Session Law

Identifying Information:L. 2001 ch. 209
Other Identifying Information:2001 House Substitute for Senate Bill 322
Tax Type:Other
Brief Description:An Act concerning retirement; relating to the Kansas public employees retirement system and systems thereunder; assignment of certain positions under the Kansas civil service act; employee bonus awards; certain contracts for professional or consultant services, procedures and reports; benefits; employer certification of member contributions; pur- chase of service credit; postretirement benefit increase; lump-sum payments; disability benefits; payments to beneficiaries; executive director; employer contributions; amend- ing K.S.A. 74-4934, 74-4978h and 74-49,102 and K.S.A. 2000 Supp. 13-14a07, 14-10a07, 20-2603, 20-2610a, 74-4902, 74-4904, 74-4908, 74-4911e, 74-4914, 74-4914e, 74-4915, 74-4915b, 74-4915c, 74-4916, 74-4918, 74-4918a, 74-4919, 74-4919b, 74-4920, 74-4921, 74-4922, 74-4925, 74-4927, 74-4927f, 74-4927h, 74-4932, 74-4940, 74-4957, 74-4957a, 74-4958, 74-4958a, 74-4959, 74-4960, 74-4960a, 74-4963, 74-4963a, 74-4964, 74-4964a, 74-4965, 74-4967, 74-4989, 74-4998c, 74-49,128, 75-37,132 and 75-37,135 and repealing the existing sections.
Keywords:


Body:

CHAPTER 209

HOUSE Substitute for SENATE BILL No. 322


An Act concerning retirement; relating to the Kansas public employees retirement system

and systems thereunder; assignment of certain positions under the Kansas civil service

act; employee bonus awards; certain contracts for professional or consultant services,

procedures and reports; benefits; employer certification of member contributions; pur-

chase of service credit; postretirement benefit increase; lump-sum payments; disability

benefits; payments to beneficiaries; executive director; employer contributions; amend-

ing K.S.A. 74-4934, 74-4978h and 74-49,102 and K.S.A. 2000 Supp. 13-14a07, 14-10a07,

20-2603, 20-2610a, 74-4902, 74-4904, 74-4908, 74-4911e, 74-4914, 74-4914e, 74-4915,

74-4915b, 74-4915c, 74-4916, 74-4918, 74-4918a, 74-4919, 74-4919b, 74-4920, 74-4921,

74-4922, 74-4925, 74-4927, 74-4927f, 74-4927h, 74-4932, 74-4940, 74-4957, 74-4957a,

74-4958, 74-4958a, 74-4959, 74-4960, 74-4960a, 74-4963, 74-4963a, 74-4964, 74-4964a,

74-4965, 74-4967, 74-4989, 74-4998c, 74-49,128, 75-37,132 and 75-37,135 and repealing

the existing sections.




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

Section 1. K.S.A. 2000 Supp. 13-14a07 is hereby amended to read

as follows: 13-14a07. (a) If any officer or member of a police or fire

department, while in the performance of such officer's or member's du-

ties, 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) Pursuant to the provisions of K.S.A. 2000 Supp. 74-49,128, and

amendments thereto, 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 per-

formance of such officer'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

provisions 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. 2. K.S.A. 2000 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) Pursuant to the provisions of K.S.A. 2000 Supp. 74-49,128, and

amendments thereto, 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 per-

formance of such officer'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

provisions 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. 3. K.S.A. 2000 Supp. 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 retire-

ment 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 director of the Kansas public

employees 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 K.S.A. 2000 Supp. 74-49,123 and

amendments thereto, each participating employer, pursuant to the pro-

visions of section 414(h)(2) of the federal internal revenue code, shall

pick up and pay the contributions which would otherwise be payable by

members 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 director 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. 4. K.S.A. 2000 Supp. 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 election 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 circumstances may an option be changed or canceled nor the

named joint annuitant 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 K.S.A. 2000 Supp. 74-49,123 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.

(7) Lump sum payment at retirement. (A) Pursuant to this option,

the judge must specify a lump sum amount to be paid to the judge upon

the judge's retirement. The lump sum amount will be based on the ac-

tuarial present value of the benefit as provided in K.S.A. 20-2610, and

amendments thereto. The lump sum amount designated by the judge

must be in 10% increments and shall not exceed 1/2 of the actuarial present

value of the benefit provided in K.S.A. 20-2610, and amendments thereto.

(B) Pursuant to this option, the judge must elect to have the remain-

ing actuarial present value paid in a monthly amount under the provisions

of K.S.A. 20-2610, and amendments thereto, or subsections (c)(1)

through (c)(6) of this section.

(C) The amount of any retirement benefit payable pursuant to this

subsection shall remain as provided in this subsection even in the event

that the designated joint annuitant pursuant to subsections (c)(1), (c)(2)

or (c)(3) predeceases the retirant. In the event that the designated joint

annuitant pursuant to subsection (c)(1), (c)(2) or (c)(3), under this option

predeceases the retirant, the amount of the retirement benefit otherwise

payable to the retirant under the 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) The provisions of this subsection shall be effective on and after

July 1, 2001.

(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. 5. K.S.A. 2000 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 the provisions of articles 49 and 49a of the Kansas

Statutes Annotated and amendments 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.

(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, as the board

deems appropriate, 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 ``com-

pensation'' shall have the meaning as provided in K.S.A. 2000 Supp. 74-

49,123 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 employee who is a contributing member

of the United States civil service retirement system; (B) any employee

who is a contributing member of the federal employees retirement sys-

tem; (C) any employee who is a leased employee of a participating em-

ployer. ``Leased employee'' means the same as provided in section 414 of

the federal internal revenue code; and (D) 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. Employees shall include any member of a board

of county commissioners of any county and any council member or com-

missioner of a city whose compensation is equal to or exceeds $5,000 per

year;

(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 director'' 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. In the case of any former member who was eligible for assistance

pursuant to K.S.A. 74-4925 and amendments thereto prior to July 1, 1998,

for the purpose of calculating final average salary of such member, such

member's final average salary shall be based on such member's salary

while a member of the system or while eligible for assistance pursuant to

K.S.A. 74-4925 and amendments thereto, whichever is greater;

(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; any former employee who

has made the required contributions to the system and has not received

a refund if such member is within five years of termination of employment

with a participating employer; or any former employee who has made the

required contributions to the system, has not yet received a refund and

has been granted a vested benefit;

(22) ``military service'' means service in the uniformed forces of the

United States, 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 commissioned corps of the United States public health

service, which service is immediately preceded by a period of employ-

ment 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 participating 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 pe-

riod within which the employee must return to employment with a par-

ticipating 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 the 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. If

there is no surviving spouse, the last warrant shall be payable to the

designated beneficiary;

(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;

(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, as the board deems appropriate, 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 ``salary'' shall have the meaning as pro-

vided in K.S.A. 2000 Supp. 74-49,123 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 com-

puted 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. 6. K.S.A. 2000 Supp. 74-4904 is hereby amended to read as

follows: 74-4904. (1) The system may sue and be sued in its official name,

but its trustees, officers, employees and agents shall not be personally

liable for acts of the system unless such person acted with willful, wanton

or fraudulent misconduct or intentionally tortious conduct. Any agree-

ment in settlement of litigation involving the system and the investment

of moneys of the fund is a public record as provided in K.S.A. 45-215 et

seq. and amendments thereto and subject to the provisions of that act.

The service of all legal process and of all notices which may be required

to be in writing, whether legal proceedings or otherwise, shall be had on

the executive secretary director at such executive secretary's director's

office. All actions or proceedings directly or indirectly against the system

shall be brought in Shawnee county.

(2) Any person aggrieved by any order or decision of the board made

without a hearing, may, within 30 days after notice of the order or decision

of the board make written request to the board for a hearing thereon.

The board shall hear such party or parties in accordance with the provi-

sions of the Kansas administrative procedure act at its next regular meet-

ing or at a special meeting within 60 days after receipt of such request.

For the purpose of any hearing under this section, the board may appoint

one or more presiding officers. Any such presiding officer shall be a mem-

ber of the board, an employee of the board or any other person designated

by the board to serve as such presiding officer. Any such appointment

shall apply to a particular hearing or to a set or class of hearings as spec-

ified by the board in making such appointment. The board shall review

an initial order resulting from a hearing under this section. Any member

of the board who serves as a presiding officer shall be reimbursed for

actual and necessary expenses and shall receive compensation in an

amount fixed by the board not to exceed the per diem compensation

allowable for members of the board. The board is hereby authorized to

enter into a contract with any other person designated by the board to

serve as a presiding officer who is not a member or employee of the board

and to provide for reimbursement for actual and necessary expenses and

compensation for such person serving as a presiding officer.

Sec. 7. K.S.A. 2000 Supp. 74-4908 is hereby amended to read as

follows: 74-4908. (1) The board shall appoint an executive secretary di-

rector and shall establish the compensation therefor. Subject to the di-

rection of the board, the executive secretary director shall be the man-

aging officer of the system and as such shall have charge of the office,

records and supervision and direction of the employees of the system.

The executive secretary director shall be in the unclassified service under

the Kansas civil service act.

(2) The executive secretary director shall recommend to the board

the administrative organization, the number and qualifications of em-

ployees necessary to carry out the intent of this act and the directions of

the board. Upon approval of the board, the executive secretary director

is authorized to employ such persons in accordance with the Kansas civil

service act.

(3) The board of trustees shall select and employ or retain a qualified

actuary who shall serve at its pleasure as its technical advisor on matters

regarding operation of the system. The actuary shall:

(a) Make an annual valuation of the liabilities and reserves of the

system, and a determination of the contributions required by the system

to discharge its liabilities and administrative costs under this act, and

recommend to the board rates of employer contributions required to

establish and maintain the system on an actuarial reserve basis. Such

recommended employer contributions shall not be based on any other

purpose outside of the needs of the system as prescribed by this subsec-

tion.

(b) As soon after the effective date as practicable and once every

three years thereafter, make a general investigation of the actuarial ex-

perience under the system including mortality, retirement, employment

turnover and interest, and recommend actuarial tables for use in valua-

tions and in calculating actuarial equivalent values based on such inves-

tigation.

(c) Cooperate with and provide any assistance to the actuary, the

legislative coordinating council and the joint committee on pensions, in-

vestments and benefits related to the independent actuarial audit and

evaluation as provided in K.S.A. 2000 Supp. 74-4908a and amendments

thereto.

(d) Perform such other duties as may be assigned by the board.

(4) The attorney general of the state shall furnish such legal services

as may be necessary upon receipt of a request from the board, except

that legal services may be furnished by other counsel as the board in its

discretion deems necessary and prudent.

(5) The board shall employ or retain qualified investment counsel or

counselors or may negotiate with a trust company to assist and advise in

the judicious investment of funds as herein provided.

(6) The board may appoint a deputy executive secretary director, an

investment officer, an investment analyst, a real estate manager, a direct

placement manager, a chief fiscal officer, a member services officer, an

attorney, an assistant investment officer and, an information resource of-

ficer and an investment operations analyst to advise and assist the board

in the performance of powers, duties and functions relating to the man-

agement and investment of the fund and in such other matters as may be

directed by the board. Such appointed officers and employees shall be in

the unclassified service under the Kansas civil service act. The compen-

sation of such appointed officers and employees shall be established by

the board.

(7) The board may establish a program for the paying of bonus

awards to unclassified officers and employees pursuant to procedures es-

tablished by the board.

Sec. 8. K.S.A. 2000 Supp. 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 employees 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 em-

ployer. Such person's election is valid only if such person files notice of

such election in the office of the executive secretary director of the Kansas

public employees 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. 9. K.S.A. 2000 Supp. 74-4914 is hereby amended to read as

follows: 74-4914. (1) The normal retirement date for a member of the

system shall be the first day of the month coinciding with or following

termination of employment with any participating employer not followed

by employment with any participating employer within 30 days and the

attainment of age 65 or, commencing July 1, 1993, age 62 with the com-

pletion of 10 years of credited service or the first day of the month co-

inciding with or following the date that the total of the number of years

of credited service and the number of years of attained age of the member

is equal to or more than 85. In no event shall a normal retirement date

for a member be before six months after the entry date of the participating

employer by whom such member is employed. A member may retire on

the normal retirement date or on the first day of any month thereafter

upon the filing with the office of the retirement system of an application

in such form and manner as the board shall prescribe. Nothing herein

shall prevent any person, member or retirant from being employed, ap-

pointed or elected as an employee, appointee, officer or member of the

legislature. Elected officers may retire from the system on any date on

or after the attainment of the normal retirement date, but no retirement

benefits payable under this act shall be paid until the member has ter-

minated such member's office.

(2) No retirant shall make contributions to the system or receive serv-

ice credit for any service after the date of retirement.

(3) Any member who is an employee of an affiliating employer pur-

suant to K.S.A. 74-4954b and amendments thereto and has not withdrawn

such member's accumulated contributions from the Kansas police and

firemen's retirement system may retire before such member's normal

retirement date on the first day of any month coinciding with or following

the attainment of age 55.

(4) Any member may retire before such member's normal retirement

date on the first day of any month coinciding with or following termination

of employment with any participating employer not followed by employ-

ment with any participating employer within 30 days and the attainment

of age 55 with the completion of 10 years of credited service, but in no

event before six months after the entry date, upon the filing with the

office of the retirement system of an application for retirement in such

form and manner as the board shall prescribe.

(5) If a retirant who retired on or after July 1, 1988, is employed or

appointed in or to any position or office for which compensation for serv-

ice is paid in an amount equal to $15,000 or more in any one such calendar

year, by any participating employer for which such retirant was employed

or appointed during the final two years of such retirant's participation,

such retirant shall not receive any retirement benefit for any month for

which such retirant serves in such position or office. The participating

employer shall report to the system within 30 days of when the compen-

sation paid to the retirant is equal to or exceeds any limitation provided

by this section. Any retirant employed by a participating employer shall

not make contributions nor receive additional credit under such system

for such service except as provided by this section. Upon request of the

executive secretary director of the system, the secretary of revenue shall

provide such information as may be needed by the executive secretary

director to carry out the provisions of this act. The provisions of this

subsection shall not apply to retirants employed as substitute teachers or

officers, employees or appointees of the legislature. The provisions of this

subsection shall not apply to members of the legislature prior to January

8, 2000. The provisions of this subsection shall not apply to any other

elected officials prior to the term of office of such elected official which

commences on or after July 1, 2000. The provisions of this subsection

shall apply to any other elected official on and after the term of office of

such other elected official which commences on or after July 1, 2000.

