in-
terest at a rate specified by the board, in which case the member shall
receive full credit for the member's service prior to the member's ter-
mination. Subject to the provisions of section 83 and amendments thereto,
members who do not elect to repay within 31 days of return to covered
employment may elect to purchase previously forfeited service any time
prior to retirement. Such purchase shall be made by a lump-sum payment
equal to 1.75% of the member's current annual salary for each quarter
of previously forfeited participating service which the member elects to
repurchase. Upon receipt of such payment by the system the member
shall receive full credit for the number of previously forfeited quarters of
participating service which the member has elected to repurchase. Any
member who repurchases all of the member's previously forfeited par-
ticipating service credit shall also receive all of the member's previously
forfeited prior service credit.

    (3) Upon termination and withdrawal of accumulated contributions,
any member whose employment was, up to the member's employer's
entry date, covered by a pension system established under the provisions
of K.S.A. 13-14a01 through 13-14a14, and amendments thereto, or K.S.A.
14-10a01 through 14-10a15, and amendments thereto, shall be entitled
to receive from the member's employer the sum of the member's accu-
mulated contributions to the previous pension system.

    (4) If a member has completed 20 years of credited service at date
of termination, the member shall be granted automatically a vested re-
tirement benefit in the system, but any time prior to the commencement
of retirement benefit payments and before attaining age 55 the member
may withdraw the member's accumulated contributions, whereupon the
member's membership in this system ceases and no other amounts shall
be payable for the member's prior and participating service credit. Eli-
gibility of such member, who has not withdrawn the member's accumu-
lated contributions, for retirement benefits and procedures for making
application for retirement benefits shall be in accordance with K.S.A. 74-
4957 and amendments thereto, except that in lieu of the three-month
notice of intention to retire being made to the employer, such member
shall make application for retirement in a form prescribed by the board
and retirement benefits shall accrue from the first day of the month fol-
lowing receipt of such application. The amount of the retirement benefit
shall be determined as provided in K.S.A. 74-4958 and amendments
thereto.

    (5) If a member, who has a vested retirement benefit, again becomes
an employee of a participating employer, the amount of the member's
vested retirement benefit shall remain in effect, and any retirement ben-
efit such member subsequently accrues shall be calculated separately
based on credited service after again becoming an employee and shall be
added to that which had been vested by virtue of previous service. Eli-
gibility of such member for retirement benefits and procedures for mak-
ing application for retirement benefits shall be in accordance with K.S.A.
74-4957 and amendments thereto.

    (6) Any member of this system who was previously a member of the
Kansas public employees retirement system or the retirement system for
judges and who forfeited service credit under either of those systems by
reason of termination of employment and withdrawal of their contribu-
tions to that system, may elect, subject to the provisions of section 83 and
amendments thereto, to purchase service credit for the previously for-
feited service credit by means of a single lump-sum payment and such
service shall be recredited to that system. The amount of the lump-sum
payment shall be determined by the actuary using the member's then
current annual rate of compensation and the actuarial assumptions and
tables then currently in use by that retirement system.

    (7) The provisions of this section shall apply only to members who
were appointed or employed prior to July 1, 1989, and who did not make
an election pursuant to K.S.A. 74-4955a and amendments thereto.

    Sec. 76. K.S.A. 1997 Supp. 74-4963a is hereby amended to read as
follows: 74-4963a. (1) Upon termination of employment prior to the com-
pletion of 15 years of credited service, a member may withdraw such
member's accumulated contributions or elect to leave such accumulated
contributions on deposit with the system. If the member elects to leave
the accumulated contributions on deposit with the system and if the
member returns to employment with the same or another participating
employer within five years, such member shall receive credit for such
member's service prior to such termination. If the member does not elect
to leave the accumulated contributions on deposit or if the member does
not return to covered employment within five years, such member shall
no longer be a member of the system and the sum of such member's
accumulated contributions then on deposit with this system shall be paid
to such member after making application in a form prescribed by the
board and after the system has a reasonable time to process the appli-
cation for withdrawal. Upon proper notification by the system, member
contributions not on deposit with the system shall be paid to the member
by the participating employer.

    (2) If, after termination and withdrawal of accumulated contribu-
tions, a former member returns to covered employment, except as oth-
erwise provided in subsection (1), the former member shall become a
member of the system as provided in subsection (2) of K.S.A. 74-4955
and amendments thereto. Any former member returning to covered em-
ployment may, at the former member's option, pay to the system within
31 days of the former member's return to covered employment, the total
of the former member's withdrawn accumulated contributions plus in-
terest at a rate specified by the board, in which case the member shall
receive full credit for the member's service prior to the member's ter-
mination. Subject to the provisions of section 83 and amendments thereto,
members who do not elect to repay within 31 days of return to covered
employment may elect to purchase previously forfeited service any time
prior to retirement. Such purchase shall be made by a lump-sum payment
equal to 1.75% of the member's current annual salary for each quarter
of previously forfeited participating service which the member elects to
repurchase. Upon receipt of such payment by the system the member
shall receive full credit for the number of previously forfeited quarters of
participating service which the member has elected to repurchase. Any
member who repurchases all of the member's previously forfeited par-
ticipating service credit shall also receive all of the member's previously
forfeited prior service credit.

    (3) Upon termination and withdrawal of accumulated contributions,
any member whose employment was, up to the member's employer's
entry date, covered by a pension system established under the provisions
of K.S.A. 13-14a01 to through 13-14a14, and amendments thereto, or
K.S.A. 14-10a01 to through 14-10a15, and amendments thereto, shall be
entitled to receive from the member's employer the sum of the member's
accumulated contributions to the previous pension system.

    (4) If a member has completed 15 years of credited service at date
of termination, the member shall be granted automatically a vested re-
tirement benefit in the system, but any time prior to the commencement
of retirement benefit payments and before attaining age 55 the member
may withdraw the member's accumulated contributions, whereupon the
member's membership in this system ceases and no other amounts shall
be payable for the member's prior and participating service credit. Eli-
gibility of such member, who has not withdrawn the member's accumu-
lated contributions, for retirement benefits and procedures for making
application for retirement benefits shall be in accordance with K.S.A. 74-
4957 and amendments thereto, except that in lieu of the three-month
notice of intention to retire being made to the employer, such member
shall make application for retirement in a form prescribed by the board
and retirement benefits shall accrue from the first day of the month fol-
lowing receipt of such application. The amount of the retirement benefit
shall be determined as provided in K.S.A. 74-4958 and amendments
thereto.

