Session of 2000
HOUSE BILL No. 3044
By Committee on Appropriations
3-20
10 AN ACT
concerning retirement; relating to employees of the state board
11 of regents; tax
sheltered annuities; amending K.S.A. 1999 Supp. 74-
12 4925 and 74-4925e and
repealing the existing sections.
13
14 Be it enacted by the Legislature of the
State of Kansas:
15 Section
1. K.S.A. 1999 Supp. 74-4925 is hereby amended to read as
16 follows: 74-4925. (1) The state board of
regents shall:
17 (a) Assist all
those members of the faculty and other persons who are
18 employed by the state board of regents or
by educational institutions
19 under its management and who are in the
unclassified service under the
20 Kansas civil service act as provided in
subsection (1)(f) of K.S.A. 75-2935
21 and amendments thereto, except health care
employees, as defined by
22 subsection (1)(f) of K.S.A. 75-2935 and
amendments thereto, in the pur-
23 chase of retirement annuities for their
service rendered after December
24 31, 1961. Effective on the first day of the
first payroll period commencing
25 with or following July 1, 1994, county
extension agents employed by Kan-
26 sas state university under K.S.A. 2-615 and
amendments thereto shall be
27 eligible for assistance by the state board
of regents in the purchase of
28 retirement annuities under this section.
Effective on the first day of the
29 first payroll period commencing with or
following July 1, 2000, county
30 extension agents, extension specialists
and extension administrators em-
31 ployed by the Kansas state university
extension and research program
32 with benefits provided by the civil
service retirement system, shall be
33 eligible for assistance by the state
board of regents in the purchase of
34 retirement annuities under this
section. The state board of regents shall
35 not assist any such person who is employed
after December 31, 1961,
36 until such person has been employed for a
waiting period of at least one
37 year except that (i) the state board of
regents may assist any newly em-
38 ployed person immediately if at the time of
the commencement of em-
39 ployment the person is covered by a valid
retirement annuity contract
40 issued by a company described in subsection
(2) which was entered into
41 pursuant to a retirement pension plan
adopted for faculty members or
42 other persons, or both, employed by an
institution of higher education
43 and to which such person or such person's
employer on such person's
2
1 behalf has been making contributions
for at least one year, and (ii) all
2 periods of employment with (A)
participating employers under the Kansas
3 public employees retirement system,
for which employment participating
4 service credit accrued, or (B)
institutions of higher education in other
5 states for which employment
retirement benefits accrued under a retire-
6 ment system or plan provided for such
employment, shall be credited
7 toward satisfaction of such one-year
waiting period if served, in either
8 case, during the five years
immediately preceding employment with the
9 state board of regents or with an
educational institution under its man-
10 agement in the unclassified service under
the Kansas civil service act as
11 provided in subsection (1)(f) of K.S.A.
75-2935 and amendments thereto,
12 in addition to such employment with the
state board of regents or with
13 an educational institution under its
management; no period of employ-
14 ment as a student employee, as a seasonal
or temporary employee or as
15 a part-time employee, whose employment
requires less than 1,000 hours
16 of work per year, shall be credited toward
the one-year waiting period
17 under subsection (1)(a); this act shall not
apply to persons employed in
18 such temporary and part-time positions
designated by the state board of
19 regents as exceptions hereto;
20 (b)
(i) except as provided in subsection (b)(ii), require
such members
21 of the faculty and others described in
subsection (1)(a) who are so assisted
22 by the state board of regents to contribute
an amount toward the purchase
23 of such retirement annuities of 5.5% of
their salaries, such contributions
24 to be made through payroll deductions and
on a pretax basis; and
25 (ii) require
county extension agents, extension specialists and exten-
26 sion administrators with benefits
provided by the civil service retirement
27 system as described in subsection (1)(a)
who are assisted by the state
28 board of regents to contribute an amount
toward the purchase of such
29 retirement annuities of 4% of their
salaries, such contributions to be made
30 through payroll deductions and on a
pretax basis;
31 (c)
(i) except as provided in subsection (c)(ii),
contribute an amount
32 toward the purchase of such retirement
annuities equal to the percentage
33 amount, as prescribed by K.S.A. 74-4925e
and amendments thereto, of
34 the total amount of the salaries on which
such members of the faculty
35 and others described in subsection (1)(a)
contribute during such period
36 for which the contribution of the state
board of regents is made; and
37
(ii) contribute an amount toward the purchase of such
retirement
38 annuities equal to the percentage
amount, as prescribed by section 2, and
39 amendments thereto, of the total amount
of the salaries on which such
40 county extension agents, extension
specialists and extension administra-
41 tors with benefits provided by the civil
service retirement system as de-
42 scribed in subsection (1)(a) contribute
during such period for which the
43 contribution of the state board of
regents is made;
3
1
(d) provide, under such rules and regulations as the state
board of
2 regents may adopt, for the retirement
of any such member of the faculty
3 or other person described in
subsection (1)(a) on account of age or con-
4 dition of health, retirement of such
member of the faculty or other person
5 described in subsection (1)(a) on
account of age to be not earlier than the
6 55th birthday and prior to January 1,
1994, not later than the end of the
7 academic year following the 70th
year. On and after January 1, 1994, there
8 shall be no mandatory retirement on
account of age. Any person who
9 retires under this section and who
receives benefits from the Kansas pub-
10 lic employees retirement system for prior
service credit shall have such
11 benefits calculated in accordance with the
applicable provisions of K.S.A.
