H. B. 2419
(By Delegates Hubbard, Caputo and Tucker)
[Introduced February 21, 2001; referred to the
Committee on Pensions and Retirement then Finance.]
A BILL to amend and reenact sections seven and nine, article
seven-b, chapter eighteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, all relating to
reentry into the teacher retirement system and additional
voluntary contributions to the defined contribution retirement
system; and consolidated public employees retirement board to
conduct study of feasibility of allowing employee
contributions to the defined contribution system in addition
to statutory required contributions.
Be it enacted by the Legislature of West Virginia:
That sections seven and nine, article seven-b, chapter
eighteen of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended and reenacted, all to read as
follows:
ARTICLE 7B. TEACHERS' DEFINED CONTRIBUTION RETIREMENT SYSTEM.
§18-7B-7. Participation in teachers' defined contribution
retirement system; limiting participation in existing
teachers' retirement system.
Beginning the first day of July, one thousand nine hundred
ninety-one, the teachers' defined contribution retirement system
shall be the single retirement program for all new employees whose
employment commences on or after that date. No additional new
employees except as may be provided herein may be admitted to the
existing retirement system. Members of the existing retirement
system whose employment continues beyond the first day of July, one
thousand nine hundred ninety-one, are not affected by this article
and shall continue to contribute and participate in the existing
system without change in provisions or benefits.
Notwithstanding the provisions of section twenty-three,
article seven-a of this chapter, any employee whose employment
terminates after the thirtieth day of June, one thousand nine
hundred ninety-one, who is later reemployed by an employer shall be
eligible for membership only in the teachers' defined contribution
system:
Provided, That if such reemployment with an existing
employer occurs not more than six months after the employee's
previous employment, he or she shall be entitled to readmission to
the existing retirement system in which he or she was originally a member:
Provided, however, That if such employee has five or more
years of credited service in the existing retirement system, he or
she shall be entitled to readmission into the existing retirement
system in which he or she was originally a member so long as he or
she has not withdrawn his or her contributions from the existing
retirement system:
Provided further, That if such employee has
withdrawn his or her contribution from the existing retirement
system, then readmission shall not be permitted and the employee
will be entitled only to the defined contribution system.
Any
employee reemployed with an employer on or after the first day of
July, one thousand nine hundred ninety-one, who had five or more
years credited service in the existing teachers' retirement system
may elect readmission to the existing teachers' retirement system
in which he or she was originally a member. Any employee
reemployed with an employer between the first day of July, one
thousand nine hundred ninety-one, and the first day of July, one
thousand nine hundred ninety-five, and who was required upon
reemployment to participate in the teachers' defined contribution
system but now elects pursuant to the provisions of this paragraph
readmission to the existing teachers' retirement system in which he
or she was originally a member shall pay an additional contribution
equal to one and one-half percent of his or her annual gross
compensation earned for each year he or she participated in the teachers' defined contribution system and transfer all
contributions from the teachers' defined contribution system to the
existing teachers' retirement system and shall receive service
credit for the time the employee participated in the defined
contribution system as if that participation had been in the
existing teachers retirement system.
An employee whose employment with an employer was suspended or
terminated while he or she served as an officer with a statewide
professional teaching association is eligible for readmission to
the existing retirement system in which he or she was a member.
Any employee reemployed with an employer on or after the first day
of July, one thousand nine hundred ninety-one, who had five or more
years credited service in the teachers' defined benefit retirement
system may elect readmission to the teachers' defined benefit
retirement system in which he or she was originally a member. Any
employee reemployed between the first day of July, one thousand
nine hundred ninety-one, and the first day of July, one thousand
nine hundred ninety-five, and who was required to participate in
the teachers' defined contribution system but now elects, pursuant
to the provisions of this section, readmission to the teachers'
defined benefit retirement system shall pay an additional
contribution to the teachers' defined benefit retirement system
equal to one and one-half percent of his or her annual gross compensation earned for each year he or she participated in the
teachers' defined contribution system and shall transfer all member
and employer contributions and investment earnings therefrom from
the teacher defined contribution system to the teachers' defined
benefit system and shall receive service credit for the time the
member participated in the defined contribution system as if that
participation had been in the teachers' defined benefit retirement
system. Any member making an election under the provisions of this
section to reenter the teachers' defined benefit retirement system
who is currently a member of the defined contribution retirement
system must do so on or before the first day of January, one
thousand nine hundred ninety-six. Any other member reemployed must
make the election as to the retirement system that he or she will
be a member of at the time he or she is reemployed.
An employee whose employment with an employer or an existing
employer is suspended as a result of an approved leave of absence,
approved maternity or paternity break in service, or any other
approved break in service authorized by the board, is eligible for
readmission to the existing retirement system in which he or she
was a member.
In all cases where a question exists as to readmission to
membership in the existing retirement system, the board shall
decide the question.
Any individual who is a leased employee shall not be eligible
to participate in the system. For purposes of this system, a
"leased employee" means any individual who performs services as an
independent contractor or pursuant to an agreement with an employee
leasing organization or other similar organization. If a question
arises regarding the status of an individual as a leased employee,
the board has final power to decide the question.
§18-7B-9. Members' contributions; annuity account established.
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 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.
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
upon such contributions. The results of 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, two thousand one.
All member contributions shall 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 the
contributions. The results of said 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 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.
NOTE: The purpose of this bill is to allow employees who were
employed on or after July 1, 1991, who had five or more years of
credited service in the teachers' retirement system to return to
the original retirement system upon reemployment and to require the
Consolidated Public Retirement Board to study the feasibility of
allowing members of the defined contribution system to make
voluntary additional contributions annually.
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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