    (5) If a member, who has a vested retirement benefit, again becomes
an employee of a participating employer, the amount of the member's
vested retirement benefit shall remain in effect, and any retirement ben-
efit such member subsequently accrues shall be calculated separately
based on credited service after again becoming an employee and shall be
added to that which had been vested by virtue of previous service. Eli-
gibility of such member for retirement benefits and procedures for mak-
ing application for retirement benefits shall be in accordance with K.S.A.
74-4957 and amendments thereto.

    (6) Any member of this system who was previously a member of the
Kansas public employees retirement system or the retirement system for
judges and who forfeited service credit under either of those systems by
reason of termination of employment and withdrawal of their contribu-
tions to that system, may elect, subject to the provisions of section 83 and
amendments thereto, to purchase service credit for the previously for-
feited service credit by means of a single lump-sum payment and such
service shall be recredited to that system. The amount of the lump-sum
payment shall be determined by the actuary using the member's then
current annual rate of compensation and the actuarial assumptions and
tables then currently in use by that retirement system.

    (7) The provisions of this section shall be effective on and after July
1, 1989 and shall apply only to members who were appointed or employed
prior to July 1, 1989, and who made an election pursuant to K.S.A. 74-
4955a and amendments thereto; and persons appointed or employed on
or after July 1, 1989.

    Sec. 77. K.S.A. 1997 Supp. 74-4964 is hereby amended to read as
follows: 74-4964. (1) A member may elect to have such member's retire-
ment benefit paid under one of the options provided in this section in
lieu of having it paid in the form stated in subsections (1) and (2) of K.S.A.
74-4958 and amendments thereto. Such election must be made before
the date of actual retirement. Only a specific individual person may be
designated as a joint annuitant at the time of election of the joint and 1/2
to joint annuitant survivor option, the joint and survivor option and the
joint and 3/4 to joint annuitant survivor option. Under no circumstances
may an option be changed or canceled nor the named joint annuitant
changed after the date of actual retirement of the member.

    (2) The amount of a retirement benefit payable under an option shall
be based on the age of the member and, if applicable, the age of the joint
annuitant, and shall be such amount as to be the actuarial equivalent of
the retirement benefit otherwise payable under subsections (1) or (2) of
K.S.A. 74-4958 and amendments thereto as prescribed under subsection
(5). In no case shall the total amount of retirement benefit paid under
any option provided in this section be more than 100% of the retirement
benefit which would have been otherwise payable if no option had been
elected under this section.

    (3) If a member who was, up to the entry date of such member's
employer, covered by a pension system under the provisions of K.S.A.
13-14a01 to 13-14a14, inclusive or 14-10a01 to through 14-10a15, inclu-
sive, and amendments thereto so elects one of the options under this
section, payment of such option shall be in lieu of any payments provided
in subsection (3) of K.S.A. 74-4958 and amendments thereto.

    (4) Such election of an option shall become null and void upon the
death of a member prior to such member's retirement, except that if a
member, who is eligible to retire in accordance with the provisions of
subsections (1) and (2) of K.S.A. 74-4958 and amendments thereto, dies
without having actually retired the member's spouse, if the spouse is
beneficiary for the member's accumulated contributions, and no benefits
are payable under subsections (1) and (2) of K.S.A. 74-4959 and amend-
ments thereto, may elect to receive benefits under one of the options
provided in this section, in lieu of receiving the member's accumulated
contributions.

    (5) The following retirement options which are subject to the provi-
sions of section 83 and amendments thereto, are available:

    (A) Joint and 1/2 to joint annuitant survivor. A reduced retirement
benefit is payable to the retirant during the retirant's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment annuity otherwise payable under K.S.A. 74-4958 and amendments
thereto and (B) the percentage equal to 94.5% minus .2% for each year
by which the age of the retirant's joint annuitant is less than the retirant's
age, computed to the nearest whole year, or plus .2% for each year by
which the age of the retirant's joint annuitant is more than the retirant's
age, computed to the nearest whole year, with 1/2 of that monthly amount
continued to the retirant's joint annuitant during such joint annuitant's
remaining lifetime, if any, after the death of the retirant. In the event that
the designated joint annuitant under this option predeceases the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under this option shall be adjusted automatically to the retirement benefit
which the retirant would have received if no option had been elected
under this section.

    (B) Joint and survivor. A reduced retirement benefit is payable to
the retirant during the retirant's lifetime in a monthly amount equal to
the product of (A) the monthly payment of the retirement annuity oth-
erwise payable under K.S.A. 74-4958 and amendments thereto and (B)
the percentage equal to 88% minus .4% for each year by which the age
of the retirant's joint annuitant is less than the retirant's age, computed
to the nearest whole year, or plus .4% for each year by which the age of
the retirant's joint annuitant is more than the retirant's age, computed to
the nearest whole year, with that monthly amount continued to the joint
annuitant during the joint annuitant's remaining lifetime, if any, after the
death of retirant. In the event that the designated joint annuitant under
this option predeceases the retirant, the amount of the retirement benefit
otherwise payable to the retirant under this option shall be adjusted au-
tomatically to the retirement benefit which the retirant would have re-
ceived if no option had been elected under this section.

    (C) Joint and 3/4 to joint annuitant survivor. A reduced retirement
benefit is payable to the retirant during the retirant's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment annuity otherwise payable under K.S.A. 74-4958 and amendments
thereto and (B) the percentage equal to 91% minus .3% for each year by
which the age of the retirant's joint annuitant is less than the retirant's
age, computed to the nearest whole year, or plus .3% for each year by
which the age of the retirant's joint annuitant is more than the retirant's
age, computed to the nearest whole year, with 3/4 of that monthly amount
continued to the retirant's joint annuitant during such joint annuitant's
remaining lifetime, if any, after the death of the retirant. In the event that
the designated joint annuitant under this option predeceases the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under this option shall be adjusted automatically to the retirement benefit
which the retirant would have received if no option had been elected
under this section.

    (D) Life with 5 years certain. A reduced retirement benefit is payable
to the retirant during the retirant's lifetime in a monthly amount equal
to 99% of the monthly payment of the retirement benefit otherwise pay-
able under K.S.A. 74-4958 and amendments thereto, and if the retirant
dies within the five-year certain period, measured from the commence-
ment of retirement benefit payments, such payments will be continued
to the retirant's beneficiary during the balance of the five-year certain
period.

    (E) Life with 10 years certain. A reduced retirement benefit is pay-
able to the retirant during the retirant's lifetime in a monthly amount
equal to 98% of the monthly payment of the retirement benefit otherwise
payable under K.S.A. 74-4958 and amendments thereto, and if the retir-
ant dies within the ten-year certain period, measured from the com-
mencement of retirement benefit payments, such payments will be con-
tinued to the retirant's beneficiary during the balance of the ten-year
certain period.

