Senate Bill No. 408
(By Senator Oliverio)
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[Introduced February 3, 1999;
referred to the Committee
on Pensions; and then to the Committee on Finance.]
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A BILL to amend and reenact section twenty-six-a, article twenty- two, chapter eight of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
clarifying the method by which supplemental benefits are
calculated for municipal police, firefighter and other
pension funds.
Be it enacted by the Legislature of West Virginia:
That section twenty-six-a, article twenty-two, chapter eight
of the code of West Virginia, one thousand nine hundred thirty- one, as amended, be amended and reenacted to read as follows:
ARTICLE 22. RETIREMENT BENEFITS GENERALLY; POLICEMEN'S PENSION
AND RELIEF FUND; FIREMEN'S PENSION AND RELIEF
FUND; PENSION PLANS FOR EMPLOYEES OF WATERWORKS SYSTEM, SEWERAGE SYSTEM OR COMBINED WATERWORKS AND SEWERAGE SYSTEM.
§8-22-26a. Supplemental pension benefits entitlement; benefit
payable; application of section; construction.
(a) Except as otherwise provided in this section, all
retirees, surviving beneficiaries, disability pensioners or
future retirees shall receive as a supplemental pension benefit
an annualized monthly amount commencing on the first day of July,
based on a percentage increase equal to any increase in the
consumer price index as calculated by the United States
Department of Labor, Bureau of Statistics, for the preceding
year: Provided, That the supplemental pension benefit specified
herein shall not exceed four percent per year: Provided,
however, That no retiree shall be eligible for the supplemental
pension benefit specified herein until the first day of July
after the expiration of two years from the date of retirement of
said retiree: Provided further, That persons retiring prior to
the effective date of this section shall receive the supplemental
benefit provided for in this section immediately upon retirement and shall not be subject to the two year delay: And provided
further, That the supplemental benefit shall only be calculated
on the allowable amount, which is the first fifteen thousand
dollars of the total annual benefit paid plus additional
increases to the first fifteen thousand dollars resulting from
supplemental benefits calculated and allowed pursuant to this
section. If at any time, after the supplemental benefit becomes
applicable, the total accumulated percentage increase in benefit
on the allowable amount becomes less than seventy-five percent of
the total accumulated percentage increase in the consumer price
index over that same period of time, the four percent limitation
shall be inapplicable until such time as the supplemental benefit
paid equals seventy-five percent of the accumulated increase in
the consumer price index. The supplemental pension benefit
payable under the provisions of this section shall be paid in
equal monthly installments.
(b) Upon commencement of the payment of death benefits
pursuant to section twenty-six of this article, there shall be
calculated on the allowable amount, which is the first fifteen
thousand dollars
of the annual allowable benefit under said section twenty-six plus additional increases to the first fifteen
thousand dollars resulting from supplemental benefits calculated
and allowed pursuant to this section,
the supplemental benefit
provided for in subsection (a) of this section, using as the base
year the date that the retirement benefit provided for pursuant
to section twenty-five of this article began. as the base year
The amount of the death benefit provided pursuant to section
twenty-six of this article shall be calculated without regard to
any supplemental benefit previously paid under this section.
After the initial calculation made pursuant to this subsection
the beneficiary of the benefits provided for pursuant to section
twenty-six, shall, after reindexation, thereafter receive the
supplemental benefit provided for in subsection (a).
(c) Persons becoming disabled and eligible for a benefit
under subsection (d), section twenty-four of this article after
the first day of January, one thousand nine hundred ninety-one,
shall receive as an annualized monthly supplemental benefit
commencing on each July the first an amount based on a percentage
increase equal to any increase in the consumer price index as
calculated by the United States Department of Labor, Bureau of Statistics, for the preceding year: Provided, That the
supplemental pension benefit shall not exceed four percent per
year: Provided, however, That the benefit provided herein shall
not commence until the first day of July in the second year after
what would have been the earliest service retirement date
pursuant to section twenty-five of this article for the person
receiving the disability benefit: Provided further, That for
persons becoming eligible for a benefit under subsection (d),
article twenty-four of this section who were not employed in the
preceding year and file a copy of his or her income tax return by
the fifteenth of April each year, evidencing said lack of
employment, the benefit provided herein shall commence on the
first day of July in the second year after the date of
disablement: And provided further, That the supplemental benefit
shall only be calculated on the allowable amount, which is the
first fifteen thousand dollars of the total annual benefit paid
plus additional increases to the first fifteen thousand dollars
resulting from supplemental benefits calculated and allowed
pursuant to this section.