12 74-4914 and 74-4915 and amendments
thereto.
13 (2) For the
purposes of this section the state board of regents may
14 contract with:
15 (a) Any life
insurance company authorized to do business in this state;
16 or
17 (b) any life
insurance company organized and operated without profit
18 to any private shareholder or individual
exclusively for the purpose of
19 aiding and strengthening educational
institutions by issuing insurance and
20 annuity contracts only to or for the
benefit of such institution and indi-
21 viduals engaged in the services of such
institutions, whether or not such
22 company is authorized to do business in
Kansas. No premium tax or in-
23 come tax shall be due or payable on such
annuity contract or contracts
24 for such retirement programs issued by a
company described in this sub-
25 section (2)(b), except that neither the
purchase nor the issuance of such
26 retirement annuities from or by a company
described in this subsection
27 (2)(b) shall constitute the effecting of a
contract of insurance.
28 (3)
(a) Such member of the faculty or other person described in
sub-
29 section (1)(a) shall also be a member of
the Kansas public employees
30 retirement system, but only for the purpose
of granting retirement ben-
31 efits based on prior service only which was
rendered prior to January 1,
32 1962, which shall be credited to the member
as provided in subsection
33 (1) of K.S.A. 74-4913 and amendments
thereto, except that such member
34 of the faculty or other person described in
subsection (1)(a) who was
35 employed prior to July 1, 1962, who has not
yet retired and who is em-
36 ployed on July 1, 1988, on an academic year
contract, shall receive credit
37 for 12 months of prior service for each
nine months of prior service for
38 which such member or person was employed on
an academic year con-
39 tract prior to July 1, 1962. For the
purpose of determining eligibility for
40 a vested benefit, service by such a member
of the faculty or other person
41 after December 31, 1961, shall be construed
to be credited service under
42 subsection (2) of K.S.A. 74-4917 and
amendments thereto.
43 (b) Any member of
the faculty or other person described in subsec-
4
1 tion (1)(a) who retires after 10
years of continuous service immediately
2 preceding retirement shall be granted
a retirement benefit based on prior
3 service only which was rendered prior
to January 1, 1962. Application for
4 such benefit shall be in such form
and manner as the board shall
5 prescribe.
6 (4) For the
purpose of establishing a procedure whereby the state
7 board of regents and any member of
the faculty or other person described
8 in subsection (1)(a), subject to
rules and regulations of the state board of
9 regents, may take advantage of
section 403(a) or (b) of the federal internal
10 revenue code of 1986 or any other section
of the federal internal revenue
11 code of 1986 which defers or excludes
amounts from inclusion in income,
12 any member of the faculty or any other
person described in subsection
13 (1)(a), whether or not such person has
satisfied the one-year waiting pe-
14 riod requirement under subsection (1)(a),
may request in writing that the
15 state board of regents reduce such person's
annual salary, as fixed by the
16 board, in an amount equal to not less than
5% nor more than the per-
17 centage allowed under section 403(b) of the
federal internal revenue code
18 of 1986, as designated by such member of
the faculty or other person
19 described in subsection (1)(a), of the
gross amount of such annual salary.
20 In the event of such request by a faculty
member or other person who is
21 required to make the contribution as
provided in subsection (1)(b)(i) or
22 (1)(b)(ii), such person shall not be
required to make such contribution
23 and the state board of regents shall
provide a sum equal to the percentage
24 amount, as prescribed by K.S.A. 74-4925e
or section 2, and amendments
25 thereto, of the gross annual salary of the
member of the faculty or other
26 person and shall purchase for and on behalf
of each such person whose
27 salary has been so reduced a retirement
annuity contract or contracts, the
28 annual premiums for which shall be equal to
the sum of the amount of
29 the salary reduction of the member of the
faculty or other person and
30 the amount paid by the state board of
regents. In the event of such re-
31 quest by a faculty member or other person
who is serving the one-year
32 waiting period pursuant to subsection
(1)(a) who is not required to make
33 the contribution as provided in subsection
(1)(b)(i) or (1)(b)(ii), the state
34 board of regents shall purchase for and on
behalf of each such person
35 whose salary has been so reduced a
retirement annuity contract or con-
36 tracts, the annual premiums for which shall
be equal to the sum of the
37 amount of the salary reduction of the
member of the faculty or other
38 person, but the state board of regents
shall not provide the sum equal to
39 the percentage amount, as prescribed by
K.S.A. 74-4925e and section 2,
40 and amendments thereto, of the gross annual
salary of such person as
41 provided for such person who is required to
make the contribution as
42 provided in subsection (1)(b)(i) or
(1)(b)(ii). Such retirement annuity con-
43 tracts may be purchased by the state board
of regents from companies
5
1 described in subsection (2)(a) and
subsection (2)(b) or from noninsurance
2 companies who offer retirement plans
that meet the requirements of
3 section 403(b) of the federal
internal revenue code of 1986, except that
4 the state board of regents may
require that the first 5% of the gross
5 amount of such person's annual salary
which is reduced under this sub-
6 section (4) and the amount equal to
the percentage amount, as prescribed
7 by K.S.A. 74-4925e and amendments
thereto, of the gross amount of such
8 person's annual salary which is
provided by the state board of regents for
9 the purchase of retirement annuity
contracts under this subsection (4), if
10 required to be provided under this
subsection (4), shall be used to pur-
11 chase such retirement annuity contracts
from such company or companies
12 as may be designated by the state board of
regents for such purposes.