    (F) Life with 15 years certain. A reduced retirement benefit is pay-
able to the retirant during the retirant's lifetime in a monthly amount
equal to 92% of the monthly payment of the retirement benefit otherwise
payable under K.S.A. 74-4958 and amendments thereto, and if the retir-
ant dies within the fifteen-year certain period, measured from the com-
mencement of retirement benefit payments, such payments will be con-
tinued to the retirant's beneficiary during the balance of the fifteen-year
certain period.

    (6) On and after July 1, 1996, if a member with 20 or more years of
credited service dies before attaining retirement age, the member's
spouse, if the spouse is the sole beneficiary for the member's accumulated
contributions, may elect to receive benefits under one of the options
provided in this section in lieu of receiving the member's accumulated
contributions or in lieu of receiving benefits as provided in K.S.A. 74-
4959 and amendments thereto. Payments under one of the options pro-
vided in this section to the member's spouse if so elected, shall commence
on the date that the member would have attained retirement age.

    (7) Benefits payable to a joint annuitant shall accrue from the first
day of the month following the death of a member or retirant and, in the
case of the joint and 1/2 to joint annuitant survivor option, the joint and
survivor option and the joint and 3/4 to joint annuitant survivor option,
shall end on the last day of the month in which the joint annuitant dies.

    (8) The provisions of the law in effect on the retirement date of a
member under the system shall govern the retirement benefit payable to
the retirant and any joint annuitant, except, for retirement benefits pay-
able after July 1, 1993, for retirants who retired prior to July 1, 1982, in
the event that the designated joint annuitant under the option provided
in subsection (5)(A), (B) or (C), as applicable, predeceased the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under the option provided in subsection (5)(A), (B) or (C), as applicable,
shall be adjusted automatically to the retirement benefit which the retir-
ant would have received if no option had been elected under this section.

    (9) Upon the death of a joint annuitant who is receiving a retirement
benefit under the provisions of this section, there shall be paid to such
joint annuitant's beneficiary an amount equal to the excess, if any, of the
accumulated contributions of the retirant over the sum of all retirement
benefit payments made to such retirant and such joint annuitant. Such
joint annuitant shall designate a beneficiary by filing in the office of the
retirement system such designation at the time of death of the retirant.
If there is no named beneficiary of such joint annuitant living at the time
of death of such joint annuitant, any amount provided for by this section
shall be paid to, in order of preference as follows:

    (A) The joint annuitant's surviving spouse;

    (B) the joint annuitant's dependent child or children;

    (C) the joint annuitant's dependent parent or parents;

    (D) the joint annuitant's nondependent child or children;

    (E) the joint annuitant's nondependent parent or parents; or

    (F) the estate of the deceased joint annuitant.

    (10) The provisions of this section shall apply only to members who
were appointed or employed prior to July 1, 1989, and who did not make
an election pursuant to K.S.A. 74-4955a and amendments thereto.

    Sec. 78. K.S.A. 1997 Supp. 74-4964a is hereby amended to read as
follows: 74-4964a. (1) A member may elect to have such member's re-
tirement benefit paid under one of the options provided in this section
in lieu of having it paid in the form stated in subsections (1) and (2) of
K.S.A. 74-4958 and amendments thereto. Such election must be made
before the date of actual retirement. Only a specific individual person
may be designated as a joint annuitant at the time of election of the joint
and 1/2 to joint annuitant survivor option, the joint and survivor option
and the joint and 3/4 to joint annuitant survivor option. Under no circum-
stances may an option be changed or canceled nor the named joint an-
nuitant changed after the date of actual retirement of the member.

    (2) The amount of a retirement benefit payable under an option shall
be based on the age of the member and, if applicable, the age of the joint
annuitant, and shall be such amount as to be the actuarial equivalent of
the retirement benefit otherwise payable under subsections (1) or (2) of
K.S.A. 74-4958 and amendments thereto as prescribed under subsection
(5). In no case shall the total amount of retirement benefit paid under
any option provided in this section be more than 100% of the retirement
benefit which would have been otherwise payable if no option had been
elected under this section.

    (3) If a member who was, up to the entry date of such member's
employer, covered by a pension system under the provisions of K.S.A.
13-14a01 to through 13-14a14, inclusive or 14-10a01 to through 14-
10a15, inclusive, and amendments thereto so elects one of the options
under this section, payment of such option shall be in lieu of any payments
provided in subsection (3) of K.S.A. 74-4958 and amendments thereto.

    (4) Such election of an option shall become null and void upon the
death of a member prior to such member's retirement, except that if a
member, who is eligible to retire in accordance with the provisions of
subsections (1) and (2) of K.S.A. 74-4958 and amendments thereto, dies
without having actually retired the member's spouse, if the spouse is
beneficiary for the member's accumulated contributions, and no benefits
are payable under subsections (1) and (2) of K.S.A. 74-4959 and amend-
ments thereto, may elect to receive benefits under one of the options
provided in this section, in lieu of receiving the member's accumulated
contributions.

    (5) The following retirement options which are subject to the provi-
sions of section 83 and amendments thereto, are available:

    (A) Joint and 1/2 to joint annuitant survivor. A reduced retirement
benefit is payable to the retirant during the retirant's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment annuity otherwise payable under K.S.A. 74-4958 and amendments
thereto and (B) the percentage equal to 94.5% minus .2% for each year
by which the age of the retirant's joint annuitant is less than the retirant's
age, computed to the nearest whole year, or plus .2% for each year by
which the age of the retirant's joint annuitant is more than the retirant's
age, computed to the nearest whole year, with 1/2 of that monthly amount
continued to the retirant's joint annuitant during such joint annuitant's
remaining lifetime, if any, after the death of the retirant. In the event that
the designated joint annuitant under this option predeceases the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under this option shall be adjusted automatically to the retirement benefit
which the retirant would have received if no option had been elected
under this section.

    (B) Joint and survivor. A reduced retirement benefit is payable to
the retirant during the retirant's lifetime in a monthly amount equal to
the product of (A) the monthly payment of the retirement annuity oth-
erwise payable under K.S.A. 74-4958 and amendments thereto and (B)
the percentage equal to 88% minus .4% for each year by which the age
of the retirant's joint annuitant is less than the retirant's age, computed
to the nearest whole year, or plus .4% for each year by which the age of
the retirant's joint annuitant is more than the retirant's age, computed to
the nearest whole year, with that monthly amount continued to the joint
annuitant during the joint annuitant's remaining lifetime, if any, after the
death of retirant. In the event that the designated joint annuitant under
this option predeceases the retirant, the amount of the retirement benefit
otherwise payable to the retirant under this option shall be adjusted au-
tomatically to the retirement benefit which the retirant would have re-
ceived if no option had been elected under this section.

