Title 102 | Chapter 001 | Regulation 138
102 KAR 1:138.Crediting of interest for TRS 4 members.
Section 1.
Definitions.(1)
For TRS 4 members "Regular interest" is defined by KRS 161.220(13)(c).(2)
"TRS 4 members" means those individuals who establish membership in the retirement system on or after January 1, 2022.Section 2.
Regular interest for TRS 4 members for the supplemental benefit component and for the first sixty (60) months for the foundational benefit component shall be the rolling five (5) year yield on a thirty (30) year United States Treasury Bond as of the end of May prior to the most recently completed fiscal year. The thirty (30) year U.S. Treasury bond rate at the daily close of the markets is published by the Board of Governors of the Federal Reserve System and is posted on the website of the Federal Reserve Bank of St. Louis. The daily closing yield is titled "Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity, Quoted on an Investment Basis (DGS30)" and is found at https://fred.stlouisfed.org/series/DGS30 displayed as a percentage, not seasonally adjusted using the daily frequency.Section 3.
The rolling five (5) year yield shall be calculated by adding the closing yield for each trading day of the last five (5) years ending with the last trading day in the month of May and dividing by the number of trading days in the five (5) year period. The result is the regular interest rate to be created in accordance with KRS 161.220(13).102 KAR 1:138. Crediting of regular interest for TRS 4 members.HISTORY: (51 Ky.R. 430; eff. 430; eff. 11-8-2024.)
BRENDA MCGOWN, Chairperson
APPROVED BY AGENCY: June 17, 2024
FILED WITH LRC: July 12, 2024 at 3:30 p.m.
PUBLIC HEARING AND COMMENT PERIOD: A public hearing on this administrative regulation shall be held on 24 September 2024, at 9:00 a.m. Eastern Time at the offices of the retirement system at 479 Versailles Road, Frankfort, Kentucky. Individuals interested in being heard at this hearing shall notify this agency in writing by five workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing was received by that date, the hearing may be cancelled. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through 30 September 2024. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person.
CONTACT PERSON: Robert B. Barnes, Deputy Executive Secretary of Operations and General Counsel, Kentucky Teachers' Retirement System, 479 Versailles Road, Frankfort, Kentucky 40601, phone (502) 848-8508, fax (502) 573-0199, email Beau.Barnes@trs.ky.gov.
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact Person:
Robert B. Barnes
(1) Provide a brief summary of:
(a) What this administrative regulation does:
This administrative regulation sets forth the procedures for crediting interest to each TRS 4 member’s account.
(b) The necessity of this administrative regulation:
This administrative regulation ensures interest shall be accurately credited to TRS 4 members’ accounts.
(c) How this administrative regulation conforms to the content of the authorizing statutes:
This administrative regulation conforms to the content of the authorizing statutes by setting forth the procedures for crediting statutorily required interest to each TRS 4 member’s account.
(d) How this administrative regulation currently assists or will assist in the effective administration of the statutes:
This administrative regulation will assist in the effective administration of the statutes by ensuring interest shall be accurately credited to TRS 4 members’ accounts.
(2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(a) How the amendment will change this existing administrative regulation:
N/A.
(b) The necessity of the amendment to this administrative regulation:
N/A.
(c) How the amendment conforms to the content of the authorizing statutes:
N/A.
(d) How the amendment will assist in the effective administration of the statutes:
N/A.
(3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation:
Individuals who become active, contributing members with the retirement system on or after January 1, 2022. There are currently approximately 12, 788 TRS 4 members.
(4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:
(a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment:
(b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3):
There will be no cost to the members of the retirement system.
(c) As a result of compliance, what benefits will accrue to the entities identified in question (3):
Members will be credited the correct rate of interest.
(5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:
(a) Initially:
There is no cost to implement this regulation.
(b) On a continuing basis:
There is no continuing cost.
(6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation:
Administrative expenses of the retirement system are paid by restricted agency funds.
(7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment:
There is no increase in fees or funding required.
(8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees:
This regulation does not establish any fees or directly or indirectly increase any fees.
(9) TIERING: Is tiering applied?
Tiering is not applied, as all TRS 4 members are treated the same.
FISCAL IMPACT STATEMENT
(1) Identify each state statute, federal statute, or federal regulation that requires or authorizes the action taken by the administrative regulation.
KRS 161.310, 161.220(13), 161.580.
(2) Identify the promulgating agency and any other affected state units, parts, or divisions:
Teachers’ Retirement System
(a) Estimate the following for the first year:
Expenditures:
None.
Revenues:
None.
Cost Savings:
None.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
There will be no difference.
(3) Identify affected local entities (for example: cities, counties, fire departments, school districts):
None.
(a) Estimate the following for the first year:
Expenditures:
None.
Revenues:
None.
Cost Savings:
None.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
There will be no difference.
(4) Identify additional regulated entities not listed in questions (2) or (3):
None.
(a) Estimate the following for the first year:
Expenditures:
None.
Revenues:
None.
Cost Savings:
None.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
There will be no difference.
(5) Provide a narrative to explain the:
(a) Fiscal impact of this administrative regulation:
There is no fiscal impact.
(b) Methodology and resources used to determine the fiscal impact:
There is no fiscal impact.
(6) Explain:
(a) Whether this administrative regulation will have an overall negative or adverse major economic impact to the entities identified in questions (2) - (4). ($500,000 or more, in aggregate)
This administrative regulation will not have an overall negative or adverse major impact to the identities identified in questions (2)-(4).
(b) The methodology and resources used to reach this conclusion:
There is no economic impact.