13 The director of accounts and reports is
authorized to draw warrants on
14 the state treasurer upon the filing with
the director of proper vouchers
15 for the amount of the premium on the
retirement annuity contract to be
16 paid pursuant to the terms of such
contracts and this act.
17 (5) All employees
who are described in subsection (1)(a) and who
18 commence such employment on and after July
1, 1976, shall receive as-
19 sistance under subsection (1) and shall be
covered by a valid retirement
20 annuity contract issued by a company
described in subsection (2).
21 (6) Any employee
of the state board of regents or of an educational
22 institution under its management, other
than an elected official, who is
23 receiving or is eligible for assistance by
the state board of regents in the
24 purchase of a retirement annuity under this
section and who becomes
25 ineligible for such assistance because such
employee's position is reclas-
26 sified to a position in the classified
service under the Kansas civil service
27 act or who becomes ineligible for such
assistance because such employee
28 transfers to a position in the classified
service under the Kansas civil serv-
29 ice act with the state board of regents or
an educational institution under
30 its management, shall become a member of
the Kansas public employees
31 retirement system in accordance with the
provisions of subsection (5) of
32 K.S.A. 74-4911 and amendments thereto,
unless such employee files a
33 written election in the office of the
Kansas public employees retirement
34 system, in the form and manner prescribed
by the board of trustees
35 thereof, to remain eligible for assistance
by the state board of regents
36 under this section prior to the first day
of the first complete payroll period
37 occurring after the effective date of such
reclassification or transfer. Fail-
38 ure to file such written election shall be
presumed to be an election not
39 to remain eligible for assistance by the
state board of regents under this
40 section and to become a member of the
Kansas public employees retire-
41 ment system under subsection (5) of K.S.A.
74-4911 and amendments
42 thereto. Such election, whether to remain
eligible for such assistance or
43 to become a member of such system, shall be
effective as of the effective
6
1 date of such reclassification or
transfer and shall be irrevocable.
2 (7) The
state board of regents shall adopt uniform policies applicable
3 to members of the faculty and other
persons, who are employed by the
4 state board of regents or by any
educational institution under its man-
5 agement and who are in the
unclassified service under the Kansas civil
6 service act as provided in subsection
(1)(f) of K.S.A. 75-2935 and amend-
7 ments thereto, except health care
employees, as defined by subsection
8 (1)(f) of K.S.A. 75-2935 and
amendments thereto, for the purposes of
9 administering the provisions of this
section and the provision of retire-
10 ment annuities and other benefits
hereunder. All assistance provided by
11 the state board of regents for such
persons, and agreements entered into
12 therefor, pursuant to this section prior to
the effective date are hereby
13 authorized, confirmed and validated.
14 (8) Any employee
described in subsection (1)(a) who is on leave of
15 absence and who accepts a position in the
executive branch of govern-
16 ment may file a written election in the
office of the Kansas public em-
17 ployees retirement system, in the form and
manner prescribed by the
18 board, to remain eligible for assistance by
the state board of regents under
19 this section prior to the first day of the
first complete payroll period
20 occurring after the commencement of such
service in the executive
21 branch of government. Failure to file such
written election shall be pre-
22 sumed to be an election not to remain
eligible for assistance by the state
23 board of regents. The state board of
regents shall contribute an amount
24 toward the purchase of retirement annuities
on behalf of such employee
25 equal to the sum of the amounts provided in
subsection (1)(c).
26 New Sec.
2. On or after July 1, 2000, the percentage amount to be
27 contributed or provided by the state board
of regents under subsection
28 (1)(c)(ii) or subsection (4) of K.S.A.
74-4925, and amendments thereto,
29 shall be computed on the basis of 4%.
30 Sec.
3. K.S.A. 1999 Supp. 74-4925e is hereby amended to read as
31 follows: 74-4925e. On and after the
effective date of this act, the per-
32 centage amount to be contributed or
provided by the state board of re-
33 gents under subsection (1)(c)(i) or
subsection (4) of K.S.A. 74-4925 and
34 amendments thereto shall be computed on the
basis of 8.5% for payroll
35 periods chargeable to the fiscal
year ending June 30, 1994.
36 Sec. 4. K.S.A. 1999 Supp.
74-4925 and 74-4925e are hereby
37 repealed.
38 Sec. 5. This act shall
take effect and be in force from and after its
39 publication in the statute book.