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Introduced Version House Bill 2394 History

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Key: Green = existing Code. Red = new code to be enacted


H. B. 2394


(By Delegates Schadler, Leggett, Manuel,

Mezzatesta and Evans)


[Introduced February 21, 2001; referred to the

Committee on Pensions and Retirement then Finance.]




A BILL to amend and reenact section twenty-eight, article seven-a, chapter eighteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend and reenact section nine, article seven-b of said chapter, all relating to providing for retirement annuity survivor beneficiary options that allow members to designate someone other than a spouse as a primary beneficiary.

Be it enacted by the Legislature of West Virginia:

That section twenty-eight, article seven-a, chapter eighteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that section nine, article seven-b of said chapter be amended and reenacted, all to read as follows:

ARTICLE 7A. STATE TEACHERS RETIREMENT SYSTEM.

§18-7A-28. Options to beneficiaries; change of certain options because of divorce or annulment; limitation on recalculated monthly benefits.

(a) The retirement board is hereby authorized to offer plans, optional with the beneficiary, for the payment of allowances due such beneficiary for retirement, withdrawal or prior service pensions under the retirement system. No plans shall be offered, however, which are not approved by competent actuaries.
When a beneficiary and his or her spouse have been approved for a retirement plan which provides for them a joint life annuity, and their marriage is subsequently dissolved, the board shall permit such beneficiary to convert to the maximum life annuity plan approved by the board: Provided, That the beneficiary shall furnish to the board proof of entry of a final decree of divorce or annulment: Provided, however, That a beneficiary who qualifies for the change of retirement plans afforded by this section shall be permitted only one such change: Provided further, That the recalculated monthly benefits, independently of increases granted by law after the beneficiary's retirement, shall not exceed the monthly benefits which would have been applicable under the maximum life annuity plan at the time the beneficiary retired; and with such recalculation to be effective on the first day of the month following submission to the board by the beneficiary of proof of entry of a final decree of divorce or annulment.
(b) Upon remarriage, a retirant may name the new spouse as an annuitant for any of the survivorship retirement benefit options offered by the provisions of this section: Provided, That the beneficiary shall furnish furnishes to the retirement board satisfactory proof of the marriage: Provided, however, That the retirant certifies under penalty of perjury that no qualified domestic relations order that would restrict such a designation is in effect: Provided further, That no cause or action against the board may then arise or be maintained on the basis of having permitted the retirant to name a new spouse as annuitant for any of the survivorship retirement benefit options. The value of the new survivorship annuity shall be the actuarial equivalent of the retirant's benefit prospectively in effect at the time the new annuity is elected.
(c) Prior to the effective date of his or her retirement, but not thereafter except upon the death of a spouse, a member may elect to receive his or her annuity as a straight life annuity payable throughout his or her life, or he or she may elect to receive the actuarial equivalent, at the time, of his or her straight life annuity in a reduced annuity payable throughout his or her life, and nominate a beneficiary, in accordance with option A or B set forth below:
Option A -- Joint and survivor annuity. -- Upon the death of a retirant, who elected option A, his or her reduced annuity shall be continued throughout the life of and paid to the beneficiary, having an insurable interest in the retirant's life, whom the retirant nominated by written designation duly executed and filed with the board of trustees prior to the effective date of his or her retirement; or
Option B -- Modified joint and survivor annuity. -- Upon the death of a retirant who elected option B, one half of his or her reduced annuity shall be continued throughout the life of and paid to the beneficiary, having an insurable interest in the retirant's life, whom the retirant nominated by written designation duly executed and filed with the board of trustees prior to the effective date of his or her retirement.
Upon the death of a spouse, a retirant may elect any of the retirement options offered by the provisions of this section in an amount adjusted on a fair basis to be of equal actuarial value as the annuity prospectively in effect relative to the surviving member at the time the new option is elected.
ARTICLE 7B. TEACHERS' DEFINED CONTRIBUTION RETIREMENT SYSTEM.
§18-7B-9. Members' contributions; annuity account established; annuity options.
(a) Each employee who is a member of the defined contribution system shall contribute four and one-half percent of his or her gross compensation by salary reduction. Such the salary reductions shall be made by the employer at the normal payroll intervals and shall be remitted within five working days to the private pension, insurance, annuity, mutual fund, or other qualified company or companies designated by the board to administer the day-to-day operations of the system.
All member contributions shall must be immediately deposited to an account or accounts established in the name of the member and held in trust for the benefit of the member. An account agreement shall be issued to each member setting forth the terms and conditions under which contributions are received, and the investment and retirement options available to the member. The board shall promulgate by the thirtieth day of June, one thousand nine hundred ninety-one, pursuant to section six of this article, rules defining the minimum requirements for the investment and retirement options to be provided to the members.
The consolidated public employees retirement board shall study the feasibility of employees making personal contributions to the defined contribution system in addition to those required by this section and the impact of the United States Internal Revenue Code of one thousand nine hundred eighty-six, as amended, upon such contributions. The results of said the study and recommendations for legislation to authorize such additional payments shall be presented to the committee on pensions and retirement of each house of the Legislature on or before the first day of October, one thousand nine hundred ninety-six.
Such The rules, to the extent not inconsistent with the applicable provisions of the Internal Revenue Code of the United States, shall provide for varied retirement options including, but not limited to:
(1) Lump sum distributions;
(2) Joint and survivor annuities;
(3) Other annuity forms in the discretion of the board;
(4) Variable annuities which gradually increase monthly retirement payments: Provided, That said increased payments are funded solely by the existing current value of the member's account at the time the member's retirement payments commencement and not, to any extent, in a manner which would require additional employer or employee contributions to any member's account after retirement or after the cessation of employment; and
(5) The instances in which, if any, distributions or loans can be made to members from their annuity account balances prior to having attained the age of fifty-five.
(b) Prior to the effective date of his or her retirement, but not thereafter except upon the death of a spouse, a member may elect to receive his or her annuity as a straight life annuity payable throughout his or her life, or he or she may elect to receive the actuarial equivalent, at the time, of his or her straight life annuity in a reduced annuity payable throughout his or her life, and nominate a beneficiary, in accordance with option A or B set forth below:
Option A -- Joint and survivor annuity. -- Upon the death of a retirant, who elected option A, his or her reduced annuity shall be continued throughout the life of and paid to the beneficiary, having an insurable interest in the retirant's life, whom the retirant nominated by written designation duly executed and filed with the board of trustees prior to the effective date of his or her retirement; or
Option B -- Modified joint and survivor annuity. -- Upon the death of a retirant who elected option B, one half of his or her reduced annuity shall be continued throughout the life of and paid to the beneficiary, having an insurable interest in the retirant's life, whom the retirant nominated by written designation duly executed and filed with the board of trustees prior to the effective date of his or her retirement.
Upon the death of a spouse, a retirant may elect any of the retirement options offered by the provisions of this section in an amount adjusted on a fair basis to be of equal actuarial value as the annuity prospectively in effect relative to the surviving member at the time the new option is elected.


NOTE: The purpose of this bill is to provide for a retirement annuity survivor beneficiary option that allows a member to designate someone other than a spouse as a primary beneficiary.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.
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