Except as otherwise provided, commencing January 8, 2001, the provi-

sions of this subsection shall apply to members of the legislature. For

determination of the amount of compensation paid pursuant to this sub-

section, for members of the legislature, compensation shall include any

amount paid as provided pursuant to subsections (a), (b), (c) and (d) of

K.S.A. 46-137a, and amendments thereto, or pursuant to K.S.A. 46-137b,

and amendments thereto. Notwithstanding any provision of law to the

contrary, when a member of the legislature is paid an amount of com-

pensation of $15,000 or more in any one calendar year, the member may

continue to receive any amount provided in subsections (b) and (d) of

K.S.A. 46-137a, and amendments thereto, and still be entitled to receive

such member's retirement benefit.

(6) For purposes of this section, any employee of a local governmental

unit which has its own pension plan who becomes an employee of a

participating employer as a result of a merger or consolidation of services

provided 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 years of credited service require-

ments contained in this section.

Sec. 10. K.S.A. 2000 Supp. 74-4914e is hereby amended to read as

follows: 74-4914e. (1) As used in this section:

(a) ``Correctional employee'' means any member of the system who

is a security officer or other employee of the department of corrections

and who is in a position for which the duties and responsibilities involve

regular contact with inmates as certified by the secretary of corrections;

(b) ``disability'' means the total inability to perform permanently the

duties of the position of a correctional employee in which the correctional

employee was employed at the time of disability;

(c) ``service-connected'' means any physical or mental disability re-

sulting from external force, violence or disease occasioned by an act of

duty as a correctional employee and includes, for any correctional em-

ployee after five years of credited service, any death or disability resulting

from a heart disease or disease of the lung or respiratory tract, except that

in the event that the correctional employee 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

or disease of the lung or respiratory tract shall not apply until such cor-

rectional employee has again become a contributing member for a period

of not less than two years or unless clear and precise evidence is presented

that the heart disease or disease of the lung or respiratory tract was in

fact occasioned by an act of duty as a correctional employee; and

(d) ``final average salary'' means the average highest annual compen-

sation paid to a correctional employee for any three of the last five years

of participating service immediately preceding the date of disability, or if

participating service is less than three years, then the average annual

compensation paid to the correctional employee during the full period of

participating service or if a correctional employee has less than one cal-

endar year of participating service the correctional employee's final av-

erage salary shall be computed by multiplying the correctional employee's

highest monthly salary received in that year by 12.

(2) If any active contributing correctional employee becomes totally

and permanently disabled due to service-connected causes as defined in

subsection (1), such correctional employee shall be retired and the fol-

lowing benefits shall become payable and shall continue until the correc-

tional employee's death or until the correctional employee 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 director 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

shall prescribe, is filed by the correctional employee or the correctional

employee's authorized representative in the office of the executive sec-

retary director of the board within two years of the date of disability:

(a) The correctional employee shall receive a retirement benefit

equal to 50% of the correctional employee's final average salary. Such

benefit shall accrue from the day upon which the correctional employee

ceases to draw compensation.

(b) Each of the correctional employee's unmarried children under

the age of 18 years or each of the correctional employee's children under

the age of 23 years who are full-time students as provided in K.S.A. 74-

49,117 and amendments thereto shall receive an annual benefit equal to

10% of the correctional employee's final average salary. Such benefit shall

accrue from the day upon which the correctional employee ceases to draw

compensation and shall end on the first day of the month in which each

such child or children attains the age of 18 years, die or marry, whichever

occurs earlier or in which each such child or children attains 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.

(c) In no case shall the total benefits payable under paragraphs (a)

and (b) of this subsection (2) be in excess of 75% of the correctional

employee's final average salary.

(d) In the event a correctional employee who is retired under para-

graph (a) of this subsection (2), dies within two years after the date of

such retirement, then benefits may be payable under subsection (2) of

K.S.A. 74-4916 and amendments thereto.

(e) In the event a correctional employee who is retired under para-

graph (a) of this subsection (2), 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 disability resulted, then benefits may be

payable under subsection (2) of K.S.A. 74-4916 and amendments thereto.

(f) In the event a correctional employee who is retired under sub-

section (2) dies after the date of retirement and no benefits are payable

under paragraphs (d) and (e) the following benefits shall be payable:

(i) To the correctional employee's spouse, if lawfully wedded to the

correctional employee at the time of the correctional employee's death,

a lump-sum benefit equal to 50% of the correctional employee's final

average salary at the time of the correctional employee's retirement.

(ii) To the correctional employee's spouse, if lawfully wedded to the

correctional employee at the time of the correctional employee's death,

an annual benefit equal to 50% of the correctional employee's retirement

benefit payable in monthly installments, to accrue from the first day of

the month following the correctional employee's date of death and ending

on the first day of the month in which the spouse dies. 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 in equal shares to such children and each child's share shall end

on the first 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.

The provisions of this subsection shall apply in all cases of such cor-

rectional employees who die after October 1, 1996.

(3) If any correctional employee who is an active contributing mem-

ber prior to such correctional employee'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 inten-

tional act of the correctional employee, such correctional employee shall

be retired and the following benefit shall become payable and shall con-

tinue until the correctional employee's death or until the correctional

employee 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 director 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 director of the board within two

years of the date of disability:

A retirement benefit equal to 2% of the correctional employee's final

average salary multiplied by the number of years of credited service, ex-

cept that such retirement benefit shall be at least equal to 25% of the

member's final average salary but not to exceed the amount of the re-

tirement benefit provided in paragraph (a) of subsection (2). Such benefit

shall not become payable until satisfactory evidence is presented to the

board that the correctional employee is and has been for a period of 180

days totally and permanently disabled, but benefits shall accrue from the

day upon which the correctional employee ceases to draw compensation.

(4) Any correctional employee who is employed for compensation by

an employer other than the department of corrections and whose disa-

bility is incurred in the course of such other employment shall not be

eligible for any of the benefits provided in subsection (3).

(5) If a correctional employee becomes totally and permanently dis-

abled and no benefits are payable under subsections (2) or (3), the sum

of the correctional employee's accumulated contributions shall be paid to

the correctional employee.

(6) Any correctional employee 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 examiners re-

port to the board that the retirant is physically able and capable of resum-

ing employment with the participating employer from whose employment

the correctional employee retired, the disability benefits shall terminate.

A retirant who has been receiving 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 accrued by virtue of previous service.

(7) 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.

(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 correctional employee's rights in and

to all benefits under the system may be revoked by the board.

(9) Any retirement benefits payable under the provisions of this sec-

tion shall be in lieu of all other benefits under the system.

(10) Each correctional employee shall report to such member's par-

ticipating employer any event or act of duty causing disability within 200

days after such event or act of duty. The department of corrections shall

file in the office of the executive secretary director 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.

(11) Benefits payable under this section shall be reduced by the orig-

inal amount of any disability benefits received under the federal social

security act or the workers compensation act. For any correctional em-

ployee already retired on the effective date of this act, no reduction of

the original social security benefits shall be applicable to benefits paid

prior to the effective date of this act. In no case shall a correctional em-

ployee who is entitled to receive benefits under this section receive less

than $100 per month.

(12) The provisions of this section shall apply to disabilities occurring

after June 30, 1982, and prior to July 1, 1995. At the direction of the

board of trustees, the actuary shall conduct an experience evaluation of

benefits payable under this section and the board shall provide copies of

such study to the governor and members of the legislature.

(13) The provisions of K.S.A. 74-4927 and amendments thereto re-

lating to insured disability benefits shall not be applicable to correctional

employees subject to the provisions of this section.

(14) In the event a correctional employee who is retired under sub-

section (3) dies after the date of retirement and no benefits are payable

under that subsection, the following benefits shall be payable:

(i) To the correctional employee's spouse, if lawfully wedded to the

correctional employee at the time of the correctional employee's death,

a lump-sum benefit equal to 50% of the correctional employee's final

average salary at the time of the correctional employee's retirement.

(ii) To the correctional employee's spouse, if lawfully wedded to the

correctional employee at the time of the correctional employee's death,

an annual benefit equal to 50% of the correctional employee's retirement

benefit payable in monthly installments, to accrue from the first day of

the month following the correctional employee's date of death and ending

on the first day of the month in which the spouse dies. 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 in equal shares to such children and each child's share shall end

on the first 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.

The provisions of this subsection shall apply in all cases of such cor-

rectional employees who die after October 1, 1996.

Sec. 11. K.S.A. 2000 Supp. 74-4915 is hereby amended to read as

follows: 74-4915. (1) Any member who retires on or after such member's

normal retirement date shall be entitled to receive an annual retirement

benefit equal to the sum obtained by adding an amount for participating

service and an amount for prior service determined as provided in this

section. The amount for prior service shall be equal to 1% of the mem-

ber's prior service annual salary multiplied by the number of years of

prior service entitled to credit as provided in K.S.A. 74-4913 and amend-

ments thereto, except that for members retiring on or after July 1, 1981,

who were last employed by a participating employer which had affiliated

with the system under K.S.A. 74-4910, 74-4912, 74-4929 or 74-4991 and

amendments thereto, and for the period commencing January 1, 1986,

for members retiring before July 1, 1981, who were last employed by a

participating employer which had affiliated with the system under K.S.A.

74-4910, 74-4912, 74-4929 or 74-4991 and amendments thereto, except

that any increase in benefits under this section shall be reduced by any

postretirement benefit adjustments received by such member prior to

July 2, 1985, the amount for prior service shall be calculated using final

average salary in lieu of prior service annual salary and, in the case of any

such member who became a member under subsection (3) of K.S.A. 74-

4925 and amendments thereto and for whom a final average salary cannot

be otherwise determined, such member's final average salary shall be

based on all service for which such member received assistance in a plan

under subsection (2) of K.S.A. 74-4925 and amendments thereto as cer-

tified by such employer upon request of the board. For any member who

retires on or after July 1, 1993, the amount for participating service shall

be equal to the total of 1.75% of the member's final average salary mul-

tiplied by the number of years of participating service.

(2) (A) Any member who retires on or after July 1, 1993, but before

the normal retirement date and has attained age 60 but has not attained

age 62 with the completion of 10 years of credited service, shall receive

an annual retirement benefit equal to the annual retirement benefit pay-

able had the member retired on the normal retirement date but based

upon the member's final average salary and years of participating and

prior service credited to the date of actual retirement reduced by an

amount equal to the product of (i) such annual retirement benefit payable

had the member retired on the normal retirement date, multiplied by (ii)

the product of .2% 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 62.

(B) Any member who retires on or after July 1, 1993, but before the

normal retirement date and has attained age 55 but has not attained age

60 with the completion of 10 years of credited service, shall receive an

annual retirement benefit equal to the annual retirement benefit payable

had the member retired on the normal retirement date but based upon

the member's final average salary and years of participating and prior

service credited to the date of actual retirement reduced by an amount

equal to the total of: (i) (a) The product of such annual retirement benefit

payable had the member retired on the normal retirement date, multi-

plied by (b) the product of .6% 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 60; and

(ii) on and after July 1, 1993, the product of such annual retirement

benefit payable had the member retired on the normal retirement date,

multiplied by 4.8%.

(3) Upon death of a retirant, there shall be paid to such retirant's

beneficiary an amount equal to the excess, if any, of such retirant's ac-

cumulated contributions over the sum of all retirement benefit payments

made.

(4) Such annual retirement benefits shall be paid in equal monthly

installments except, that the board may provide for the payment of re-

tirement benefits which total less than $240 a year on other than a

monthly basis.

(5) In the event that an application in such form as may be prescribed

by the board for any amount due under the provisions of this act, is not

filed with the office of the retirement system by the person entitled to

same within five years of the date such amount became due and payable,

an amount equal to same shall be transferred to the retirement benefit

accumulation reserve and such amount shall no longer be due and pay-

able, except that if any such person shall present evidence satisfactory to

the board that such person's failure to file such application within that

time period was due to lack of knowledge or incapacity on such person's

part, the amount equal to the amount originally due shall be transferred

from the retirement benefit accumulation reserve to the reserve or re-

serves from which such transfer was initially made and the amount orig-

inally due shall be paid to such person.

(6) The participating employer, when an employee files an application

for retirement, shall certify to the system all member contributions of such

employee which have not been reported previously. In the event the

amount certified results in an overpayment of retirement benefits, the

employer shall be held responsible for the contribution amount previously

certified from the time of commencement of the overpayment of retirement

benefits until the time that such overpayment is discovered by the system.

At the time that such overpayment of retirement benefits is discovered by

the system, the system shall adjust the amount of retirement benefits paid

to the employee to the correct amount based on the participating em-

ployer's certification of member contributions which had not been pre-

viously reported. The participating employer of the employee who has

had such member's retirement benefits adjusted as provided in this sub-

section shall notify such employee of such overpayment and such adjust-

ment of retirement benefits. If the contributions previously certified are

lower than the actual amount reported, the employer shall be responsible

for remitting the correct amount and the member's monthly benefit shall

be recalculated based on the amount reported by the employer. When an

employee in school employment files such an application, the participating

employer responsible for any such amounts as provided in this subsection

shall be the employee's eligible employer as specified in subsection (1), (2)

or (3) of K.S.A. 74-4931, and amendments thereto, and shall not be the

state of Kansas. The provisions of law in effect on the retirement date of

a member under the system shall govern the retirement benefit payable

to the retirant, any joint annuitant and any beneficiary.

Sec. 12. K.S.A. 2000 Supp. 74-4915b is hereby amended to read as

follows: 74-4915b. (a) Notwithstanding any provision of law to the con-

trary, any member who is a member of the legislature who is also em-

ployed by another participating employer of the Kansas public employees

retirement system other than the legislature and is an eligible employee

as defined in K.S.A. 74-4902, and amendments thereto, may retire from

service from such other participating employer and may continue to serve

as a member of the legislature, except that, commencing January 8, 2001,

such member of the legislature shall not receive any retirement benefit

for any month for which such member of the legislature serves when

compensation as provided in subsection (e) is paid in an amount equal to

$15,000 or more in any one such calendar year. Such member's retire-

ment benefit shall be based on the final average salary of such member

for service prior to service as a member of the legislature.

(b) No such member who is a member of the legislature who retires

as provided in subsection (a) and who continues to serve as a member of

the legislature shall accrue any additional service credit for such service

as a member of the legislature or be entitled to any benefit provided in

K.S.A. 74-4916 or 74-4927, and amendments thereto.

(c) When such member who is a member of the legislature retires as

a member of the legislature, such member's final average salary shall be

recalculated to include legislative compensation, if such inclusion of such

compensation increases such member's final average salary, of the mem-

ber up to the time of retirement from the participating employer other

than the legislature as provided in subsection (a).