    (C) Joint and 3/4 to joint annuitant survivor. A reduced retirement
benefit is payable to the retirant during the retirant's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment annuity otherwise payable under K.S.A. 74-4958 and amendments
thereto and (B) the percentage equal to 91% minus .3% for each year by
which the age of the retirant's joint annuitant is less than the retirant's
age, computed to the nearest whole year, or plus .3% for each year by
which the age of the retirant's joint annuitant is more than the retirant's
age, computed to the nearest whole year, with 3/4 of that monthly amount
continued to the retirant's joint annuitant during such joint annuitant's
remaining lifetime, if any, after the death of the retirant. In the event that
the designated joint annuitant under this option predeceases the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under this option shall be adjusted automatically to the retirement benefit
which the retirant would have received if no option had been elected
under this section.

    (D) Life with 5 years certain. A reduced retirement benefit is payable
to the retirant during the retirant's lifetime in a monthly amount equal
to 99% of the monthly payment of the retirement benefit otherwise pay-
able under K.S.A. 74-4958 and amendments thereto, and if the retirant
dies within the five-year certain period, measured from the commence-
ment of retirement benefit payments, such payments will be continued
to the retirant's beneficiary during the balance of the five-year certain
period.

    (E) Life with 10 years certain. A reduced retirement benefit is pay-
able to the retirant during the retirant's lifetime in a monthly amount
equal to 98% of the monthly payment of the retirement benefit otherwise
payable under K.S.A. 74-4958 and amendments thereto, and if the retir-
ant dies within the ten-year certain period, measured from the com-
mencement of retirement benefit payments, such payments will be con-
tinued to the retirant's beneficiary during the balance of the ten-year
certain period.

    (F) Life with 15 years certain. A reduced retirement benefit is pay-
able to the retirant during the retirant's lifetime in a monthly amount
equal to 92% of the monthly payment of the retirement benefit otherwise
payable under K.S.A. 74-4958 and amendments thereto, and if the retir-
ant dies within the fifteen-year certain period, measured from the com-
mencement of retirement benefit payments, such payments will be con-
tinued to the retirant's beneficiary during the balance of the fifteen-year
certain period.

    (6) On and after July 1, 1996, if a member with 20 or more years of
credited service dies before attaining retirement age, the member's
spouse, if the spouse is the sole beneficiary for the member's accumulated
contributions, may elect to receive benefits under one of the options
provided in this section in lieu of receiving the member's accumulated
contributions or in lieu of receiving benefits as provided in K.S.A. 74-
4959 and amendments thereto. Payments under one of the options pro-
vided in this section to the member's spouse if so elected, shall commence
on the date that the member would have attained retirement age.

    (7) Benefits payable to a joint annuitant shall accrue from the first
day of the month following the death of a member or retirant and, in the
case of the joint and 1/2 to joint annuitant survivor option, the joint and
survivor option and the joint and 3/4 to joint annuitant survivor option,
shall end on the last day of the month in which the joint annuitant dies.

    (8) The provisions of the law in effect on the retirement date of a
member under the system shall govern the retirement benefit payable to
the retirant and any joint annuitant, except, for retirement benefits pay-
able after July 1, 1993, for retirants who retired prior to July 1, 1982, in
the event that the designated joint annuitant under the option provided
in subsection (5)(A), (B) or (C), as applicable, predeceased the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under the option provided in subsection (5)(A), (B) or (C), as applicable,
shall be adjusted automatically to the retirement benefit which the retir-
ant would have received if no option had been elected under this section.

    (9) Upon the death of a joint annuitant who is receiving a retirement
benefit under the provisions of this section, there shall be paid to such
joint annuitant's beneficiary an amount equal to the excess, if any, of the
accumulated contributions of the retirant over the sum of all retirement
benefit payments made to such retirant and such joint annuitant. Such
joint annuitant shall designate a beneficiary by filing in the office of the
retirement system such designation at the time of death of the retirant.
If there is no named beneficiary of such joint annuitant living at the time
of death of such joint annuitant, any amount provided for by this section
shall be paid to, in order of preference as follows:

    (A) The joint annuitant's surviving spouse;

    (B) the joint annuitant's dependent child or children;

    (C) the joint annuitant's dependent parent or parents;

    (D) the joint annuitant's nondependent child or children;

    (E) the joint annuitant's nondependent parent or parents; or

    (F) the estate of the deceased joint annuitant.

    (10) The provisions of this section shall be effective on and after July
1, 1989, and shall apply only to members who were appointed or em-
ployed prior to July 1, 1989, and who made an election pursuant to K.S.A.
74-4955a and amendments thereto; and persons appointed or employed
on or after July 1, 1989.

    Sec. 79. K.S.A. 1997 Supp. 74-4965 is hereby amended to read as
follows: 74-4965. (1) Except as otherwise provided in this section, each
participating employer shall, beginning with the first payroll period for
services performed after the entry date, deduct from the compensation
of each member 7% of such member's compensation as employee con-
tributions, except that in the case of a member whose employment is
covered by social security and the member is a member of the class cer-
tified in the case of Brazelton v. Kansas public employees retirement
system, 227 K. 443, 607 P.2d 510 (1980), the deduction from such mem-
ber's compensation shall be reduced by the amount of such member's
contributions to social security.

    (2) For any member other than a member who is a member of the
class certified in the case of Brazelton v. Kansas public employees retire-
ment system, 227 K. 443, 607 P.2d 510 (1980), no employee contributions
shall be reduced because of contributions to social security.

    (3) All such deductions shall be remitted quarterly, or as the board
may otherwise provide, to the executive secretary for credit to the Kansas
public employees retirement fund and shall be credited to the members'
individual accounts. Interest on each member's accumulated contribu-
tions at the rate determined under subsection (a) of K.S.A. 74-4922 and
amendments thereto shall be added annually to the member's individual
account.

    (4) For all payroll periods commencing on or after the effective date
of this act, each participating employer shall deduct from the compen-
sation of each member who has received 32 years of credited service, 2%
of such member's compensation as employee contributions.

    (5) (a) Subject to the provisions of section 83 and amendments
thereto, each participating employer, pursuant to the provisions of section
414(h)(2) of the United States federal internal revenue code, shall pick
up and pay the contributions which would otherwise be payable by mem-
bers as prescribed in subsection (1) commencing with the third quarter
of 1984. The contributions so picked up shall be treated as employer
contributions for purposes of determining the amounts of federal income
taxes to withhold from the member's compensation.

    (b) Member contributions picked up by the employer shall be paid
from the same source of funds used for the payment of compensation to
a member. A deduction shall be made from each member's compensation
equal to the amount of the member's contributions picked up by the
employer, provided that such deduction shall not reduce the member's
compensation for purposes of computing benefits under the system.