102 KAR 1:138.Crediting of interest for TRS 4 members.
Section 1.
Definitions.(1)
For TRS 4 members "Regular interest" is defined by KRS 161.220(13)(c).(2)
"TRS 4 members" means those individuals who establish membership in the retirement system on or after January 1, 2022.Section 2.
Regular interest for TRS 4 members for the supplemental benefit component and for the first sixty (60) months for the foundational benefit component shall be the rolling five (5) year yield on a thirty (30) year United States Treasury Bond as of the end of May prior to the most recently completed fiscal year. The thirty (30) year U.S. Treasury bond rate at the daily close of the markets is published by the Board of Governors of the Federal Reserve System and is posted on the website of the Federal Reserve Bank of St. Louis. The daily closing yield is titled "Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity, Quoted on an Investment Basis (DGS30)" and is found at https://fred.stlouisfed.org/series/DGS30 displayed as a percentage, not seasonally adjusted using the daily frequency.Section 3.
The rolling five (5) year yield shall be calculated by adding the closing yield for each trading day of the last five (5) years ending with the last trading day in the month of May and dividing by the number of trading days in the five (5) year period. The result is the regular interest rate to be created in accordance with KRS 161.220(13).102 KAR 1:138. Crediting of regular interest for TRS 4 members.HISTORY: (51 Ky.R. 430; eff. 430; eff. 11-8-2024.)
BRENDA MCGOWN, Chairperson
APPROVED BY AGENCY: June 17, 2024
FILED WITH LRC: July 12, 2024 at 3:30 p.m.
PUBLIC HEARING AND COMMENT PERIOD: A public hearing on this administrative regulation shall be held on 24 September 2024, at 9:00 a.m. Eastern Time at the offices of the retirement system at 479 Versailles Road, Frankfort, Kentucky. Individuals interested in being heard at this hearing shall notify this agency in writing by five workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing was received by that date, the hearing may be cancelled. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through 30 September 2024. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person.
CONTACT PERSON: Robert B. Barnes, Deputy Executive Secretary of Operations and General Counsel, Kentucky Teachers' Retirement System, 479 Versailles Road, Frankfort, Kentucky 40601, phone (502) 848-8508, fax (502) 573-0199, email Beau.Barnes@trs.ky.gov.
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact Person:
Robert B. Barnes
(1) Provide a brief summary of:
(a) What this administrative regulation does:
This administrative regulation sets forth the procedures for crediting interest to each TRS 4 member’s account.
(b) The necessity of this administrative regulation:
This administrative regulation ensures interest shall be accurately credited to TRS 4 members’ accounts.
(c) How this administrative regulation conforms to the content of the authorizing statutes:
This administrative regulation conforms to the content of the authorizing statutes by setting forth the procedures for crediting statutorily required interest to each TRS 4 member’s account.
(d) How this administrative regulation currently assists or will assist in the effective administration of the statutes:
This administrative regulation will assist in the effective administration of the statutes by ensuring interest shall be accurately credited to TRS 4 members’ accounts.
(2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(a) How the amendment will change this existing administrative regulation:
N/A.
(b) The necessity of the amendment to this administrative regulation:
N/A.
(c) How the amendment conforms to the content of the authorizing statutes:
N/A.
(d) How the amendment will assist in the effective administration of the statutes:
N/A.
(3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation:
Individuals who become active, contributing members with the retirement system on or after January 1, 2022. There are currently approximately 12, 788 TRS 4 members.
(4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:
(a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment:
(b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3):
There will be no cost to the members of the retirement system.
(c) As a result of compliance, what benefits will accrue to the entities identified in question (3):
Members will be credited the correct rate of interest.
(5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:
(a) Initially:
There is no cost to implement this regulation.
(b) On a continuing basis:
There is no continuing cost.
(6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation:
Administrative expenses of the retirement system are paid by restricted agency funds.
(7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment:
There is no increase in fees or funding required.
(8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees:
This regulation does not establish any fees or directly or indirectly increase any fees.
(9) TIERING: Is tiering applied?
Tiering is not applied, as all TRS 4 members are treated the same.
FISCAL IMPACT STATEMENT
(1) Identify each state statute, federal statute, or federal regulation that requires or authorizes the action taken by the administrative regulation.
KRS 161.310, 161.220(13), 161.580.
(2) Identify the promulgating agency and any other affected state units, parts, or divisions:
Teachers’ Retirement System
(a) Estimate the following for the first year:
Expenditures:
None.
Revenues:
None.
Cost Savings:
None.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
There will be no difference.
(3) Identify affected local entities (for example: cities, counties, fire departments, school districts):
None.
(a) Estimate the following for the first year:
Expenditures:
None.
Revenues:
None.
Cost Savings:
None.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
There will be no difference.
(4) Identify additional regulated entities not listed in questions (2) or (3):
None.
(a) Estimate the following for the first year:
Expenditures:
None.
Revenues:
None.
Cost Savings:
None.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
There will be no difference.
(5) Provide a narrative to explain the:
(a) Fiscal impact of this administrative regulation:
There is no fiscal impact.
(b) Methodology and resources used to determine the fiscal impact:
There is no fiscal impact.
(6) Explain:
(a) Whether this administrative regulation will have an overall negative or adverse major economic impact to the entities identified in questions (2) - (4). ($500,000 or more, in aggregate)
This administrative regulation will not have an overall negative or adverse major impact to the identities identified in questions (2)-(4).
(b) The methodology and resources used to reach this conclusion:
There is no economic impact.