(d) No such member who is a member of the legislature shall accrue

any additional retirement benefits for the period of time between the

date the member retired from the participating employer other than the

legislature and the date such member retires as a member of the legis-

lature.

(e) The participating employer shall report to the system within 30

days of when the compensation paid to the retirant is equal to or exceeds

any limitation provided in subsection (a). Upon request of the executive

secretary director of the system, the secretary of revenue shall provide

such information as may be needed by the executive secretary director

to carry out the provisions of this section. For determination of the

amount of legislative compensation, as provided in subsection (a) and this

subsection, for members of the legislature, compensation shall include

any amount paid as provided pursuant to subsections (a), (b), (c) and (d)

of K.S.A. 46-137a, and amendments thereto, or pursuant to K.S.A. 46-

137b, and amendments thereto. Notwithstanding any provision of law to

the contrary, when a member of the legislature is paid an amount of

compensation of $15,000 or more in any one calendar year, the member

may continue to receive any amount provided in subsections (b) and (d)

of K.S.A. 46-137a, and amendments thereto, and still be entitled to re-

ceive such member's retirement benefit.

(f) The provisions of this section are intended to further the public

policy of encouraging persons to serve in elective public office by per-

mitting a member of the system, who is a member through employment

with a participating employer in a nonelected position and who holds an

elected office as a member of the legislature and who is also a member

of the system for such elected office, to retire under the system from

such nonelected employment and to continue serving in such elected

public office.

(g) The words and phrases used in this section have the meanings

respectively ascribed thereto by K.S.A. 74-4902, and amendments

thereto, unless a different meaning is plainly required by the context.

(h) The provisions of this section shall be effective on and after July

1, 2000.

Sec. 13. K.S.A. 2000 Supp. 74-4915c is hereby amended to read as

follows: 74-4915c. (a) Notwithstanding any provision of law to the con-

trary, any member who is an elected local official of a municipality who

is also employed by another participating employer of the Kansas public

employees retirement system other than the municipality and is an eli-

gible employee as defined in K.S.A. 74-4902, and amendments thereto,

may retire from service from such other participating employer and may

continue to serve as an elected local official, except that such local official

shall not receive any retirement benefit for any month for which such

local official serves in such office when compensation is paid in an amount

equal to $15,000 or more in any one such calendar year. The participating

employer shall report to the system within 30 days of when the compen-

sation paid to the retirant is equal to or exceeds any limitation provided

in this subsection. Upon request of the executive secretary director of the

system, the secretary of revenue shall provide such information as may

be needed by the executive secretary director to carry out the provisions

of this section.

(b) No such member who is an elected local official who retires as

provided in subsection (a) and who continues to serve as an elected local

official shall accrue any additional service credit for such service as an

elected local official or be entitled to any benefit provided in K.S.A. 74-

4916 or 74-4927, and amendments thereto.

(c) The provisions of this section are intended to further the public

policy of encouraging persons to serve in elective public office by per-

mitting a member of the system, who is a member through employment

with a participating employer in a nonelected position and who holds an

elected office as an elected local official of a municipality and who is also

a member of the system for such elected office, to retire under the system

from such nonelected employment and to continue serving in such

elected public office.

(d) The words and phrases used in this section have the meanings

respectively ascribed thereto by K.S.A. 74-4902, and amendments

thereto, unless a different meaning is plainly required by the context.

Sec. 14. K.S.A. 2000 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 director of the board within

60 days after the date of the accident causing such death and an appli-

cation for such benefit, in such form and manner as the board shall pre-

scribe, is filed in the office of the executive secretary director 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 em-

ployer 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 de-

pendent 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 discretion 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 subsec-

tion (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 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.

(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 director 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 director of the board within two years of

the date of the accident; 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 to practice

a branch of the healing arts issued by the state board of healing arts

designated by the board and the medical physician or physicians or any

other practitioner holding a valid license to practice a branch of the heal-

ing arts issued by the state board of healing arts report in writing to the

board that the member is physically or mentally totally disabled for duty

in the employ of a participating employer and that such disability will

probably be permanent; and (E) the board finds that the member became

permanently and totally disabled on a date certain based on the evidence

furnished 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 K.S.A. 2000 Supp. 74-49,123 and amendments thereto.

Sec. 15. K.S.A. 2000 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 K.S.A. 2000 Supp. 74-49,123 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 (i) the monthly payment of the retirement

benefit otherwise payable under K.S.A. 74-4915 and amendments thereto

and (ii) 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 (i) the monthly payment of the retirement benefit other-

wise payable under K.S.A. 74-4915 and amendments thereto and (ii) 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 (i) the monthly payment of the retirement

benefit otherwise payable under K.S.A. 74-4915 and amendments thereto

and (ii) 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.

(G) Lump sum payment at retirement. (i) Pursuant to this option, the

member must specify a lump sum amount to be paid to the member

upon the member's retirement. The lump sum amount will be based on

the actuarial present value of the benefit as provided in K.S.A. 74-4915,

and amendments thereto. The lump sum amount designated by the mem-

ber must be in 10% increments and shall not exceed 1/2 of the actuarial

present value of the benefit provided in K.S.A. 74-4915, and amendments

thereto.

(ii) Pursuant to this option, the member must elect to have the re-

maining actuarial present value paid in a monthly amount under the pro-

visions of K.S.A. 74-4915, and amendments thereto, or subsections (3)(A)

through (3)(F) of this section.

(iii) The amount of any retirement benefit payable pursuant to this

subsection shall remain as provided in this subsection even in the event

that the designated joint annuitant pursuant to subsection (3)(A), (3)(B)

or (3)(C) predeceases the retirant. In the event that the designated joint

annuitant pursuant to subsection (3)(A), (3)(B) or (3)(C) 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.

(iv) The provisions of this subsection shall be effective on and after

July 1, 2001.

(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. 16. K.S.A. 2000 Supp. 74-4918a is hereby amended to read as

follows: 74-4918a. (a) If the member who is married at the time of re-

tirement selects or will receive a retirement benefit or annuity which

would provide to such member's spouse upon the member's death no

monthly payments or payment which is less than the payment that the

spouse would receive as a joint annuitant under the joint and 1/2 to joint

annuitant survivor option, as provided in K.S.A. 20-2610a, 74-4918, 74-

4964 or 74-4964a and amendments thereto, or selects the lump sum pay-

ment at retirement benefit option as provided in subsection (3)(G) of

K.S.A. 74-4918, and amendments thereto, at the time of such selection of

a retirement benefit or annuity the member shall submit a notarized state-

ment of the marital status of the member and, if the member is currently

married, a statement of the spouse's consent or objection to the member's

selected retirement benefit or annuity under the provisions of this section

signed by the spouse and notarized in such form and manner as provided

by the system.

(b) (i) If the spouse of the member does not consent to the member's

selection of a retirement benefit or annuity under the provisions of this

section before the date of actual retirement, the system shall:

(A) Notify the spouse that the spouse has 90 days to consent or have

the member change such member's selected retirement benefit or an-

nuity; and

(B) pay the retirement benefit or annuity at the amount as provided

by the joint and 1/2 to joint annuitant survivor option until the spouse

consents or for 90 days, whichever is less.

(ii) Upon consent of the spouse or at the end of 90 days, the retire-

ment benefit or annuity must be recalculated and paid as provided by the

terms of the member's original selected retirement benefit or annuity

retroactively to the date on which the retirement became effective.

(iii) The system is not liable for any damages resulting from false

designation of marital status by a member or retirant.

(c) For purposes of this section, ``retirement system'' or ``system''

means the Kansas public employees retirement system, the Kansas police

and firemen's retirement system and the retirement system for judges.

(d) The provisions of this section shall take effect on and after July

1, 1994.

Sec. 17. K.S.A. 2000 Supp. 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

compensation 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 director

for deposit in the Kansas public employees retirement fund. Such de-

ductions shall be credited to the members' individual accounts and in-

terest shall be added annually to such accounts.

(2) (a) Subject to the provisions of K.S.A. 2000 Supp. 74-49,123 and

amendments thereto, each participating employer, pursuant to the pro-

visions of section 414(h)(2) of the federal internal revenue code, shall

pick up and pay the contributions which would otherwise be payable by

members as prescribed in subsection (1) commencing with the third quar-

ter 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 director 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 commencing 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. 18. K.S.A. 2000 Supp. 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 K.S.A. 2000 Supp. 74-49,123 and amendments thereto, such

member may purchase 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. The provisions of this

subsection shall not apply to repurchase of previously forfeited service

credit as provided in subsection (b) of K.S.A. 74-4911b and amendments

thereto.

Sec. 19. K.S.A. 2000 Supp. 74-4920 is hereby amended to read as

follows: 74-4920. (1) (a) Upon the basis of each annual actuarial valuation

and appraisal as provided for in subsection (3)(a) of K.S.A. 74-4908 and

amendments thereto, the board shall certify, on or before July 15 of each

year, to the division of the budget in the case of the state and to the agent

for each other participating employer an actuarially determined estimate

of the rate of contribution which will be required, together with all ac-

cumulated contributions and other assets of the system, to be paid by

each such participating employer to pay all liabilities which shall exist or

accrue under the system, including amortization of the actuarial accrued

liability over a period of 40 years commencing on July 1, 1993, and the

actuarial accrued liability for members of the faculty and other persons

who are employed by the state board of regents or by educational insti-

tutions under its management assisted by the state board of regents in

the purchase of retirement annuities as provided in K.S.A. 74-4925 and

amendments thereto, as provided in this section. The actuarial accrued

liability for all participating employers other than the state board of re-

gents relating to members of the faculty and other persons described in

this section, shall be amortized by annual payments that increase 4% for

each year remaining in the amortization period. For all participating em-

ployers other than the state board of regents relating to members of the

faculty and other persons described in this section, the projected unit

credit actuarial cost method shall be used in annual actuarial valuations,

commencing with the 1993 valuation, to determine the employer contri-

bution rates that shall be certified by the board. The actuarial accrued

liability for members of the faculty and other persons described in this

subsection assisted by the state board of regents in the purchase of re-

tirement annuities as provided in K.S.A. 74-4925 and amendments

thereto shall be amortized by annual level payments over a period of 11

years commencing July 1, 1993. Such certified rate of contribution shall

be based on the standards set forth in subsection (3)(a) of K.S.A. 74-4908

and amendments thereto and shall not be based on any other purpose

outside of the needs of the system.

(b) (i) For employers affiliating on and after January 1, 1999, upon

the basis of an annual actuarial valuation and appraisal of the system

conducted in the manner provided for in K.S.A. 74-4908 and amend-

ments thereto, the board shall certify, on or before July 15 of each year

to each such employer an actuarially determined estimate of the rate of

contribution which shall be required to be paid by each such employer

to pay all of the liabilities which shall accrue under the system from and

after the entry date as determined by the board, upon recommendation

of the actuary. Such rate shall be termed the employer's participating

service contribution and shall be uniform for all participating employers.

Such additional liability shall be amortized over a period of 34 years com-

mencing on July 1, 1999, by annual payments that increase 4% for each

year remaining in the amortization period. For all participating employers

described in this section, the projected unit credit actuarial cost method

shall be used in annual actuarial valuations to determine the employer

contribution rates that shall be certified by the board.

(ii) The board shall determine for each such employer separately an

amount sufficient to amortize over a period of not to exceed 34 years

commencing July 1, l999, all liabilities for prior service costs which shall

have accrued at the time of entry into the system. On the basis of such

determination the board shall annually certify to each such employer sep-

arately an actuarially determined estimate of the rate of contribution

which shall be required to be paid by that employer to pay all of the

liabilities for such prior service costs. Such rate shall be termed the em-

ployer's prior service contribution.

(2) The division of the budget and the governor shall include in the

budget and in the budget request for appropriations for personal services

the sum required to satisfy the state's obligation under this act as certified

by the board and shall present the same to the legislature for allowance

and appropriation.

(3) Each other participating employer shall appropriate and pay to

the system a sum sufficient to satisfy the obligation under this act as

certified by the board.

(4) Each participating employer is hereby authorized to pay the em-

ployer's contribution from the same fund that the compensation for which

such contribution is made is paid from or from any other funds available

to it for such purpose. Each political subdivision, other than an instru-

mentality of the state, which is by law authorized to levy taxes for other

purposes, may levy annually at the time of its levy of taxes, a tax which

may be in addition to all other taxes authorized by law for the purpose of

making its contributions under this act and, in the case of cities and coun-

ties, to pay a portion of the principal and interest on bonds issued under

the authority of K.S.A. 12-1774 and amendments thereto by cities located

in the county, which tax, together with any other fund available, shall be

sufficient to enable it to make such contribution. In lieu of levying the

tax authorized in this subsection, any taxing subdivision may pay such

costs from any employee benefits contribution fund established pursuant

to K.S.A. 12-16,102 and amendments thereto. Each participating em-

ployer which is not by law authorized to levy taxes as described above,

but which prepares a budget for its expenses for the ensuing year and

presents the same to a governing body which is authorized by law to levy

taxes as described above, may include in its budget an amount sufficient

to make its contributions under this act which may be in addition to all

other taxes authorized by law. Such governing body to which the budget

is submitted for approval, may levy a tax sufficient to allow the partici-

pating employer to make its contributions under this act, which tax, to-

gether with any other fund available, shall be sufficient to enable the

participating employer to make the contributions required by this act.

(5) The rate of contribution certified to a participating employer as

provided in this section shall apply during the fiscal year of the partici-

pating employer which begins in the second calendar year following the

year of the actuarial valuation. For the fiscal year commencing in calendar

year 1993, the employer rate of contribution for the state of Kansas and

for participating employers under K.S.A. 74-4931 and amendments

thereto shall be 3.1% of the amount of compensation upon which mem-

bers contribute during the period. For the fiscal year commencing in

calendar year 1994, the employer rate of contribution for the state of

Kansas and for participating employers under K.S.A. 74-4931 and amend-

ments thereto shall be 3.2% of the amount of compensation upon which

members contribute during the period. For the fiscal year commencing

in calendar year 1994, the employer rate of contribution for participating

employers other than the state of Kansas shall be 2.2% of the amount of

compensation upon which members contribute during the period. Except

as specifically provided in this section, for the fiscal year commencing in

calendar year 1995, the rate of contribution certified to a participating

employer shall in no event exceed such participating employer's contri-

bution rate for the immediately preceding fiscal year by more than 0.1%

of the amount of compensation upon which members contribute during

the period. Except as specifically provided in this section, for fiscal years

commencing in calendar year 1996 and in each subsequent calendar year,

the rate of contribution certified to the state of Kansas shall in no event

exceed the state's contribution rate for the immediately preceding fiscal

year by more than 0.2% of the amount of compensation upon which

members contribute during the period. Except as specifically provided in

this section, for fiscal years commencing in calendar year 1997 and in

each subsequent calendar year, the rate of contribution certified to par-

ticipating employers other than the state of Kansas shall in no event ex-

ceed such participating employer's contribution rate for the immediately

preceding fiscal year by more than 0.15% of the amount of compensation

upon which members contribute during the period. There shall be an

employer rate of contribution certified to the state of Kansas and partic-

ipating employers under K.S.A. 74-4931 and amendments thereto. There

shall be a separate employer rate of contribution certified to all other

participating employers other than the state of Kansas.

