Request By:
Mr. George R. Arvin
General Manager
Kentucky Retirement Systems
226 West Second Street
Frankfort, Kentucky 40601
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Thomas C. Jacobs, Deputy Attorney General
This is in response to your recent letter wherein you seek our advice pertaining to a rather unique factual situation which has recently arisen under KRS 61.637(1) involving an elected official whose term of office will expire at the close of the calendar year. You indicated that this individual has accrued sufficient service under KRS 61.559 to qualify for retirement benefits pursuant to KRS 61.595 and intends to file for retirement benefits as provided in KRS 61.590. Significantly, this individual, who is over the age of seventy-two, has been elected to serve another four year term commencing January 1, 1978 and his apparent objective is to "retire" as of December 31, 1977 at the close of his current term. He then wishes to receive retirement benefits as provided under KRS 61.637(1) and thereafter commence serving his new term of office on January 1, 1978. The question thus presented is whether KRS 61.637(1) can be construed to permit him to receive full state retirement benefits under KRS 61.637(1)? The answer is yes.
KRS 61.637(1) reads as follows:
"A retired member who is receiving monthly retirement payments under any of the provisions of KRS 61.510 to 61.700 and 78.510 to 78.990 and who is re-employed as an employe by a participating agency, shall have his retirement payments suspended for the duration of such re-employment. Monthly payments shall not be suspended for a retired member who is re-employed in a seasonal, emergency, temporary, part-time, or full-time position if he anticipates that he will receive less than the maximum permissible earnings as provided by the Federal Social Security Act in compensation as a result of re-employment during the calendar year. The payments shall be suspended at the beginning of the month in which the re-employment occurs." (Emphasis ours)
As you are aware, pursuant to Title 42 U.S.C. § 403, the federal social security law currently permits a retired person under the age of seventy-two to earn income up to a maximum amount of $3,000 during the calendar year and continue to receive his federal social security benefits without any resultant decrease in those benefits. Conversely, once the retiree's earnings exceed the maximum permitted his social security benefits are decreased accordingly. Also, under federal law once a retired individual receiving federal social security benefits attains the age of seventy-two there is no limit to the amount of money he may earn during the course of the calendar year and his federal social security benefits will not be adversely affected. This presents the issue of whether the language of KRS 61.637(1) would permit a retiree of the state or county systems, age seventy-two or older, to become re-employed by the state or county and continue receiving full retirement benefits.
It is the established rule of statutory construction that the policy and purpose of the statute will be considered in determining the meaning of the words used. And, the words used in a statute will be ascribed a meaning consistent with the purpose and policy of the law providing for a retirement system for public employees. Kentucky Region Eight, et al v. Commonwealth of Kentucky, et al, Ky., 507 S.W.2d 489 (1974). In the instant case we are dealing with a statutory provision, KRS 61.637(1), which has direct reference to the Federal Social Security Act. Does the language of this provision permit the named individual in this case who is age seventy-two or over to draw full state retirement benefits as he would be able to draw full federal social security benefits even though he is re-employed in a full time capacity? It is our opinion that the underscored language in KRS 61.637(1) would include those retirees who are age seventy-two or over. The language in that statute refers to "the maximum permissible earnings as provided by the Federal Social Security Act. "
In effect, once a retiree is age seventy-two or older the maximum permissible earnings are whatever he can earn. After all, it must be kept in mind that, as a general matter, pension statutes are to be given a liberal construction in favor of the recipient. Mayberry v. Coyne, Ky., 312 S.W.2d 455 (1958).
We hope that the foregoing has sufficiently answered your question.