    (c) Member contributions picked up by the employer shall be remit-
ted quarterly, or as the board may otherwise provide, to the executive
secretary for credit to the Kansas public employees retirement fund. Such
contributions shall be credited to a separate account within the member's
individual account so that amounts contributed by the member com-
mencing with the third quarter of 1984 may be distinguished from the
member contributions picked up by the employer. Interest shall be added
annually to members' individual accounts.

    Sec. 80. K.S.A. 1997 Supp. 74-4965a is hereby amended to read as
follows: 74-4965a. (1) Subject to the provisions of section 83 and amend-
ments thereto, any member of the Kansas police and firemen's retirement
system may purchase participating credit for periods of active service in
the armed forces of the United States or in the United States public health
service and for periods of service required to fulfill the requirements of
section 651 of title 10, United States code, which does not exceed six
years. Except as otherwise required by the provisions of USERRA, such
member shall be entitled to purchase one quarter of participating service
credit for each year of service required to fulfill the requirements of
section 651 of title 10, United States code. Such purchase shall be effected
by the member submitting proof of such service acceptable to the board
and electing in writing to have employee contributions as provided in
K.S.A. 74-4965 and amendments thereto deducted from such member's
compensation at an additional rate of contribution, in addition to the
employee's rate of contribution as provided in K.S.A. 74-4965 and amend-
ments thereto, based upon the member's attained age at the time of
purchase and using actuarial assumptions and tables in use by the retire-
ment system at such time of purchase for such periods of service. Such
additional rate of contribution shall commence at the beginning of the
quarter following such election and shall remain in effect until all of the
full quarters of such service have been purchased.

    (2) Any member of the retirement system who has not retired may
purchase, subject to the provisions of section 83 and amendments thereto,
participating service credit for military service as described in this section
by electing to effect such purchase by means of a single lump-sum pay-
ment in lieu of employee contributions as provided in this section. The
lump-sum payment shall be an amount determined by the actuary using
the member's then current annual rate of compensation, or if not actively
employed, the member's annual rate of compensation when last partici-
pating, the actuarial assumptions and tables currently in use by the re-
tirement system and the member's attained age. No participating em-
ployer shall pay all or any part of the cost of any additional participating
service credit to be purchased by means of a lump-sum payment by a
member under this section.

    (3) Except as otherwise required by the provisions of USERRA, any
participating service credit purchased by a member as provided by this
section shall not be counted toward or be used in determining whether
such member meets the years of credited service requirement provided
for in K.S.A. 74-4957 or 74-4957a and amendments thereto.

    (4) The provisions of this section shall take effect on and after July
1, 1994.

    Sec. 81. K.S.A. 74-4977 is hereby amended to read as follows: 74-
4977. The provisions of K.S.A. 74-4963 and any amendments now or
hereafter made thereto relating to termination of employment shall be
applicable in all respects to patrolmen becoming members of the Kansas
police and firemen's retirement system: Provided, however,, except that
a member who transfers from the Kansas highway patrol pension system
and later terminates his such member's employment and withdraws his
such member's accumulated contributions under the Kansas police and
firemen's retirement system and the Kansas highway patrol pension sys-
tem may upon returning to covered employment receive credit for his
such member's service prior to termination, subject to the provisions of
section 83 and amendments thereto, by repaying his such member's ac-
cumulated contributions plus interest, as determined by the board, to the
Kansas police and firemen's retirement system and by also repaying the
accumulated contributions withdrawn from the Kansas highway patrol
pension system plus interest at a rate specified by the board of the Kansas
highway patrol pension system.

    Sec. 82. K.S.A. 74-4985 is hereby amended to read as follows: 74-
4985. The provisions of K.S.A. 74-4963 and any amendments now or
hereafter made thereto relating to termination of employment shall be
applicable in all respects to agents becoming members of the Kansas
police and firemen's retirement system: Provided, however,, except that
a member who transfers from the Kansas bureau of investigation pension
system and later terminates his such member's employment and with-
draws his such member's accumulated contributions under the Kansas
police and firemen's retirement system and the Kansas bureau of inves-
tigation pension system may upon returning to covered employment re-
ceive credit for his such member's service prior to termination, subject to
the provisions of section 83 and amendments thereto, by repaying his such
member's accumulated contributions plus interest, as determined by the
board, to the Kansas police and firemen's retirement system and by also
repaying the accumulated contributions withdrawn from the Kansas bu-
reau of investigation pension system plus interest at a rate specified by
the board of the Kansas bureau of investigation pension system.

    New Sec. 83. (a) This section applies to the Kansas public employees
retirement system and to all other public retirement plans administered
by the board of trustees.

    (b) As used in this section:

    (1) ``Federal internal revenue code'' means the federal internal rev-
enue code of 1954 or 1986, as amended and as applicable to a govern-
mental plan as in effect on July 1, 1998; and

    (2) ``retirement plan'' includes the Kansas public employees retire-
ment system and all other Kansas public retirement plans and benefit
structures, which are administered by the board.

    (c) In addition to the federal internal revenue code provisions oth-
erwise noted in each retirement plan's law, and in order to satisfy the
applicable requirements under the federal internal revenue code, the
retirement plans shall be subject to the following provisions, notwith-
standing any other provision of the retirement plan's law:

    (1) The board shall distribute the corpus and income of the retire-
ment plan to the members and their beneficiaries in accordance with the
retirement plan's law. At no time prior to the satisfaction of all liabilities
with respect to members and their beneficiaries shall any part of the
corpus and income be used for, or diverted to, purposes other than the
exclusive benefit of the members and their beneficiaries.

    (2) Forfeitures arising from severance of employment, death or for
any other reason may not be applied to increase the benefits any member
would otherwise receive under the retirement plan's law. However, for-
feitures may be used to reduce an employer's contribution.

    (3) All benefits paid from the retirement plan shall be distributed in
accordance with the requirements of section 401(a)(9) of the federal in-
ternal revenue code and the regulations under that section. In order to
meet these requirements, the retirement plan shall be administered in
accordance with the following provisions: (A) Distribution of a mem-
ber's benefit must begin by the later of the April 1 following the calendar
year in which a participant attains age 701/2 or the April 1 of the year
following the calendar year in which the member retires;

    (B) the life expectancy of a member or the member's spouse may not
be recalculated after the benefits commence;

    (C) if a member dies before the distribution of the member's benefits
has begun, distributions to beneficiaries must begin no later than Decem-
ber 31 of the calendar year immediately following the calendar year in
which the member died, except as provided in subsection (6) of K.S.A.
74-4918 and amendments thereto; and

    (D) the amount of benefits payable to a member's beneficiary may
not exceed the maximum determined under the incidental death benefit
requirement of the federal internal revenue code.