(6) The actuarial cost of any legislation enacted in the 1994 session

of the Kansas legislature will be included in the June 30, 1994, actuarial

valuation in determining contribution rates for participating employers.

(7) The actuarial cost of the provisions of K.S.A. 1998 Supp. 74-4950i

will be included in the June 30, 1998, actuarial valuation in determining

contribution rates for participating employers. The actuarial accrued lia-

bility incurred for the provisions of K.S.A. 1998 2000 Supp. 74-4950i shall

be amortized over 15 years.

(8) Except as otherwise provided by law, the actuarial cost of any

legislation enacted by the Kansas legislature, except the actuarial cost of

K.S.A. 2000 Supp. 74-49,114a, and amendments thereto, shall be in ad-

dition to the employer contribution rates certified for the employer con-

tribution rate in the fiscal year immediately following such enactment.

(9) The board with the advice of the actuary may fix the contribution

rates for participating employers joining the system after one year from

the first entry date or for employers who exercise the option contained

in K.S.A. 74-4912 and amendments thereto at rates different from the

rate fixed for employers joining within one year of the first entry date.

(10) For employers affiliating on and after January 1, 1999, the rates

of contribution certified to the participating employer as provided in this

section shall apply during the fiscal year immediately following such cer-

tification, but the rate of contribution during the first year following the

employer's entry date shall be equal to 7% of the amount of compensation

on which members contribute during the year. Any amount of such first

year's contribution which may be in excess of the necessary current serv-

ice contribution shall be credited by the board to the respective em-

ployer's prior service liability.

(11) Employer contributions shall in no way be limited by any other

act which now or in the future establishes or limits the compensation of

any member.

(12) Notwithstanding any provision of law to the contrary, each par-

ticipating employer shall remit quarterly, or as the board may otherwise

provide, all employee deductions and required employer contributions to

the executive secretary director for credit to the Kansas public employees

retirement fund within three days after the end of the period covered by

the remittance by electronic funds transfer. Remittances of such deduc-

tions and contributions received after such date are delinquent. Delin-

quent payments due under this subsection shall be subject to interest at

the rate established for interest on judgments under subsection (a) of

K.S.A. 16-204 and amendments thereto. At the request of the board,

delinquent payments which are due or interest owed on such payments,

or both, may be deducted from any other moneys payable to such em-

ployer by any department or agency of the state.

Sec. 20. K.S.A. 2000 Supp. 74-4921 is hereby amended to read as

follows: 74-4921. (1) There is hereby created in the state treasury the

Kansas public employees retirement fund. All employee and employer

contributions shall be deposited in the state treasury to be credited to the

Kansas public employees retirement fund. The fund is a trust fund and

shall be used solely for the exclusive purpose of providing benefits to

members and member beneficiaries and defraying reasonable expenses

of administering the fund. Investment income of the fund shall be added

or credited to the fund as provided by law. All benefits payable under the

system, refund of contributions and overpayments, purchases or invest-

ments under the law and expenses in connection with the system unless

otherwise provided by law shall be paid from the fund. The director of

accounts and reports is authorized to draw warrants on the state treasurer

and against such fund upon the filing in the director's office of proper

vouchers executed by the chairperson or the executive secretary director

of the board. As an alternative, payments from the fund may be made by

credits to the accounts of recipients of payments in banks, savings and

loan associations and credit unions. A payment shall be so made only upon

the written authorization and direction of the recipient of payment and

upon receipt of such authorization such payments shall be made in ac-

cordance therewith. Orders for payment of such claims may be contained

on (a) a letter, memorandum, telegram, computer printout or similar

writing, or (b) any form of communication, other than voice, which is

registered upon magnetic tape, disc or any other medium designed to

capture and contain in durable form conventional signals used for the

electronic communication of messages.

(2) The board shall have the responsibility for the management of

the fund and shall discharge the board's duties with respect to the fund

solely in the interests of the members and beneficiaries of the system for

the exclusive purpose of providing benefits to members and such mem-

ber's beneficiaries and defraying reasonable expenses of administering

the fund and shall invest and reinvest moneys in the fund and acquire,

retain, manage, including the exercise of any voting rights and disposal of

investments of the fund within the limitations and according to the pow-

ers, duties and purposes as prescribed by this section.

(3) Moneys in the fund shall be invested and reinvested to achieve

the investment objective which is preservation of the fund to provide

benefits to members and member beneficiaries, as provided by law and

accordingly providing that the moneys are as productive as possible, sub-

ject to the standards set forth in this act. No moneys in the fund shall be

invested or reinvested if the sole or primary investment objective is for

economic development or social purposes or objectives.

(4) In investing and reinvesting moneys in the fund and in acquiring,

retaining, managing and disposing of investments of the fund, the board

shall exercise the judgment, care, skill, prudence and diligence under the

circumstances then prevailing, which persons of prudence, discretion and

intelligence acting in a like capacity and familiar with such matters would

use in the conduct of an enterprise of like character and with like aims

by diversifying the investments of the fund so as to minimize the risk of

large losses, unless under the circumstances it is clearly prudent not to

do so, and not in regard to speculation but in regard to the permanent

disposition of similar funds, considering the probable income as well as

the probable safety of their capital.

(5) Notwithstanding subsection (4): (a) Total investments in common

stock may be made in the amount of up to 60% of the total book value

of the fund;

(b) the board may invest or reinvest moneys of the fund in alternative

investments if the following conditions are satisfied:

(i) The total of such alternative investments does not exceed more

than 5% of the total investment assets of the fund. If the total of such

alternative investments exceeds more than 5% of the total investment

assets of the fund on the effective date of this act, the board shall not

invest or reinvest any moneys of the fund in alternative investments until

the total of such alternative investments is less the 5% of the total in-

vestment assets of the fund subject to the 5% limitation contained in this

subsection. Nothing in this subsection requires the board to liquidate or

sell the system's holdings in any alternative investment held by the system

on the effective date of this act, unless such liquidation or sale would be

in the best interest of the members and beneficiaries of the system and

be prudent under the standards contained in this section. The 5% limi-

tation contained in this section shall not have been violated if the total of

such alternative investments exceeds 5% of the total investment assets of

the fund as a result of market forces acting to increase the value of such

alternative investments relative to the rest of the system's investments;

however, the board shall not invest or reinvest any moneys of the fund

in alternative investments until the total of such alternative investments

is less than 5% of the total investment assets of the fund subject to the

5% limitation contained in this subsection;

(ii) if in addition to the system, there are at least two other sophisti-

cated investors, as defined by section 301 of the securities and exchange

act of 1933;

(iii) the system's share in any individual alternative investment is lim-

ited to an investment representing not more than 20% of any such indi-

vidual alternative investment;

(iv) the system has received a favorable and appropriate recommen-

dation from a qualified, independent expert in investment management

or analysis in that particular type of alternative investment;

(v) the alternative investment is consistent with the system's invest-

ment policies and objectives as provided in subsection (6);

(vi) the individual alternative investment does not exceed more than

2.5% of the total alternative investments made under this subsection. If

the alternative investment is made pursuant to participation by the system

in a multi-investor pool, the 2.5% limitation contained in this subsection

is applied to the underlying individual assets of such pool and not to

investment in the pool itself. The total of such alternative investments

made pursuant to participation by the system in any one individual multi-

investor pool shall not exceed more than 20% of the total of alternative

investments made by the system pursuant to this subsection. Nothing in

this subsection requires the board to liquidate or sell the system's holdings

in any alternative investments made pursuant to participation by the sys-

tem in any one individual multi-investor pool held by the system on the

effective date of this act, unless such liquidation or sale would be in the

best interest of the members and beneficiaries of the system and be pru-

dent under the standards contained in this section. The 20% limitation

contained in this subsection shall not have been violated if the total of

such investment in any one individual multi-investor pool exceeds 20%

of the total alternative investments of the fund as a result of market forces

acting to increase the value of such a multi-investor pool relative to the

rest of the system's alternative investments; however, the board shall not

invest or reinvest any moneys of the fund in any such individual multi-

investor pool until the value of such individual multi-investor pool is less

than 20% of the total alternative investments of the fund;

(vii) the board has received and considered the investment manager's

due diligence findings submitted to the board as required by subsection

(6)(c); and

(viii) prior to the time the alternative investment is made, the system

has in place procedures and systems to ensure that the investment is

properly monitored and investment performance is accurately measured.

For purposes of this act, ``alternative investment'' means nontraditional

investments outside the established nationally recognized public stock

exchanges and government securities market. Alternative investments

shall include, but not be limited to, private placements, venture capital,

partnerships, limited partnerships and leveraged buyout partnerships;

(c) except as otherwise provided, the board may invest or reinvest

moneys of the fund in real estate investments if the following conditions

are satisfied:

(i) The system has received a favorable and appropriate recommen-

dation from a qualified, independent expert in investment management

or analysis in that particular type of real estate investment;

(ii) the real estate investment is consistent with the system's invest-

ment policies and objectives as provided in subsection (6); and

(iii) the board has received and considered the investment manager's

due diligence findings submitted to the board as required by subsection

(6)(c); and

(d) the board shall not invest or reinvest moneys of the fund in any

banking institution, savings and loan association or credit union which

positions the system as a shareholder or owner of such banking institution,

savings and loan association or credit union.

(6) Subject to the objective set forth in subsection (3) and the stan-

dards set forth in subsections (4) and (5) the board shall formulate policies

and objectives for the investment and reinvestment of moneys in the fund

and the acquisition, retention, management and disposition of invest-

ments of the fund. Such policies and objectives shall include:

(a) Specific asset allocation standards and objectives;

(b) establishment of criteria for evaluating the risk versus the poten-

tial return on a particular investment;

(c) a requirement that all investment managers submit such man-

ager's due diligence findings on each investment to the board or invest-

ment advisory committee for approval or rejection prior to making any

alternative investment;

(d) a requirement that all investment managers shall immediately re-

port all instances of default on investments to the board and provide the

board with recommendations and options, including, but not limited to,

curing the default or withdrawal from the investment; and

(e) establishment of criteria that would be used as a guideline for

determining when no additional add-on investments or reinvestments

would be made and when the investment would be liquidated.

The board shall review such policies and objectives, make changes con-

sidered necessary or desirable and readopt such policies and objectives

on an annual basis.

(7) The board may enter into contracts with one or more persons

whom the board determines to be qualified, whereby the persons under-

take to perform the functions specified in subsection (2) to the extent

provided in the contract. Performance of functions under contract so

entered into shall be paid pursuant to rates fixed by the board subject to

provisions of appropriation acts and shall be based on specific contractual

fee arrangements. The system shall not pay or reimburse any expenses of

persons contracted with pursuant to this subsection, except that after

approval of the board, the system may pay approved investment related

expenses subject to provisions of appropriation acts. The board shall re-

quire that a person contracted with to obtain commercial insurance which

provides for errors and omissions coverage for such person in an amount

to be specified by the board, provided that such coverage shall be at least

the greater of $500,000 or 1% of the funds entrusted to such person up

to a maximum of $10,000,000. The board shall require a person con-

tracted with to give a fidelity bond in a penal sum as may be fixed by law

or, if not so fixed, as may be fixed by the board, with corporate surety

authorized to do business in this state. Such persons contracted with the

board pursuant to this subsection and any persons contracted with such

persons to perform the functions specified in subsection (2) shall be

deemed to be agents of the board and the system in the performance of

contractual obligations.

(8) (a) In the acquisition or disposition of securities, the board may

rely on the written legal opinion of a reputable bond attorney or attorneys,

the written opinion of the attorney of the investment counselor or man-

agers, or the written opinion of the attorney general certifying the legality

of the securities.

(b) The board shall employ or retain qualified investment counsel or

counselors or may negotiate with a trust company to assist and advise in

the judicious investment of funds as herein provided.

(9) (a) Except as provided in subsection (7) and this subsection, the

custody of money and securities of the fund shall remain in the custody

of the state treasurer, except that the board may arrange for the custody

of such money and securities as it considers advisable with one or more

member banks or trust companies of the federal reserve system or with

one or more banks in the state of Kansas, or both, to be held in safe-

keeping by the banks or trust companies for the collection of the principal

and interest or other income or of the proceeds of sale. The services

provided by the banks or trust companies shall be paid pursuant to rates

fixed by the board subject to provisions of appropriation acts.

(b) The state treasurer and the board shall collect the principal and

interest or other income of investments or the proceeds of sale of secu-

rities in the custody of the state treasurer and pay same when so collected

into the fund.

(c) The principal and interest or other income or the proceeds of sale

of securities as provided in clause (a) of this subsection (9) shall be re-

ported to the state treasurer and the board and credited to the fund.

(10) The board shall with the advice of the director of accounts and

reports establish the requirements and procedure for reporting any and

all activity relating to investment functions provided for in this act in order

to prepare a record monthly of the investment income and changes made

during the preceding month. The record will reflect a detailed summary

of investment, reinvestment, purchase, sale and exchange transactions

and such other information as the board may consider advisable to reflect

a true accounting of the investment activity of the fund.

(11) The board shall provide for an examination of the investment

program annually. The examination shall include an evaluation of current

investment policies and practices and of specific investments of the fund

in relation to the objective set forth in subsection (3), the standard set

forth in subsection (4) and other criteria as may be appropriate, and rec-

ommendations relating to the fund investment policies and practices and

to specific investments of the fund as are considered necessary or desir-

able. The board shall include in its annual report to the governor as pro-

vided in K.S.A. 74-4907, and amendments thereto, a report or a summary

thereof covering the investments of the fund.