If at any time after the commencement
of the payment of the supplemental benefit provided under this subsection the total accumulated percentage increase in benefit
on the allowable amount becomes less than seventy-five percent of
the total accumulated increase in the consumer price index for
that same period of time, the four percent limitation shall be
inapplicable until such time as the supplemental benefit paid
equals seventy-five percent of the accumulated increase in the
consumer price index.
(d) Persons receiving a disability pension pursuant to
section twenty-four of this article prior to the first day of
January, one thousand nine hundred ninety-one, shall receive
commencing each July first, as an annualized monthly supplemental
benefit an amount based on a percentage increase equal to any
increase in the consumer price index as calculated by the United
States Department of Labor, Bureau of Statistics, for the
preceding year: Provided, That the supplemental benefit provided
herein shall not exceed two percent per year: Provided, however,
That beginning the first day of July two years after what would
have been the earliest service retirement date pursuant to
section twenty-five of this article the supplemental benefit
provided herein shall not exceed four percent per year. The amount of supplemental benefit provided in this subsection shall
not exceed four percent beginning the first day of July in any
twelve month period for any pensioner who files a certified copy
of his or her tax return evidencing that said pensioner was
unemployed in the preceding year and received no earned income.
The tax return shall be filed by the fifteenth of April in any
such year. If at any time after the first day of July in the
second year from what would have been the earliest service
retirement date pursuant to section twenty-five of this article
the total accumulated percentage increase in the supplemental
benefit provided pursuant to this subsection on the allowable
amount becomes less than the seventy-five percent of the total
accumulated percentage increase in the consumer price index over
that same period of time, the maximum percentage shall be
inapplicable until such time as the percentage increase in the
supplemental benefit paid equals seventy-five percent of the
accumulated increase in the consumer price index. The
supplemental benefit provided in this subsection shall only be
calculated on the allowable amount, which is the first fifteen
thousand dollars of the annual benefit paid plus additional increases to the first fifteen thousand dollars resulting from
supplemental benefits calculated and allowed pursuant to this
section.
(e) Any supplemental benefits paid during a period of
non-entitlement may be withheld out of subsequent regular monthly
pension benefits.
(f) During the fiscal year ending on the thirtieth day of
June, one thousand nine hundred ninety-six, and each year
thereafter, each municipal policemen's and firemen's pension fund
shall be reviewed by a qualified actuary who shall make a
determination as to its actuarial soundness. Based upon the
actuary's determination of the actuarial soundness of the fund,
the actuary shall certify to the board of trustees of the fund
the amount of increase in supplemental benefits, if any, which
may be paid, and which will preserve the minimum standards for
actuarial soundness of the fund, as set forth in section twenty
of this article. The board of trustees shall increase
supplemental benefits by an amount which is equal to the
actuary's certified recommendation, up to the four percent limit
contained in this section or the increase in the consumer price index, whichever is less. If the actuary determines that it is
necessary to preserve the actuarial soundness of the fund, the
board of trustees of the fund shall increase the percentage of
the members' contribution from seven percent to the amount
certified by the actuary not to exceed eight and one-half
percent, but only for so long as is necessary to achieve the
minimum standards for actuarial soundness required by section
twenty of this article. In any year in which there is no
supplemental benefit paid, such year shall the year may not be
included in the reindexation calculation provided pursuant to
this section.
(g) This section shall be construed liberally to effectuate
the purpose of establishing minimum pension benefits under this
article for members and surviving spouses.
NOTE: The purpose of this bill is to clarify the method by
which supplemental benefits are to be calculated for municipal
police, firefighter and other pension funds.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.