    (4) Distributions from the retirement plans may be made only upon
retirement, separation from service, disability or death.

    (5) The board or its designee may not:

    (A) determine eligibility for benefits;

    (B) compute rates of contribution; or

    (C) compute benefits of members or beneficiaries, in a manner that
discriminates in favor of members who are considered officers, supervi-
sors or highly compensated, as prohibited under section 401(a)(4) of the
federal internal revenue code.

    (6) Subject to the provisions of this subsection, benefits paid from,
and employee contributions made to, the retirement plans shall not ex-
ceed the maximum benefits and the maximum annual additions, respec-
tively, permissible under section 415 of the federal internal revenue code.

    (A) Beginning January 1, 1995, a participant may not receive an an-
nual benefit that exceeds the dollar amount specified in section
415(b)(1)(A) of the federal internal revenue code, subject to the appli-
cable adjustments in section 415 of the federal internal revenue code,
except as provided in clause (C) of this subsection.

    (B) Notwithstanding any other provision of law to the contrary, the
board may modify a request by a participant to make a contribution to
the retirement plans if the amount of the contribution would exceed the
limits under section 415(c) or 415(n) of the federal internal revenue code
subject to the following:

    (i) Where the retirement plan's law requires a lump-sum payment,
for the purchase of service credit, the board may establish a periodic
payment plan in order to avoid a contribution in excess of the limits under
section 415(c) or 415(n) of the federal internal revenue code.

    (ii) An eligible participant in a retirement plan, as defined by section
1526 of the federal taxpayer relief act of 1997, may purchase service credit
without regard to the limitations of section 415 (c)(1) of the federal in-
ternal revenue code as provided by state law in effect on August 5, 1997.

    If the board's option under subdivision (i) will not avoid a contribution
in excess of the limits under section 415(c) or 415(n) of the federal in-
ternal revenue code, the board shall reduce or deny the contribution.

    (C) Subject to approval by the internal revenue service, the board
shall maintain a qualified governmental excess benefit arrangement under
section 415(m) of the federal internal revenue code. The board shall es-
tablish the necessary and appropriate procedures for the administration
of such benefit arrangement under the federal internal revenue code.
The amount of any annual benefit that would exceed the limitations im-
posed by section 415 of the federal internal revenue code shall be paid
from this benefit arrangement. The amount of any contribution that
would exceed the limitations imposed by section 415 of the federal in-
ternal revenue code shall be credited to this benefit arrangement. The
qualified excess benefit arrangement shall be a separate portion of the
retirement plan. The qualified excess benefit arrangement is subject to
the following requirements:

    (i) The benefit arrangement shall be maintained solely for the pur-
pose of providing to participants in the retirement plans that part of the
participant's annual benefit otherwise payable under the terms of the act
that exceeds the limitations on benefits imposed by section 415 of the
federal internal revenue code; and

    (ii) participants do not have an election, directly or indirectly, to defer
compensation to the excess benefit arrangement.

    (D) Prior to January 1, 1998, the definition of compensation, wages,
salary or other similar term when used for purposes of determining com-
pliance with section 415 of the federal internal revenue code does not
include the amount of any elective deferral, as defined in section
402(g)(3) of the federal internal revenue code, or any contribution which
is contributed or deferred by the employer at the election of the employee
and which is not includable in the gross income of the employee by reason
of section 125 or 457 of the federal internal revenue code.

    (7) The board may not engage in a transaction prohibited by section
503(b) of the federal internal revenue code.

    (8) To the extent required by section 401(a)(31) of the federal inter-
nal revenue code, the board shall allow members and qualified benefi-
ciaries to elect a direct rollover of eligible distributions to another eligible
retirement plan. Notwithstanding any law to the contrary, the board may
accept a direct rollover of eligible distributions for the purpose of the
purchase of service credit.

    (9) Where required by the act, an employer shall pick up and pay
contributions that would otherwise be payable by members of a retire-
ment plan in accordance with section 414(h)(2) of the federal internal
revenue code as follows:

    (A) The contributions, although designated as employee contribu-
tions, are being paid by the employer in lieu of contributions by the
employee;

    (B) the employee must not have been given the option of receiving
the amounts directly instead of having them paid to the retirement plan;
and

    (C) the pickup shall apply to amounts that a member elects to con-
tribute to receive credit for prior or participating service if the election
is irrevocable and applies to amounts contributed before retirement.

    (10) Notwithstanding any provision of this plan to the contrary, con-
tributions, benefits and service credit with respect to qualified military
service will be provided in accordance with section 414(u) of the federal
internal revenue code.

    (11) Upon the complete or partial termination of a retirement plan,
the rights of members to benefits accrued to the date of termination, to
the extent funded, or to the amounts in their accounts are nonforfeitable,
and amounts in their accounts may be distributed to them.

    (d) The plan year for the retirement plan begins on July 1.

    (e) The limitation year for purposes of section 415 of the federal
internal revenue code is the calendar year.

    New Sec. 84. The retirement system for judges shall be administered
by the board in the manner required to satisfy the applicable qualification
requirements for governmental plans as specified in the federal internal
revenue code of 1954 or 1986, as amended and as appropriate for a gov-
ernmental plan and as in effect on July 1, 1998. The provisions of section
83 and amendments thereto apply to the administration of the system.

    New Sec. 85. The board shall administer the Kansas public employ-
ees retirement fund, including all benefit structures administered by the
board, in the manner required to satisfy the applicable qualification
requirements for governmental plans as specified in the federal internal
revenue code of 1954 or 1986, as amended and as appropriate for a gov-
ernmental plan and as in effect on July 1, 1998.

    New Sec. 86. The provisions of subsection (c)(6) of section 83 and
amendments thereto apply to benefit increases provided under the pro-
visions of K.S.A. 74-4943 through 74-4950g and amendments thereto and
to future benefit increases provided to retirants or local school annuitants.

    Sec. 87. K.S.A. 1997 Supp. 74-4992 is hereby amended to read as
follows: 74-4992. (a) Any such member of the legislature or former mem-
ber of the legislature as described in K.S.A. 74-4991 and amendments
thereto shall become a member on entry date or upon filing with the
board an irrevocable election to become or not to become a member of
the system. In the event that any such member of the legislature or former
member of the legislature fails to file the election to become a member
of the retirement system, it shall be presumed that such member of the
legislature or former member of the legislature has elected not to become
a member. The election to participate shall become effective on the first
day of the first payroll period of the first quarter following receipt of the
election in the office of the retirement system.