(12) (a) An annual financial-compliance audit of the system, includ-

ing any performance audit subjects which are directed to be included in

such annual audit by the legislative post audit committee, performance

audits of the system as prescribed under the Kansas governmental op-

erations law, and such other audits as are directed by the legislative post

audit committee under the Kansas legislative post audit act shall be con-

ducted. The annual financial-compliance audit shall include, but not be

limited to, a review of alternative investments of the system with any

estimates of permanent impairments to the value of such alternative in-

vestments reported by the system pursuant to K.S.A. 74-4907, and

amendments thereto.

(b) In accordance with this subsection (12), the annual financial-com-

pliance audit may include one or more performance audit subjects as

directed by the legislative post audit committee. In considering perform-

ance audit subjects to be included in any financial-compliance audit con-

ducted pursuant to this subsection (12), the legislative post audit com-

mittee shall consider recommendations and requests for performance

audits, relating to the system or the management thereof, by the joint

committee on pensions, investments and benefits or by any other com-

mittee or individual member of the legislature. Commencing with the

financial-compliance audit for the fiscal year ending June 30, 1998, the

legislative post audit committee shall specify if one or more performance

audit subjects shall be included in the financial-compliance audit con-

ducted pursuant to this subsection (12), in addition to such other subjects

as may be directed to be included in the financial-compliance audit by

the legislative post audit committee. Except as otherwise determined by

the legislative post audit committee pursuant to this subsection (12), com-

mencing with the financial-compliance audit for the fiscal year ending

June 30, 1998, one or more performance audit subjects specified by the

legislative post audit committee shall be included at least once every two

fiscal years in a financial-compliance audit conducted pursuant to this

subsection (12). The legislative post audit committee may direct that one

or more performance audit subjects are to be included in a financial-

compliance audit conducted pursuant to this subsection (12) not more

than once during a specific period of three fiscal years, in lieu of once

every two fiscal years.

(c) The auditor to conduct the financial-compliance audit required

pursuant to this subsection (12) shall be specified in accordance with

K.S.A. 46-1122, and amendments thereto. If the legislative post audit

committee specifies under such statute that a firm, as defined by K.S.A.

46-1112, and amendments thereto, is to perform all or part of the audit

work of such audit, such firm shall be selected and shall perform such

audit work as provided in K.S.A. 46-1123, and amendments thereto, and

K.S.A. 46-1125 through 46-1127, and amendments thereto. The audits

required pursuant to this subsection (12) shall be conducted in accord-

ance with generally accepted governmental auditing standards. The fi-

nancial-compliance audit required pursuant to this subsection (12) shall

be conducted as soon after the close of the fiscal year as practicable, but

shall be completed no later than six months after the close of the fiscal

year. The post auditor shall annually compute the reasonably anticipated

cost of providing the financial-compliance audit pursuant to this subsec-

tion (12), subject to review and approval by the contract audit committee

established by K.S.A. 46-1120, and amendments thereto. Upon such ap-

proval, the system shall reimburse the division of post audit for the

amount approved by the contract audit committee. The furnishing of the

financial-compliance audit pursuant to this subsection (12) shall be a

transaction between the legislative post auditor and the system and shall

be settled in accordance with the provisions of K.S.A. 75-5516, and

amendments thereto.

(d) Any internal assessment or examination of alternative investments

of the system performed by any person or entity employed or retained

by the board which evaluates or monitors the performance of alternative

investments shall be reported to the legislative post auditor so that such

report may be reviewed in accordance with the annual financial-compli-

ance audits conducted pursuant to this subsection (12).

Sec. 21. K.S.A. 2000 Supp. 74-4922 is hereby amended to read as

follows: 74-4922. The executive secretary director shall maintain such

records as are necessary to determine the following reserves.

(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.

Sec. 22. K.S.A. 2000 Supp. 74-4925 is hereby amended to read as

follows: 74-4925. (1) The state board of regents shall:

(a) Assist all those members of the faculty and other persons who are

employed by the state board of regents or by educational institutions

under its management and who are in the unclassified service under the

Kansas civil service act as provided in subsection (1)(f) of K.S.A. 75-2935

and amendments thereto, except health care employees, as defined by

subsection (1)(f) of K.S.A. 75-2935 and amendments thereto, in the pur-

chase of retirement annuities for their service rendered after December

31, 1961. Effective on the first day of the first payroll period commencing

with or following July 1, 1994, county extension agents employed by Kan-

sas state university under K.S.A. 2-615 and amendments thereto shall be

eligible for assistance by the state board of regents in the purchase of

retirement annuities under this section. The state board of regents shall

not assist any such person who is employed after December 31, 1961,

until such person has been employed for a waiting period of at least one

year except that (i) the state board of regents may assist any newly em-

ployed person immediately if at the time of the commencement of em-

ployment the person is covered by a valid retirement annuity contract

issued by a company described in subsection (2) which was entered into

pursuant to a retirement pension plan adopted for faculty members or

other persons, or both, employed by an institution of higher education

and to which such person or such person's employer on such person's

behalf has been making contributions for at least one year, and (ii) all

periods of employment with (A) participating employers under the Kansas

public employees retirement system, for which employment participating

service credit accrued, or (B) institutions of higher education in other

states for which employment retirement benefits accrued under a retire-

ment system or plan provided for such employment, shall be credited

toward satisfaction of such one-year waiting period if served, in either

case, during the five years immediately preceding employment with the

state board of regents or with an educational institution under its man-

agement in the unclassified service under the Kansas civil service act as

provided in subsection (1)(f) of K.S.A. 75-2935 and amendments thereto,

in addition to such employment with the state board of regents or with

an educational institution under its management; no period of employ-

ment as a student employee, as a seasonal or temporary employee or as

a part-time employee, whose employment requires less than 1,000 hours

of work per year, shall be credited toward the one-year waiting period

under subsection (1)(a); this act shall not apply to persons employed in

such temporary and part-time positions designated by the state board of

regents as exceptions hereto;

(b) require such members of the faculty and others described in sub-

section (1)(a) who are so assisted by the state board of regents to con-

tribute an amount toward the purchase of such retirement annuities of

5.5% of their salaries, such contributions to be made through payroll

deductions and on a pretax basis;

(c) contribute an amount toward the purchase of such retirement

annuities equal to the percentage amount, as prescribed by K.S.A. 74-

4925e and amendments thereto, of the total amount of the salaries on

which such members of the faculty and others described in subsection

(1)(a) contribute during such period for which the contribution of the

state board of regents is made;

(d) provide, under such rules and regulations as the state board of

regents may adopt, for the retirement of any such member of the faculty

or other person described in subsection (1)(a) on account of age or con-

dition of health, retirement of such member of the faculty or other person

described in subsection (1)(a) on account of age to be not earlier than the

55th birthday and prior to January 1, 1994, not later than the end of the

academic year following the 70th year. On and after January 1, 1994, there

shall be no mandatory retirement on account of age. Any person who

retires under this section and who receives benefits from the Kansas pub-

lic employees retirement system for prior service credit shall have such

benefits calculated in accordance with the applicable provisions of K.S.A.

74-4914 and 74-4915 and amendments thereto.

(2) For the purposes of this section the state board of regents may

contract with:

(a) Any life insurance company authorized to do business in this state;

or

(b) any life insurance company organized and operated without profit

to any private shareholder or individual exclusively for the purpose of

aiding and strengthening educational institutions by issuing insurance and

annuity contracts only to or for the benefit of such institution and indi-

viduals engaged in the services of such institutions, whether or not such

company is authorized to do business in Kansas. No premium tax or in-

come tax shall be due or payable on such annuity contract or contracts

for such retirement programs issued by a company described in this sub-

section (2)(b), except that neither the purchase nor the issuance of such

retirement annuities from or by a company described in this subsection

(2)(b) shall constitute the effecting of a contract of insurance.

(3) (a) Such member of the faculty or other person described in sub-

section (1)(a) shall also be a member of the Kansas public employees

retirement system, but only for the purpose of granting retirement ben-

efits based on prior service only which was rendered prior to January 1,

1962, which shall be credited to the member as provided in subsection

(1) of K.S.A. 74-4913 and amendments thereto, except that such member

of the faculty or other person described in subsection (1)(a) who was

employed prior to July 1, 1962, who has not yet retired and who is em-

ployed on July 1, 1988, on an academic year contract, shall receive credit

for 12 months of prior service for each nine months of prior service for

which such member or person was employed on an academic year con-

tract prior to July 1, 1962. For the purpose of determining eligibility for

a vested benefit, service by such a member of the faculty or other person

after December 31, 1961, shall be construed to be credited service under

subsection (2) of K.S.A. 74-4917 and amendments thereto.

(b) Any member of the faculty or other person described in subsec-

tion (1)(a) who retires after 10 years of continuous service immediately

preceding retirement shall be granted a retirement benefit based on prior

service only which was rendered prior to January 1, 1962. Application for

such benefit shall be in such form and manner as the board shall pre-

scribe.

(4) For the purpose of establishing a procedure whereby the state

board of regents and any member of the faculty or other person described

in subsection (1)(a), subject to rules and regulations of the state board of

regents, may take advantage of section 403(a) or (b) of the federal internal

revenue code of 1986 or any other section of the federal internal revenue

code of 1986 which defers or excludes amounts from inclusion in income,

any member of the faculty or any other person described in subsection

(1)(a), whether or not such person has satisfied the one-year waiting pe-

riod requirement under subsection (1)(a), may request in writing that the

state board of regents reduce such person's annual salary, as fixed by the

board, in an amount equal to not less than 5% nor more than the per-

centage allowed under section 403(b) of the federal internal revenue code

of 1986, as designated by such member of the faculty or other person

described in subsection (1)(a), of the gross amount of such annual salary.

In the event of such request by a faculty member or other person who is

required to make the contribution as provided in subsection (1)(b), such

person shall not be required to make such contribution and the state

board of regents shall provide a sum equal to the percentage amount, as

prescribed by K.S.A. 74-4925e and amendments thereto, of the gross

annual salary of the member of the faculty or other person and shall

purchase for and on behalf of each such person whose salary has been so

reduced a retirement annuity contract or contracts, the annual premiums

for which shall be equal to the sum of the amount of the salary reduction

of the member of the faculty or other person and the amount paid by the

state board of regents. In the event of such request by a faculty member

or other person who is serving the one-year waiting period pursuant to

subsection (1)(a) who is not required to make the contribution as provided

in subsection (1)(b), the state board of regents shall purchase for and on

behalf of each such person whose salary has been so reduced a retirement

annuity contract or contracts, the annual premiums for which shall be

equal to the sum of the amount of the salary reduction of the member

of the faculty or other person, but the state board of regents shall not

provide the sum equal to the percentage amount, as prescribed by K.S.A.

74-4925e and amendments thereto, of the gross annual salary of such

person as provided for such person who is required to make the contri-

bution as provided in subsection (1)(b). Such retirement annuity contracts

may be purchased by the state board of regents from companies described

in subsection (2)(a) and subsection (2)(b) or from noninsurance compa-

nies who offer retirement plans that meet the requirements of section

403(b) of the federal internal revenue code of 1986, except that the state

board of regents may require that the first 5% of the gross amount of

such person's annual salary which is reduced under this subsection (4)

and the amount equal to the percentage amount, as prescribed by K.S.A.

74-4925e and amendments thereto, of the gross amount of such person's

annual salary which is provided by the state board of regents for the

purchase of retirement annuity contracts under this subsection (4), if

required to be provided under this subsection (4), shall be used to pur-

chase such retirement annuity contracts from such company or companies

as may be designated by the state board of regents for such purposes.

The director of accounts and reports is authorized to draw warrants on

the state treasurer upon the filing with the director of proper vouchers

for the amount of the premium on the retirement annuity contract to be

paid pursuant to the terms of such contracts and this act.

(5) All employees who are described in subsection (1)(a) and who

commence such employment on and after July 1, 1976, shall receive as-

sistance under subsection (1) and shall be covered by a valid retirement

annuity contract issued by a company described in subsection (2).

(6) Any employee of the state board of regents or of an educational

institution under its management, 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 this section and who becomes

ineligible for such assistance because such employee's position is reclas-

sified to a position in the classified service under the Kansas civil service

act or who becomes ineligible for such assistance because such employee

transfers to a position in the classified service under the Kansas civil serv-

ice act with the state board of regents or an educational institution under

its management, shall become a member of the Kansas public employees

retirement system in accordance with the provisions of subsection (5) of

K.S.A. 74-4911 and amendments thereto, unless such employee files a

written election in the office of the Kansas public employees retirement

system, in the form and manner prescribed by the board of trustees

thereof, to remain eligible for assistance by the state board of regents

under this section 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 eligible for assistance by the state board of regents under this

section and to become a member of the Kansas public employees retire-

ment system under subsection (5) of K.S.A. 74-4911 and amendments

thereto. Such election, whether to remain eligible for such assistance or

to become a member of such system, shall be effective as of the effective

date of such reclassification or transfer and shall be irrevocable.

(7) The state board of regents shall adopt uniform policies applicable

to members of the faculty and other persons, who are employed by the

state board of regents or by any educational institution under its man-

agement and who are in the unclassified service under the Kansas civil

service act as provided in subsection (1)(f) of K.S.A. 75-2935 and amend-

ments thereto, except health care employees, as defined by subsection

(1)(f) of K.S.A. 75-2935 and amendments thereto, for the purposes of

administering the provisions of this section and the provision of retire-

ment annuities and other benefits hereunder. All assistance provided by

the state board of regents for such persons, and agreements entered into

therefor, pursuant to this section prior to the effective date are hereby

authorized, confirmed and validated.

(8) Any employee described in subsection (1)(a) who is on leave of

absence and who accepts a position in the executive branch of govern-

ment may file a written election in the office of the Kansas public em-

ployees retirement system, in the form and manner prescribed by the

board, to remain eligible for assistance by the state board of regents under

this section prior to the first day of the first complete payroll period

occurring after the commencement of such service in the executive

branch of government. Failure to file such written election shall be pre-

sumed to be an election not to remain eligible for assistance by the state

board of regents. The state board of regents shall contribute an amount

toward the purchase of retirement annuities on behalf of such employee

equal to the sum of the amounts provided in subsection (1)(c).

(9) Any employee described in subsection (1)(a) who is on leave of

absence and who is elected or appointed as a member of the legislature

may file a written election in the office of the Kansas public employees

retirement system, in the form and manner prescribed by the board, to

remain eligible for assistance by the state board of regents under this

section prior to the first day of the first complete payroll period occurring

after the commencement of such service in the legislature or for any em-

ployee who is a member of the legislature on January 8, 2001, prior to

the first day of the first complete payroll period occurring after July 1,

2001. Failure to file such written election shall be presumed to be an

election not to remain eligible for assistance by the state board of regents.

