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The policy described herein applies to retirements which become
effective on or after January 1, 1974. Employees whose service is
in part with the University of Kentucky and in part with the U.S.
Veterans Administration are not covered under the Group IV TIAA/CREF
Plan.

5. Assumptions Involved in Computation of Supplemental Retirement Income

In determining whether participation in the Civil Service and/or the
TIAA/CREF retirement plan(s) has produced the minimum annual retire-
ment benefit described in Section III.B.1. through III.B.4., the
following assumptions shall be used:

(a) Assumptions Applicable to Calculation of Benefit from TIAA/CREF

     (1) That all retirement contributions, both from the employee
          and the University, were invested in a TIAA annuity contract
          (regardless of the percentages actually allocated to TIAA
          and CREF), and

     (2) That the retiring employee elected the single life annuity
          option the value of which is computed on the basis of the
          employee's age at time of retirement (regardless of the
          option(s) actually elected at retirement).

(b) Assumption Applicable to Calculation of Benefit from Civil Service

     That the retiring employee elected the single life annuity option
     (regardless of the option(s) actually elected at retirement).

6. Years of Service

As used in this retirement plan, "period of service" means the number
of years of full-time employment plus credit allowed for part-time
employment plus periods in an approved leave of absence status.
Periods of service shall be computed to the nearest half year.

Only years of continuous service immediately preceding retirement
shall be counted in computing years of service, except where a leave
of absence approved by the Board of Trustees or its Executive Committee
is of record. When an approved leave is for employment other than by
the University, and when the absence is in excess of one year, years of
absence in excess of one shall not be counted in determining supple-
mental retirement income, except by specific agreement at the time
the leave is taken or in exceptional instances upon recommendation
of the President and approval of the Board of Trustees. The period
during which an employee receives benefits under the University's
Total Disability Program will be included in the total years of service
factor used in the computation of benefits under the non-funded retire-
ment program.