    (b) Any member of the legislature who had attained membership in
the Kansas public employees retirement system prior to taking the oath
of office as a member of the legislature may elect not to participate in
the Kansas public employees retirement system for the purpose of service
as a member of the legislature. This election, which is irrevocable, must
be filed within the offices of the system. Any member of the legislature
who is a member of the retirement system on the effective date of this
act and was a member of the retirement system at the time of taking the
oath of office may elect not to participate in the retirement system for
service as a member of the legislature if such irrevocable election is filed
within the offices of the system. Upon filing such election such member
of the legislature shall receive a refund of all contributions made to the
retirement system by filing a withdrawal application with the system.

    (c) Subject to the provisions of section 83, and amendments thereto,
any member of the legislature who elected not to participate in the re-
tirement system, and who is not a contributing member with any other
participating employer, may purchase such participating service by mak-
ing a single lump-sum payment in an amount determined by the actuary
using the then current rate of compensation and the actuarial assumptions
and tables currently in use by the system.

    (d) Subject to the provisions of section 83, and amendments thereto,
except as otherwise provided in this section, any member of the retire-
ment system may purchase participating service credit for employment
service as described in this section, if first commenced prior to January
1, 1996, by electing to effect such purchase by means of having employee
contributions as provided in K.S.A. 74-4919 and amendments thereto
deducted from such member's compensation at a percentage rate equal
to two times or three times the employee's rate of contribution as pro-
vided in K.S.A. 74-4919 and amendments thereto for such periods of
service in lieu of a lump-sum amount as provided in this section. Such
deductions shall commence at the beginning of the quarter following such
election and shall remain in effect until all quarters of such service have
been purchased. Any person may make any such purchase as described
in this section, if first commenced in calendar year 1996 or thereafter, at
an additional rate of contribution, in addition to the employee's rate of
contribution as provided in K.S.A. 74-4919 and amendments thereto,
based upon the member's attained age at the time of purchase and using
actuarial assumptions and tables in use by the retirement system at such
time of purchase, for such periods of service, in lieu of a lump-sum
amount as provided in this section. Such additional rate of contribution
shall commence at the beginning of the quarter following such election
and shall remain in effect until all quarters of such service have been
purchased.

    Sec. 88. K.S.A. 74-4998b is hereby amended to read as follows: 74-
4998b. (a) Any elected state official shall become a special member of
the Kansas public employees retirement system upon filing with the board
an election to become a special member of the system. The election to
become a special member shall be made by November 18, 1988, or within
30 days after the elected state official takes the oath of office, whichever
is later, except that no election to become a special member shall be made
after the effective date of this act. In the event that any such elected state
official fails to file the election to become a special member of the re-
tirement system, it shall be presumed that such elected state official has
elected not to become a special member. The election to participate shall
become effective on the first day of the first payroll period coinciding
with or following receipt of the election in the office of the retirement
system. The election shall remain in effect until the member ceases to
serve as an elected state official or as otherwise provided by law. On or
after July 1, 1991, no elected state official shall be a special member for
purposes of this act for any service for any payroll period during any term
of office which commences after the effective date of this act. Any elected
state official who has become a special member as provided in K.S.A. 74-
4998b et seq. and amendments thereto may elect to revoke such elected
state official's status as a special member by filing with the board an
election to revoke such special member status. The election to revoke
such elected state official's status as a special member shall become ef-
fective on the first day of the first payroll period coinciding with or fol-
lowing receipt of such election in the office of the retirement system. Any
service during such period when such elected state official was a special
member shall be credited as a member and not as a special member after
receipt of such elected state official's election to revoke such special mem-
ber status in the office of the retirement system. Any contributions made
by such elected state official as a result of such elected state official's
election to become a special member which exceed the contributions
which would have been made by the elected state official as a member
and not as a special member shall be returned upon separation of service
to such elected state official after receipt of such elected state official's
election to revoke such special member status in the office of the retire-
ment system.

    (b) As used in this act, ``elected state official'' means any member of
the legislature, or a former member of the legislature, the governor, the
lieutenant governor, the secretary of state, the attorney general, the com-
missioner of insurance and the state treasurer; and any person who for-
merly served in any such capacity who has 10 or more years of credited
service and who has not yet retired or withdrawn such person's accu-
mulated contributions.

    Sec. 89. K.S.A. 74-4998c is hereby amended to read as follows: 74-
4998c. (a) Except as otherwise provided in this section, for all payroll
periods commencing on or after July 1, 1988, but prior to the end of the
term of office in which such elected official is serving on the effective
date of this act, each elected state official shall contribute 5% of the
elected state official's salary for each payroll period to the fund. For all
payroll periods commencing on or after July 1, 1988, but prior to the end
of the term of office in which such elected official is serving on the ef-
fective date of this act, the employer shall deduct from the compensation
of each member who has received 30 years of credited service 2% of such
member's compensation as employee contributions. Each elected state
official shall make contributions as provided in K.S.A. 74-4919 and
amendments thereto in lieu of contributions as provided in this section,
for all payroll periods during any term of office of such elected state
official which commences after the effective date of this act. The provi-
sions of K.S.A. 74-4919c, 74-4919d, 74-4919e, 74-4919h or 74-4919j and
amendments thereto shall apply to elected state officials, except that,
subject to the provisions of section 83 and amendments thereto, such
elected state officials shall purchase prior and participating service credit
at the rate of 10% or 15% for the payroll periods commencing on or after
July 1, 1988, but prior to the end of the term of office in which such
elected official is serving on the effective date of this act.

    (b) The director of accounts and reports shall deduct the amount
each elected state official is to contribute to the fund on the payroll of
each elected state official for each payroll period showing the amount
deducted and its credit to the fund. Such deductions shall be remitted as
the board may provide, to the executive secretary of the Kansas public
employees retirement system for credit to the fund to the credit of the
elected state official's individual account therein.

    (c) For purposes of contributions to and benefits under the Kansas
public employees retirement system of such elected state officials who
are members of the legislature, the salary or compensation of such elected
state official shall be as provided in K.S.A. 74-4995 and amendments
thereto.

    (d) (1) Subject to the provisions of section 83 and amendments
thereto, the state of Kansas pursuant to the provisions of section 414(h)(2)
of the federal internal revenue code of 1986, as in effect on July 1, 1998,
shall pick up and pay the contributions which would otherwise be payable
by elected state officials as prescribed in subsection (a) commencing with
the effective date of this act. Contributions so picked up shall be treated
as employer contributions for purposes of determining the amounts of
federal income taxes to withhold from the elected state official's com-
pensation.