For any employee who files an election as provided in this subsection and

who was a member of the legislature on January 8, 2001, such election

shall be effective on January 8, 2001. The state board of regents shall

contribute an amount toward the purchase of retirement annuities on

behalf of such employee equal to the percentage amount, as prescribed by

K.S.A. 74-4925e, and amendments thereto, on the biweekly rate of the

salary of such employee with the state board of regents in effect on the

date preceding such leave of absence and continuing throughout such

leave of absence. Any such employee who makes an election as provided

by this subsection shall be eligible for the insured death benefit and in-

sured disability benefit in the same manner as provided under the pro-

visions of K.S.A. 74-4927a, and amendments thereto. The provisions of

this section are intended to further the public policy of encouraging per-

sons to serve in elective office.

Sec. 23. K.S.A. 2000 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. The

member must make an initial application for social security disability ben-

efits and, if denied such benefits, the member must pursue and exhaust

all administrative remedies of the social security administration which

include, but are not limited to, reconsideration and hearings. 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 compensation

benefits may be deducted from the amount of long-term disability benefit

payments under such plan. During the period in which such member is

pursuing such administrative remedies prior to a final decision of the

social security administration, social security disability benefits may be

estimated and may be deducted from the amount of long-term disability

benefit payments under such plan. Such long-term 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 em-

ployer. 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

long-term 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 notwith-

standing 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

long-term disability benefit as described in this section shall not be eli-

gible 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, but before July 1, 1998. Effective July 1, 1998, such member's final

average salary shall be adjusted upon retirement by an amount equal to

the lesser of: (i) The percentage increase in the consumer price index for

all urban consumers as published by the bureau of labor statistics of the

United States department of labor minus 1%; or (ii) four percent per

annum, measured from the member's last day on the payroll to the month

that is two months prior to the month of retirement, for each year of

disability after July 1, 1998.

(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, but before July 1, 1998.

Effective July 1, 1998, such member's current annual rate shall be ad-

justed upon death by an amount equal to the lesser of: (i) The percentage

increase in the consumer price index for all urban consumers published

by the bureau of labor statistics of the United States department of labor

minus 1%; or (ii) four percent per annum, measured from the member's

last day on the payroll to the month that is two months prior to the month

of death, for each year of disability after July 1, 1998.

(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

long-term 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 long-term 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 estab-

lished 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 in-

surance reserve fund. Investment income of the fund shall be added or

credited to the fund as provided by law. The cost of the plan of death

and long-term disability benefits shall be paid from the group insurance

reserve fund, which shall be administered by the board. Except as oth-

erwise provided by this subsection, each participating employer shall ap-

propriate and pay to the system in such manner as the board shall pre-

scribe in addition to the employee and employer retirement contributions

an amount equal to .6% of the amount of compensation on which the

members' contributions to the Kansas public employees retirement sys-

tem are based for deposit in the group insurance reserve fund. Notwith-

standing the provisions of this subsection, no participating employer shall

appropriate and pay to the system any amount provided for by this sub-

section for deposit in the group insurance reserve fund for the period

commencing on April 1, 2000, and ending on June 30, 2001 December

31, 2001.

(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 long-term 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 the optional

death benefit plan reserve fund, from which 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. 24. K.S.A. 2000 Supp. 74-4927f is hereby amended to read as

follows: 74-4927f. (a) For the purposes of providing the ``insured death

benefit'' as prescribed in K.S.A. 74-4927 and amendments thereto, to all

persons who are members of the retirement system for judges, the term

``member'' as used in K.S.A. 74-4927 and amendments thereto, and as

used in this section shall include members of the retirement system for

judges.

(b) Except as otherwise provided by this subsection, the employer of

any member who is a member of the retirement system for judges shall

pay to the Kansas public employees retirement system in such manner as

the board of trustees shall prescribe, an amount equal to .4% of the

amount of compensation on which the member's contributions to the

retirement system for judges are based for deposit in the group insurance

reserve of the Kansas public employees retirement fund, in lieu of the

amount required to be paid under subsection (4) of K.S.A. 74-4927 and

amendments thereto. Notwithstanding the provisions of this subsection,

no employer shall pay to the system any amount provided for by this

subsection for deposit in the group insurance reserve fund for the fiscal

year ending June 30, 2001 period commencing on April l, 2000, and end-

ing on December 31, 2001.

Sec. 25. K.S.A. 2000 Supp. 74-4927h is hereby amended to read as

follows: 74-4927h. (1) The provisions of this section shall apply to em-

ployees of the state board of regents and institutions under its manage-

ment 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 director 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 director 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 in-

dependent 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 ac-

cidental death benefit payments shall be paid to the surviving spouse of

such deceased member, such payments to continue so long as such sur-

viving spouse lives or until such surviving spouse remarries. If there is no

surviving 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 K.S.A. 2000 Supp. 74-49,123 and amendments thereto.

Sec. 26. K.S.A. 2000 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 director'' 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;

(8) ``school employment'' means the employment of a member when

employed by an eligible employer as specified in any of subsections sub-

section (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. 27. K.S.A. 74-4934 is hereby amended to read as follows: 74-

4934. (1) On and after July 1, 1970, the state school retirement board is

abolished and such board shall have no further legal authority or powers.

On such date all of the powers provided in K.S.A. 72-5501 to 72-5534

and amendments thereto shall devolve upon and be performed by the

board of trustees of the Kansas public employees retirement system, and

all powers heretofore exercised by the state school retirement board, in-

cluding management and control of the assets and funds of the state

school retirement system, shall be and become vested in the board of

trustees of the Kansas public employees retirement system. Whenever in

the statutes of this state the words ``state school retirement board'' or

words of like effect are used, the same shall be deemed to mean the

board of trustees of the Kansas public employees retirement system. The

board of trustees of the Kansas public employees retirement system is

authorized to execute transfer endorsements for any stock or security of

the state school retirement system and such endorsements may be in the

name of the state school retirement board.

(2) On January 1, 1971, there shall be transferred from the school

employees savings fund of the state school retirement system such mon-

eys and securities, and accumulated earnings thereon, as are equal to the

accumulated contributions (savings annuity deductions or accumulated

deductions) of the members of the state school retirement system on

deposit with the state school retirement system who become members of

this system on January 1, 1971, as provided in K.S.A. 74-4935. Such trans-

fer of securities in the school employees savings fund shall be on the basis

of the book value of such securities. The member's account in this system

shall be credited with the amount in his savings annuity account (savings

annuity deductions or accumulated deductions) so transferred.

(3) ``Executive secretary director'' as used in K.S.A. 72-5501 to 72-

5534, inclusive, and amendments thereto means the same as is provided

in subsection (5) of K.S.A. 74-4932. The duties provided in such statutes

to be performed by the executive secretary director shall be performed

by the person holding the office defined in subsection (5) of K.S.A. 74-

4932. Employees of the state school retirement board shall continue in

state service and retain all their rights under the Kansas civil service act.

Sec. 28. K.S.A. 2000 Supp. 74-4940 is hereby amended to read as

follows: 74-4940. (a) Subject to the provisions of subsection (b), all mem-

bers in school employment who are subject to the continuing contract

law shall be paid their contractual compensation in not less than 12 sub-

stantially equal installments, paid once, or more often, each month com-

mencing in September of each school year.

(b) Upon written authorization from any member in school employ-

ment who is subject to the continuing contract law, an employer shall pay

the balance of such member's contractual compensation for the school

year in one payment upon completion of all contractual obligations of the

member. The authorization shall be filed with the employer not later than

April 1 of the school year in and for which the balance payment is first

authorized. A written authorization under this subsection shall remain in

effect until revoked in writing by the member filing the authorization. So

long as the authorization of such member remains in effect, the balance

of the member's contractual compensation shall be paid each school year

in accordance with the provisions of this subsection. Such payment shall

be made no later than June 30 of the school year. For the purposes of

the Kansas public employees retirement system, the employer shall make

the appropriate employee contribution deduction from the payment and

shall report and remit the amount so deducted to the executive secretary

director at the time monthly deductions and quarterly reports would nor-

mally be made under K.S.A. 74-4919, and amendments thereto, if the

authorization for one payment was not in effect.

(c) Notwithstanding the provisions of subsections (a) and (b), each

member in school employment who is subject to the continuing contract

law, who has completed the balance of such member's contractual obli-

gations and retires prior to the end of a school year under K.S.A. 74-4937,

and amendments thereto, shall be paid the balance of the member's con-

tractual compensation in one payment during the calendar month im-

mediately preceding the date of retirement. For the purposes of the Kan-

sas public employees retirement system, the employer shall make the

appropriate employee contribution deduction from the payment and shall

report and remit the amount so deducted to the executive secretary di-

rector at the time monthly deductions and reports are made under K.S.A.

74-4919, and amendments thereto, for the period in which the payment

is made except that such report and remittance shall not include any

amount which would have been reported normally in the next ensuing

period under subsection (b). No employee contribution deduction shall

be made from such amount and such amount shall not be included as

compensation in determining the member's final average salary.

(d) An employer of members in school employment who are not sub-

ject to the continuing contract law may adopt a policy providing that any

or all such members shall be paid their contractual compensation each

school year in not less than 12 substantially equal installments, paid once,

or more often, each month commencing in the first month of any such

member's school employment. A copy of any such policy shall be provided

to each such member in school employment.

(e) As used in this section, the term ``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.

Sec. 29. K.S.A. 2000 Supp. 74-4957 is hereby amended to read as

follows: 74-4957. (1) The normal retirement date for a member of the

system who is appointed or employed prior to July 1, 1989, and who does

not make an election pursuant to K.S.A. 74-4955a and amendments

thereto shall be the first day of the month coinciding with or following

termination of employment not followed by employment with any partic-

ipating employer within 30 days and the attainment of age 55 and the

completion of 20 years of credited service. Any member may retire on

such member's normal retirement date or on the first day of any month

thereafter.

(2) Early retirement. Any member who is appointed or employed

prior to July 1, 1989, and who does not make an election pursuant to

K.S.A. 74-4955a and amendments thereto may retire before such mem-

ber's normal retirement date on the first day of any month coinciding

with or following termination of employment not followed by employ-

ment with any participating employer within 30 days and the attainment

of age 50 and the completion of 20 years of credited service.

(3) Notwithstanding the provisions of subsections (1) and (2) of this

section and K.S.A. 74-4955a, 74-4957a, 74-4958a, 74-4960a, 74-4963a and

74-4964a and amendments thereto, the normal retirement date for any

member who was, up to the entry date of such member's employer, cov-

ered by a pension system under the provisions of K.S.A. 13-14a01 to 13-

14a14, inclusive, or 14-10a01 to 14-10a15, inclusive, and amendments

thereto, shall be the first day of the month coinciding with or following

the attainment of age 50 and the completion of 25 years of credited serv-

ice.

(4) In no event shall a member be eligible to retire until such member

has been a contributing member of the system for 12 months of partici-

pating service, and shall have given such member's employer prior notice

of retirement.

(5) If a retirant who retired on or after July 1, 1994, is employed,

elected or appointed in or to any position or office for which compensa-

tion for service is paid in an amount equal to $15,000 or more in any one

such calendar year, by the same state agency or the same police or fire

department of any county, city, township or special district or the same

sheriff's office of a county during the final two years of such retirant's

participation, such retirant shall not receive any retirement benefit for

any month for which such retirant serves in such position or office. The

participating employer shall report to the system within 30 days of when

the compensation paid to the retirant is equal to or exceeds any limitation

provided by this section. Any retirant employed by a participating em-

ployer in the Kansas police and firemen's retirement system shall not

make contributions nor receive additional credit under such system for

such service except as provided by this section. Upon request of the ex-

ecutive secretary director of the system, the secretary of revenue shall

provide such information as may be needed by the executive secretary

director to carry out the provisions of this act.

Sec. 30. K.S.A. 2000 Supp. 74-4957a is hereby amended to read as

follows: 74-4957a. (1) The normal retirement date for a member of the

system 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 provisions of this act shall be the first day of the

month coinciding with or following termination of employment not fol-

lowed by employment with any participating employer within 30 days and

the attainment of age 55 and the completion of 20 years of credited serv-

ice, age 50 and the completion of 25 years of credited service or age 60

with the completion of 15 years of credited service. Any such member

may retire on such member's normal retirement date or on the first day

of any month thereafter.

(2) Any member may retire before such member's normal retirement

date on the first day of any month coinciding with or following termination

of employment not followed by employment with any participating em-

ployer within 30 days and the attainment of age 50 and the completion

of 20 years of credited service.

(3) In no event shall a member be eligible to retire until such member

has been a contributing member of the system for 12 months of partici-

pating service, and shall have given such member's employer prior notice

of retirement.

(4) If a retirant who retired on or after July 1, 1996, is employed,

elected or appointed in or to any position or office for which compensa-

tion for service is paid in an amount equal to $15,000 or more in any one

such calendar year, by the same state agency or the same police or fire

department of any county, city, township or special district or the same

sheriff's office of a county during the final two years of such retirant's

participation, such retirant shall not receive any retirement benefit for

any month for which such retirant serves in such position or office. The

participating employer shall report to the system within 30 days of when

the compensation paid to the retirant is equal to or exceeds any limitation

provided by this section. Any retirant employed by a participating em-

ployer in the Kansas police and firemen's retirement system shall not

make contributions nor receive additional credit under such system for

such service except as provided by this section. Upon request of the ex-

ecutive secretary director of the system, the secretary of revenue shall

provide such information as may be needed by the executive secretary

director to carry out the provisions of this act.

(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 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. 31. K.S.A. 2000 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) Pursuant to the provisions of K.S.A. 2000 Supp. 74-49,128, and

amendments thereto, 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 provided 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) Pursuant to the provisions of K.S.A. 2000 Supp. 74-

49,128, and amendments thereto, 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 (B) 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. 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 K.S.A. 2000 Supp. 74-49,123 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. 32. K.S.A. 2000 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) Pursuant to the provisions of K.S.A. 2000 Supp. 74-49,128, and

amendments thereto, 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 provided 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) Pursuant to the provisions of K.S.A. 2000 Supp. 74-

49,128, and amendments thereto, 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 (B) 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. 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 K.S.A. 2000 Supp. 74-49,123 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. 33. K.S.A. 2000 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

director 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 director 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 K.S.A. 2000 Supp. 74-49,123 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 chil-

dren'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 amend-

ments 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 stu-

dents as provided in K.S.A. 74-49,117 and amendments thereto, the an-

nual 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. Com-

mencing 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.

(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) Pursuant to the provisions of K.S.A. 2000 Supp. 74-49,128, and

amendments thereto, upon the death from causes not service-connected

of an active contributing member prior to retirement, the member's

spouse, if lawfully 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 an-

nual 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 applica-

tion for such benefits in such form and manner as prescribed by the board

must be filed in the office of the executive secretary director of the board

within two years of the date of death, but the board may waive such time

limit for a reasonable 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. 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 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 K.S.A. 2000

Supp. 74-49,123 and amendments thereto, in equal shares to such chil-

dren 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

following shall be paid to the member's beneficiary: (a) The member's

accumulated contributions; and (b) a lump sum death benefit equal to

100% of the member's current annual salary reduced by the sum of the

member's accumulated contributions paid as provided by this section.

(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. 34. K.S.A. 2000 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 director 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 author-

ized representative in the office of the executive secretary director of the

board within two years of the date of disability, except the board may

waive such two-year requirement if the board is presented with evidence

that clearly warrants such a waiver:

(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) Except as otherwise provided by this subsection, each of the mem-

ber'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 termination of benefits by reason of such child's mar-

riage but before the effective date of this act. For a member who becomes

totally and permanently disabled as provided in this section on and after

July 1, 2001, only the member's children who were born, conceived or

adopted prior to the commencement of the member's disability are entitled

to the annual benefit as provided in this subsection.

(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 K.S.A. 2000 Supp. 74-49,123 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.

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

director 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 director of the board within two years of the date of disability:,

except that the board may waive such two-year requirement, if the board

is presented with evidence that clearly warrants such a waiver.

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) Pursuant to the provisions of K.S.A. 2000 Supp. 74-49,128, and

amendments there, In the event a member who is retired under subsec-

tion (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) Pursuant to the provisions of K.S.A. 2000 Supp. 74-49,128, and

amendments thereto, to the member's spouse, if lawfully wedded to the

member at the time of the member's death and if no benefits are payable

under subsection (3) of K.S.A. 74-4958, and amendments thereto, 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 K.S.A. 2000 Supp. 74-49,123 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.

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 more frequent 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 trus-

tees may direct. If upon such medical examination, the examiner's report

to the board states that the retirant is physically able and capable of re-

suming employment with the same or a different participating employer,

the disability benefits shall terminate. A retirant who has been receiving

benefits under the provisions of this section and who returns to employ-

ment, as defined in subsection (4) of K.S.A. 74-4952 and amendments

thereto, of a participating employer shall immediately commence accru-

ing service credit which shall be added to that which has been accrued

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 director 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, and after

June 30, 1998, for which a report of the event was made by the partici-

pating employer to the director of workers' workers compensation in ac-

cordance with K.S.A. 44-557 and amendments thereto, such report to the

director of workers' workers compensation 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 re-

quirement with respect to events occurring on or after July 1, 1979, and

prior to July 1, 1998.

(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.

(13) Any retirant who has been receiving benefits under the provi-

sions of this section and who returns to employment with the same or

different participating employer in the system shall be deemed no longer

retired.

(14) Upon the death of a member after retirement, if no benefits are

payable under the provisions of this section, the excess, if any, of the

retirant's accumulated contributions over the sum of all benefits paid shall

be paid to the member's beneficiary.

Sec. 35. K.S.A. 2000 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 director of the board within 220 days after the date of

the commencement of such disability and if an application for such ben-

efit in such form and manner as the board shall prescribe is filed in the

office of the executive secretary director of the board within two years of

the date of the commencement of such disability, except that the board

may waive such two-year requirement, if the board is presented with

evidence that clearly warrants such a waiver.

(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) Pursuant to the provisions of K.S.A. 2000 Supp. 74-49,128, and

amendments thereto, In the event a member who is disabled and entitled

to such benefits 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) Pursuant to the provisions of K.S.A. 2000 Supp. 74-49,128, and

amendments thereto, to the member's spouse, if lawfully wedded to the

member at the time of the member's death, and if no benefits are payable

under subsection (3) of K.S.A. 74-4958a, and amendments thereto, 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 K.S.A. 2000 Supp. 74-49,123 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 more frequent than annually, by one or more

physicians or any other practitioners of the healing arts holding a valid

license issued by the state board of healing arts to practice a branch of

the healing arts, as the board of trustees may direct. If upon such medical

examination, the examiner's report to the board states that the member

is physically able and capable of resuming employment with the same or

a different participating employer, the disability benefits shall terminate.

A member who has been receiving benefits under the provisions of this

section and who returns to employment, as defined in subsection (4) of

K.S.A. 74-4952 and amendments thereto, 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, but before July 1, 1998. Effective July 1, 1998, such mem-

ber's current annual rate shall be adjusted upon retirement by an amount

equal to the lesser of: (1) The percentage increase in the consumer price

index for all urban consumers as published by the bureau of labor statistics

of the United States department of labor minus one percent; or (2) four

percent per annum, measured from the member's last day on the payroll

to the month that is two months prior to the month of retirement, for

each year of disability after July 1, 1998.

(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.

(15) Any retirant who has been receiving benefits under the provi-

sions of this section and who returns to employment with the same or

different participating employer in the system shall be deemed no longer

retired.

(16) Upon the death of a member after retirement, if no benefits are

payable under the provisions of this section, the excess, if any, of the

retirant's accumulated contributions over the sum of all benefits paid shall

be paid to the member's beneficiary.

Sec. 36. K.S.A. 2000 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, after 30 days after such termination

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 application 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 K.S.A. 2000 Supp. 74-49,123 and

amendments thereto, members who do not elect to repay within 31 days

of return to covered employment may elect to purchase previously for-

feited 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. purchase service credit for such pre-

viously forfeited service credit, subject to the provisions of K.S.A. 2000

Supp. 74-49,123, and amendments thereto, 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, 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 quarters of such service have been purchased. Subject

to the provisions of K.S.A. 2000 Supp. 74-49,123, and amendments

thereto, such member may elect to effect such purchase by means of a

single lump-sum payment in lieu of the increased amount of the em-

ployee's contribution rate otherwise provided for in this act in an amount

equal to the then present value of the benefits being purchased determined

by the actuary using the member's attained age, annual compensation at

the time of purchase and the actuarial assumptions and tables then in use

by the retirement system. The lump-sum payment shall be made imme-

diately upon being notified of the amount due. Upon receipt of such pay-

ment 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 mem-

ber's previously forfeited participating 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 K.S.A. 2000

Supp. 74-49,123 and amendments thereto, to purchase 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.

(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. 37. K.S.A. 2000 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, after 30 days after such termination

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 application 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 K.S.A. 2000 Supp. 74-49,123 and

amendments thereto, members who do not elect to repay within 31 days

of return to covered employment may elect to purchase previously for-

feited 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. purchase service credit for such pre-

viously forfeited service credit, subject to the provisions of K.S.A. 2000

Supp. 74-49,123, and amendments thereto, 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, 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 quarters of such service have been purchased. Subject

to the provisions of K.S.A. 2000 Supp. 74-49,123, and amendments

thereto, such member may elect to effect such purchase by means of a

single lump-sum payment in lieu of the increased amount of the em-

ployee's contribution rate otherwise provided for in this act in an amount

equal to the then present value of the benefits being purchased determined

by the actuary using the member's attained age, annual compensation at

the time of purchase and the actuarial assumptions and tables then in use

by the retirement system. The lump-sum payment shall be made imme-

diately upon being notified of the amount due. Upon receipt of such pay-

ment 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 mem-

ber's previously forfeited participating 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 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 K.S.A. 2000

Supp. 74-49,123 and amendments thereto, to purchase 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.

(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. 38. K.S.A. 2000 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 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 K.S.A. 2000 Supp. 74-49,123 and amendments thereto, are avail-

able:

(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.

(G) Lump sum payment at retirement. (i) Pursuant to this option, the

member must specify a lump sum amount to be paid to the member

upon the member's retirement. The lump sum amount will be based on

the actuarial present value of the benefit as provided in K.S.A. 74-4958,

and amendments thereto. The lump sum amount designated by the mem-

ber must be in 10% increments and shall not exceed 1/2 of the actuarial

present value of the benefit provided in K.S.A. 74-4958, and amendments

thereto.

(ii) Pursuant to this option, the member must elect to have the re-

maining actuarial present value paid in a monthly amount under the pro-

visions of K.S.A. 74-4958, and amendments thereto, or subsections (5)(A)

through (5)(F) of this section.

(iii) The amount of any retirement benefit payable pursuant to this

subsection shall remain as provided in this subsection even in the event

that the designated joint annuitant pursuant to subsections (5)(A), (5)(B)

or (5)(C) predeceases the retirant. In the event that the designated joint

annuitant pursuant to subsection (5)(A), (5)(B) or (5)(C) 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.

(iv) The provisions of this subsection shall be effective on and after

July 1, 2001.

(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. 39. K.S.A. 2000 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 through 13-14a14, inclusive or 14-10a01 through 14-10a15, in-

clusive, 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 K.S.A. 2000 Supp. 74-49,123 and amendments thereto, are avail-

able:

(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.

(G) Lump sum payment at retirement. (i) Pursuant to this option, the

member must specify a lump sum amount to be paid to the member

upon the member's retirement. The lump sum amount will be based on

the actuarial present value of the benefit as provided in K.S.A. 74-4958a,

and amendments thereto. The lump sum amount designated by the mem-

ber must be in 10% increments and shall not exceed 1/2 of the actuarial

present value of the benefit provided in K.S.A. 74-4958a, and amend-

ments thereto.

(ii) Pursuant to this option, the member must elect to have the re-

maining actuarial present value paid in a monthly amount under the pro-

visions of K.S.A. 74-4958a, and amendments thereto, or subsections

(5)(A) through (5)(F) of this section.

(iii) The amount of any retirement benefit payable pursuant to this

subsection shall remain as provided in this subsection even in the event

that the designated joint annuitant pursuant to subsections (5)(A), (5)(B)

or (5)(C) predeceases the retirant. In the event that the designated joint

annuitant pursuant to subsection (5)(A), (5)(B) or (5)(C) 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.

(iv) The provisions of this subsection shall be effective on and after

July 1, 2001.

(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. 40. K.S.A. 2000 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 director for credit to

the Kansas public employees retirement fund and shall be credited to the

members' individual accounts. Interest on each member'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 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 K.S.A. 2000 Supp. 74-49,123 and

amendments thereto, each participating employer, pursuant to the pro-

visions of section 414(h)(2) of the federal internal revenue code, shall

pick up and pay the contributions which would otherwise be payable by

members as prescribed in subsection (1) commencing with the third quar-

ter 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 director 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 commencing 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. 41. K.S.A. 2000 Supp. 74-4967 is hereby amended to read as

follows: 74-4967. (1) Upon the basis of an annual actuarial valuation and

appraisal of the system conducted in the manner provided for in K.S.A.

74-4908 and amendments thereto, the board shall certify, on or before

July 15 of each year to each participating employer an actuarially deter-

mined estimate of the rate of contribution which shall be required to be

paid by each such participating employer to pay all of the liabilities which

shall accrue under the system from and after the entry date as determined

by the board, upon recommendation of the actuary. Such rate shall be

uniform for all participating employers, and shall be comprised of a rate

for benefits accruing after June 30, 1993, and a rate for amortization of

the additional liability for benefits provided by this act which is attribut-

able to service rendered before July 1, 1993. Such additional liability shall

be amortized over a period of 40 years commencing on July 1, 1993, by

annual payments that increase 4% for each year remaining in the amor-

tization period. The employer's rate of contribution determined under

this section shall not include the costs of administration of the system.

(2) The board shall determine for each employer separately an

amount sufficient to amortize over a period of not to exceed 40 years all

liabilities for past service costs which shall have accrued at the time of

entry into the system. On the basis of such determination the board shall

annually certify to each participating employer separately an actuarially

determined estimate of the rate of contribution which shall be required

to be paid by that participating employer to pay all of the liabilities for

such past service costs. Such rate shall be termed the employer's prior

service contribution. The board may enter into agreements with any par-

ticipating employer which has employees or retirants under the special

pension systems established under K.S.A. 13-14a01 to 13-14a14, inclu-

sive, and amendments thereto or K.S.A. 14-10a01 to 14-10a15, inclusive,

and amendments thereto, for the purpose of scheduling the payment of

such past service costs in an orderly manner which will tend to stabilize

the annual total financial burden on such employers in meeting their

present and future obligations under this system and such special systems,

but in no event shall the annual prior service contribution be less than

the interest cost on the total of such past service liability.

(3) Each participating employer shall appropriate and pay to the sys-

tem a sum sufficient to satisfy the obligations under this act as certified

by the board.

(4) Each participating employer is hereby authorized to pay the em-

ployer's contribution from the same fund that the compensation for which

such contribution is made is paid from or from any other funds available

to it for such purpose. Each employer may levy annually at the time of

its levy of taxes, a tax which may be in addition to all other taxes authorized

by law for the purpose of making its contributions under this act, and, in

the case of cities and counties, to pay a portion of the principal and in-

terest on bonds issued by cities under the authority of K.S.A. 12-1774,

and amendments thereto, for the financing of redevelopment projects

upon property located in such county which tax, together with any other

fund available, shall be sufficient to enable it to make such contribution.

In lieu of levying the tax authorized in this subsection, any taxing subdi-

vision may pay such costs from any employee benefits contribution fund

established pursuant to K.S.A. 12-16,102 and amendments thereto.

(5) Employer contributions shall in no way be limited by any other

act which now or in the future establishes or limits the compensation of

any member.

(6) The rate of contribution certified to each participating employer

as provided in this section shall apply during the fiscal year of such par-

ticipating employer which begins in the second calendar year following

the year of the actuarial valuation, but the rate of contribution during the

first year following the employer's entry date shall be equal to 16% of the

amount of compensation on which members contribute during the year.

(7) Each participating employer shall remit quarterly, or as the board

may otherwise provide, all employee deductions and required employer

contributions to the executive secretary director for credit to the Kansas

public employees retirement fund within 20 days after the end of the

period covered by the remittance or within 25 days after forms or written

instructions from the system were mailed by the system to such employer,

whichever is later. Remittances of such deductions and contributions re-

ceived after such date are delinquent. Delinquent payments due under

this subsection (7) shall be subject to interest at the rate established for

interest on judgments under subsection (a) of K.S.A. 16-204 and amend-

ments thereto. At the request of the board, delinquent payments which

are due or interest owed on such payments, or both, may be deducted

from any other moneys payable to such employer by any department or

agency of the state.