    (2) Member contributions picked up by the state shall be paid from
the same source of funds used for the payment of compensation to an
elected state official. A deduction shall be made from each elected state
official's compensation equal to the amount of the elected state official's
contributions picked up by the state, provided that such deduction shall
not reduce the elected state official's compensation for purposes of com-
puting benefits under the retirement system.

    (3) Member contributions picked up by the state shall be remitted as
the board may provide, to the executive secretary for credit to the Kansas
public employees retirement fund.

    (e) No former member of the legislature shall be required to make
contributions as otherwise required by this section.

    Sec. 90. K.S.A. 74-4998g is hereby amended to read as follows: 74-
4998g. Except as specifically provided, the provisions of K.S.A. 74-4998b
through 74-4998f and amendments thereto shall be part of and supple-
mental to the provisions of K.S.A. 74-4901 through 74-4929 et seq. and
amendments thereto and shall be governed thereby in all respects, except
if specifically provided in this act, the provisions of this act shall prevail
including, but not limited to, the provisions of section 83 and amendments
thereto.

    Sec. 91. K.S.A. 74-49,100 is hereby amended to read as follows:
74-49,100. (a) On July 1, 1975, the Kansas retirement fund for official
court reporters created by K.S.A. 20-2702 is hereby abolished and the
state treasurer shall transfer all moneys and other assets in said such
Kansas retirement fund for official court reporters to the Kansas public
employees retirement fund created by K.S.A. 74-4921 and amendments
thereto. For the purposes of all assets other than money, such transfer
shall be at the market value of such assets at the close of business on the
date of transfer, which shall be the bid price as quoted by a nationally
recognized government bond dealer.

    (b) On July 1, 1975, and as a part of the transfer of moneys and other
assets of the Kansas retirement fund for official court reporters to the
Kansas public employees retirement fund, the accounts in the Kansas
public employees retirement fund of persons who become members or
special members of the Kansas public employees retirement system pur-
suant to K.S.A. 74-4999 and amendments thereto, shall be credited with
the contributions in their respective accounts in the Kansas retirement
fund for official court reporters.

    (c) On and after July 1, 1975, the board of trustees of the Kansas
public employees retirement system may execute transfer endorsements
for any stock or security which was transferred from the Kansas retire-
ment fund for official court reporters to the Kansas public employees
retirement fund pursuant to subsection (a). Any such endorsement may
be made either in the name of the Kansas public employees retirement
fund or in the name of the Kansas retirement fund for judges.

    (d) On and after July 1, 1975, whenever the Kansas retirement fund
for official court reporters, or words of like effect, is referred to or des-
ignated by a statute or contract or other document, such reference or
designation shall be deemed to apply to the Kansas public employees
retirement fund.

    (e) On and after July 1, 1975, whenever the Kansas official court
reporters retirement board, or words of like effect, is referred to or des-
ignated by a statute or contract or other document, such reference or
designation shall be deemed to apply to the board of trustees of the
Kansas public employees retirement system.

    (f) The rights of members of the Kansas retirement fund for official
court reporters in benefits accrued to the date of termination, to the extent
funded, or the amounts in such member's accounts are nonforfeitable.

    Sec. 92. K.S.A. 1997 Supp. 74-49,105 is hereby amended to read as
follows: 74-49,105. Every retirement benefit received by any person un-
der subsection (b) of K.S.A. 74-49,104 and amendments thereto shall be
exempt from any tax of the state of Kansas or any political subdivision or
taxing body of the state; shall not be subject to execution, garnishment,
attachment or except as otherwise provided, any other process or claim
whatsoever; and shall be unassignable. Any retirement benefit due and
owing to any person under subsection (b) of K.S.A. 74-49,104 and amend-
ments thereto is subject to claims of an alternate payee under a qualified
domestic relations order. As used in this subsection, the terms ``alternate
payee'' and ``qualified domestic relations order'' shall have the meaning
ascribed to them in section 414(p) of the United States internal revenue
code of 1954 1986, as amended as in effect on July 1, 1998, and as ap-
plicable to a governmental plan. The provisions of this act shall apply to
any qualified domestic relations order which was filed or amended either
before or after July 1, 1994.

    Sec. 93. K.S.A. 74-49,107 is hereby amended to read as follows:
74-49,107. The provisions of K.S.A. 74-4999 to through 74-49,107, inclu-
sive and amendments thereto, shall be administered by the board of trus-
tees of the Kansas public employees retirement system. K.S.A. 74-4999
through 74-49,107 and amendments thereto are subject to the provisions
of section 83 and amendments thereto.

    New Sec. 94. The provisions of article 49a of chapter 74 of the Kan-
sas Statutes Annotated are subject to the provisions of section 83 and
amendments thereto.

    Sec. 95. K.S.A. 12-5007, 13-14a02, 13-14a05, 13-14a06, 13-14a13,
14-10a02, 14-10a05, 14-10a06, 14-10a13, 20-2603, 20-2606, 20-2610a, 20-
2618, 20-2619, 20-2620, 20-2621, 72-5501, 72-5512, 72-5518, 72-5520,
72-5531, 74-4911c, 74-4911e, 74-4911g, 74-4912, 74-4919, 74-4919b,
74-4919f, 74-4919i, 74-4919l, 74-4927a, 74-4927b, 74-4927h, 74-4928,
74-4933, 74-4935, 74-4936, 74-4942, 74-4953, 74-4954b, 74-4962, 74-
4973, 74-4977, 74-4978b, 74-4981, 74-4985, 74-4998b, 74-4998c, 74-
4998g, 74-49,100, 74-49,107 and 74-49a133 and K.S.A. 1997 Supp.
12-5002, 12-5005, 13-14a07, 13-14a10, 14-10a07, 20-2601, 74-4902, 74-
4909, 74-4911, 74-4911b, 74-4911f, 74-4913, 74-4916, 79-4917a, 74-4918,
74-4919a, 74-4919c, 74-4919d, 74-4919g, 74-4919h, 74-4919j, 74-4919m,
74-4919n, 74-4919o, 74-4922, 74-4923, 74-4927, 74-4932, 74-4935c,
74-4936a, 74-4952, 74-4956, 74-4958, 74-4958a, 74-4959,74-4960, 74-
4960a, 74-4963, 74-4963a, 74-4964, 74-4964a, 74-4965, 74-4965a, 74-
4992 and 74-49,105 are hereby repealed.

    Sec. 96. This act shall take effect and be in force from and after its
publication in the statute book.

I hereby certifiy that the above Bill originated in the
Senate, and passed that body

__________________________________

__________________________________

President of the Senate.

__________________________________

Secretary of the Senate.

Passed the House __________________________

__________________________________

Speaker of the House.

__________________________________

Chief Clerk of the House.

Approved__________________________________

__________________________________

Governor.