(8) Except as otherwise provided by law, the actuarial cost of any

legislation enacted by the Kansas legislature, except the actuarial cost of

K.S.A. 2000 Supp. 74-49,114a, shall be reflected in the employer contri-

bution rate in the fiscal year immediately following such enactment.

Sec. 42. K.S.A. 74-4978h is hereby amended to read as follows: 74-

4978h. Beginning with the first payment of compensation for services of

a patrolman after becoming a special member of the Kansas police and

firemen's retirement system, the employer shall deduct from the com-

pensation of such special member 8% as employee contribution. Such

deductions shall be remitted, as the board may provide, to the executive

secretary director for credit to the Kansas public employees retirement

fund, and such deduction shall be credited to the member's individual

account.

Sec. 43. K.S.A. 2000 Supp. 74-4989 is hereby amended to read as

follows: 74-4989. (1) (a) Except as provided in (b), pursuant to the pro-

visions of K.S.A. 2000 Supp. 74-49,128, and amendments thereto, upon

the death of a retirant, the board of trustees of the Kansas public em-

ployees retirement system shall pay a lump-sum death benefit to: The

retirant's beneficiary which shall not exceed $4,000 for such retirant, less

any amount payable for funeral benefits under the applicable provisions

of any local police or fire pension plan, as defined by subsection (c) of

K.S.A. 12-5001 and amendments thereto; or to a funeral establishment

as directed by the retirant and filed in the office of the system prior to

such retirant's death.

(b) Notwithstanding the provisions of K.S.A. 74-4923 and amend-

ments thereto, any amounts owed the system shall be deducted from such

lump-sum death benefit.

(2) As used in this section, ``retirant'' means any person who is a

member or special member of the Kansas public employees retirement

system, the Kansas police and firemen's retirement system, the state

school retirement system or the retirement system for judges and who

has retired.

Sec. 44. K.S.A. 2000 Supp. 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 ef-

fective 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

effective date of this act, the employer shall deduct from the compen-

sation 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 K.S.A. 2000 Supp. 74-49,123 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 com-

mencing 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 director 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 K.S.A. 2000 Supp. 74-49,123 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 de-

termining the amounts of federal income taxes to withhold from the

elected state official's compensation.

(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 director 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. 45. K.S.A. 74-49,102 is hereby amended to read as follows: 74-

49,102. Beginning with the first payroll for services performed after July

1, 1975, of each person who is a member of the Kansas public employees

retirement system pursuant to subsection (b) of K.S.A. 74-4999 and

amendments thereto, the employer shall deduct from the compensation

of such person 4% of such person's compensation as employee contri-

butions. Such deductions shall be remitted quarterly, or as the board of

trustees of the Kansas public employees retirement system may otherwise

provide, to the executive secretary director of the system for credit to 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 beginning as provided in subsection (d) of K.S.A.

74-49,103 and amendments thereto.

Sec. 46. K.S.A. 2000 Supp. 74-49,128 is hereby amended to read as

follows: 74-49,128. The lump sum death benefits, survivor benefits and

funeral expenses that are provided to surviving spouses, minor children

and other beneficiaries as a result of a nonduty related death or retirant

death pursuant to K.S.A. 13-14a07, 13-14a11, 14-10a07, 14-10a11, 74-

4958, 74-4958a, 74-4959, 74-4960, 74-4960a and 74-4989, and amend-

ments thereto, are in the nature of life insurance; are provided by the

participating employers for the protection of members' spouses, survivors

or beneficiaries as provided in those sections; and are not subject to reg-

ulation of the state of Kansas department of insurance. The provisions of

this section shall be effective on and after July 1, 2000.

Sec. 47. K.S.A. 2000 Supp. 75-37,132 is hereby amended to read as

follows: 75-37,132. (a) Except as provided in this section, all contracts for

professional and consultant services, shall be negotiated in accordance

with the provisions of K.S.A. 75-37,102, and amendments thereto.

(b) The provisions of subsection (a) shall not apply to any contract

for professional or consultant services that the director of purchases de-

termines meets one or more of the criteria established in subsections (a)

and (h) of K.S.A. 75-3739, and amendments thereto. When the director

of purchases approves a contract for professional or consultant services

under this subsection, the director may delegate authority to the agency

to enter into the contract under conditions and procedures prescribed by

the director.

(c) The provisions of subsection (a) shall not apply to any contract for

professional or consultant services that is not anticipated to exceed

$25,000 in any fiscal year. Such a contract shall be entered into by the

state agency on the basis of competitive negotiations with at least two

individuals or firms unless the head of the agency determines that com-

petitive negotiations are not in the best interest of the state. The agency

head shall make a report to the director of purchases at least once in each

calendar quarter during the term of each contract for professional or

consultant services that exceeds $5,000 and that was entered into without

competitive negotiations.

(d) The director of purchases shall prepare a detailed report at least

once in each calendar quarter during the term of each contract for pro-

fessional or consultant services that exceeds $5,000 that is entered into

under subsection (b) and all contracts for professional or consultant serv-

ices reported to the director under subsection (c). The director of pur-

chases shall submit such report to the legislative coordinating council, the

chairperson of the committee on ways and means of the senate, the chair-

person of the committee on appropriations of the house of representatives

and the chairperson of the Kansas performance review board.

(e) All contracts for architectural services, engineering services, con-

struction management or ancillary technical services entered into by a

state agency shall be entered into in accordance with the provisions of

K.S.A. 75-430a, 75-1250 through 75-1266 and 75-5801 through 75-5807,

and amendments thereto.

(f) All contracts for professional services entered into by the board of

governors of the health care stabilization fund shall be entered into in

accordance with the provisions of K.S.A. 40-3410 and 40-3411, and

amendments thereto.

(g) Upon written certification from the commissioner of insurance to

the director of purchases and the legislative budget committee that an

emergency exists and the best interests of the state would be jeopardized

by compliance with subsection (a), the provisions of subsections (a) and

(c) shall not apply to contracts for legal services performed under article

36 of chapter 40 of the Kansas Statutes Annotated.

(h) In the case of any contract for professional services or consultant

services for the board of trustees of the Kansas public employees retire-

ment system that is negotiated in accordance with the provisions of K.S.A.

75-37,102, and amendments thereto:

(1) The negotiating committee shall be composed of the members of

the board of trustees, notwithstanding the provisions of subsection (b) of

K.S.A. 75-37,102, and amendments thereto, to the contrary; and

(2) the board of trustees shall report each contract for professional

services or consultant services entered pursuant to this subsection to the

director of purchases, including the rationale of the board of trustees if

the bid or proposal selected by the board of trustees was not the lowest

cost bid or proposal submitted and a report of such contract and such

rationale shall be included in the report submitted by the director of pur-

chases pursuant to subsection (e) of K.S.A. 75-37,102, and amendments

thereto.

Sec. 48. K.S.A. 2000 Supp. 75-37,135 is hereby amended to read as

follows: 75-37,135. (a) (1) Prior to entering a contract for legal services

where the amount of the fees paid to an attorney or firm of attorneys

reasonably may exceed $1,000,000, the director of purchases shall submit

the proposed request for proposal to the legislative budget committee.

Within 30 days after submission of such request for proposal, the com-

mittee may hold a public hearing on the proposed request for proposal

and shall issue a report to the director of purchases. The report shall

include any proposed changes to the proposed request for proposal sug-

gested by the committee. The committee is not authorized to waive the

evidentiary privileges of the state, or any of the persons or entities that

state attorneys are representing or acting in concert with in any litigation

or anticipated litigation. The committee, the director of purchases and

their employees shall take all reasonable steps to protect such privileges.

The director of purchases shall review the report and adopt a final request

for proposal as deemed appropriate in view of the report and shall file

the final request for proposal with the legislative budget committee.

(2) If the proposed request for proposal does not contain the changes

proposed by the committee, the director of purchases shall submit with

the final request for proposal a letter stating the reasons why such pro-

posed changes were not adopted. The director of purchases shall not

release the final request for proposal until at least 10 days after the date

of submission of the final request for proposal to the legislative budget

committee.

(3) If the legislative budget committee makes no suggested changes

to the proposed request for proposal or fails to report any suggested

changes within 60 days of the submission of the proposed request for

proposal to such committee, the director of purchases may release the

request for proposal.

(b) After awarding a contract for legal services where the amount of

the fees paid to an attorney or firm of attorneys reasonably may exceed

$1,000,000, the director of purchases shall submit the contract to the

legislative budget committee. Within 30 days after submission of such

contract, the committee may hold a public hearing on the contract and

shall issue a report to the director of purchases. The report shall include

any concerns of the committee.

(c) The provisions of this section shall not apply in any action in which

the state of Kansas or any state agency, officer or employee is a defendant

and a contract for legal services is to be entered. The director of purchases

shall prepare a report each calendar quarter while such legal proceeding

is in progress. Such report shall include the case citation and the date

upon which the action was filed. The director of purchases shall submit

the report to the legislative coordinating council, the chairperson of the

committee on ways and means of the senate, the chairperson of the com-

mittee on appropriations of the house of representatives and the chair-

person of the Kansas performance review board.

(d) The director of purchases shall prepare a detailed report at least

once in each calendar quarter of each legal proceeding which has been

completed and for which a contingency fee arrangement was entered.

Such report shall disclose the hours worked on the case, the expenses

incurred, the aggregate fee amount and a breakdown as to the hourly

rate, based on hours worked divided into fee recovered, less expenses.

The director of purchases shall submit the report to the legislative coor-

dinating council, the chairperson of the committee on ways and means

of the senate, the chairperson of the committee on appropriations of the

house of representatives and the chairperson of the Kansas performance

review board.

(e) Reasonable attorney fees to be paid by the state or defendant in

an action where the attorney was hired by the state with a contingency

fee agreement shall be approved by the judge after an evidentiary hearing

and prior to final disposition of the case by the district court. Any indi-

vidual may provide information to the court and be heard before the court

with regard to the reasonableness of attorney fees paid by the state or

defendant under the contingency fee agreement. Compensation for rea-

sonable attorney fees for services performed in an appeal of a judgment

in any such action to the court of appeals shall be approved after an

evidentiary hearing by the chief judge or by the presiding judge of the

panel hearing the case. Compensation for reasonable attorney fees for

services performed in an appeal of a judgment in any such action to the

supreme court shall be approved after an evidentiary hearing by the de-

partmental justice for the department in which the appeal originated. In

determining the reasonableness of such compensation, the judge or jus-

tice shall consider the following:

(1) The time and labor required, the novelty and difficulty of the

questions involved and the skill requisite to perform the legal service

properly.

(2) The likelihood, if apparent to the client, that the acceptance of

the particular employment will preclude other employment by the attor-

ney.

(3) The fee customarily charged in the locality for similar legal serv-

ices.

(4) The amount involved and the results obtained.

(5) The time limitations imposed by the client or by the circum-

stances.

(6) The nature and length of the professional relationship with the

client.

(7) The experience, reputation and ability of the attorney or attorneys

performing the services.

(8) Whether the fee is fixed or contingent.

(f) In the case of any contract for legal services for the board of trus-

tees of the Kansas public employees retirement system negotiated or to be

negotiated in accordance with the provisions of K.S.A. 75-37,102, and

amendments thereto, where the amount of fees paid to an attorney or to

a firm of attorneys reasonably may exceed $1,000,000, references to the

``director of purchases'' in subsections (a), (b) and (c) of this section shall

be construed to apply to the board of trustees of the Kansas public em-

ployees retirement system and each duty or function prescribed in such

subsections shall be assumed and performed by the board of trustees of

the Kansas public employees retirement system.

New Sec. 49. The retirement benefit, pension or annuity payments

to each retirant of the state school retirement system who retired prior

to January 1, 1971, and who had at least 20 years or more of service credit,

shall for retirement benefit, pension or annuity payments accruing after

June 30, 2001, be in an amount as otherwise provided by law but shall

be an amount at least equal to $500.

New Sec. 50. Any judge who has retired or who retires as provided

in K.S.A. 20-2608, and amendments thereto, and who has entered into

agreement with the Kansas supreme court to perform assigned judicial

duties as provided pursuant to K.S.A. 20-2622, and amendments thereto,

may elect to purchase, subject to the provisions of K.S.A. Supp. 74-

49,123, service credit for such service under the retirement system for

judges. Such purchase shall be by means of a single lump-sum payment.

Such lump-sum payment shall be an amount determined by the actuary

using the judge's current age, the final average salary of such judge at the

time of such judge's retirement, the form of the payment of the annuity

to such judge including any retirement option elected by such judge pur-

suant to K.S.A. 20-2610a, and amendments thereto, and the actuarial

assumptions and tables then in use by the system.

New Sec. 51. Except as otherwise provided, any active contributing

member of the retirement system who at one time had the state board

of regents assist such member in the purchase of retirement annuities as

provided in K.S.A. 74-4925, and amendments thereto and who withdrew

such member's accumulated contributions upon the termination of such

employment as provided in K.S.A. 74-4925, and amendments thereto,

may purchase participating service credit for any waiting period required

pursuant to K.S.A. 74-4925, and amendments thereto. Such member may

purchase, subject to the provisions of K.S.A. 2000 Supp. 74-49,123, and

amendments thereto, such service credit by making a single lump-sum

payment in an amount determined by the actuary using (1) the member's

then current annual rate of compensation, (2) the actuarial assumptions

and tables currently in use by the system and (3) the member's attained

age.

Sec. 52. K.S.A. 74-4934, 74-4978h and 74-49,102 and K.S.A. 2000

Supp. 13-14a07, 14-10a07, 20-2603, 20-2610a, 74-4902, 74-4904, 74-

4908, 74-4911e, 74-4914, 74-4914e, 74-4915, 74-4915b, 74-4915c, 74-

4916, 74-4918, 74-4918a, 74-4919, 74-4919b, 74-4920, 74-4921, 74-4922,

74-4925, 74-4927, 74-4927f, 74-4927h, 74-4932, 74-4940, 74-4957, 74-

4957a, 74-4958, 74-4958a, 74-4959, 74-4960, 74-4960a, 74-4963, 74-

4963a, 74-4964, 74-4964a, 74-4965, 74-4967, 74-4989, 74-4998c, 74-

49,128, 75-37,132 and 75-37,135 are hereby repealed.

Sec. 53. This act shall take effect and be in force from and after its

publication in the Kansas register.

Approved May 22, 2000.

Published in the Kansas Register May 31, 2000.


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Date Composed: 09/25/2001 Date Modified: 09/25/2001