Senate Bill No. 25
(By Senators Foster and White)
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[Introduced February 11, 2009; referred to the Committee on
Pensions; and then to the Committee on Finance.]
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A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §5-10E-1, §5-10E-2,
§5-10E-3, §5-10E-4, §5-10E-5, §5-10E-6 and §5-10E-7, all
relating to establishing the West Virginia Voluntary Accounts
Program; defining certain terms; requiring private employers
to provide employees savings opportunities; permitting certain
other savings plans; providing that the principal account is
created in the State Treasury; and providing procedures for
implementing a voluntary savings account program for employees
and employers in the private sector.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §5-10E-1, §5-10E-2,
§5-10E-3, §5-10E-4, §5-10E-5, §5-10E-6 and §5-10E-7, all to read as
follows:
ARTICLE 10E. CONSOLIDATED PUBLIC RETIREMENT BOARD VOLUNTARY
ACCOUNTS.
§5-10E-1. Findings.
The Legislature finds that many workers do not have access to
an employment-based retirement plan. Workers who are unable to
build up pensions and savings risk living on low incomes in their
old age and are more likely to become dependent on state services.
The voluntary accounts program will provide a simple and
inexpensive way for workers to save for retirement and employers to
offer an employee benefit:
§5-10E-2. Definitions.
Unless the context in which used clearly requires a different
definition, the following definitions in this section apply
throughout this article:
(1) "Director" means the Executive Secretary of the Public
Employees Retirement System;
(2) "Participating employee" means any worker in this state
who chooses to participate in the program; and
(3) "Participating employer" means any private employer, with
a place of business in this state with employees that choose to
participate in the program.
(4) "Program" means the voluntary accounts program created
under section three of this article;
§5-10E-3. Voluntary accounts program created.
(a) The voluntary accounts program is created. The director
may propose rules for legislative approval in accordance with the
provisions of article three, chapter twenty-nine-a of this code as
necessary to implement the provisions of this article. The
provisions of sections four and five of this article may not be
implemented until any approvals from federal agencies that may be
required, including a favorable tax treatment ruling of the plan,
have been granted, and appropriate funds for start-up costs of the
program have been identified and appropriated by the Legislature.
(b) Any start up funds appropriated by the Legislature shall
be reimbursed to the state from fees charged for the participation
of private employers and employees in the voluntary accounts
program.
(c) Private employers shall, in cooperation with the trustees
of the Consolidated Public Retirement Board, provide employees with
the opportunity to participate in the voluntary accounts program,
including payroll deductions for those employees who elect to
contribute to individual retirement accounts. Each participating
employer is authorized to contract with a participating employee to
defer or otherwise contribute a portion of that employee's
compensation, in accordance with the Internal Revenue Code or other
applicable federal laws.
§5-10E-4. Voluntary accounts program participant investments.
(a) Participating employees may self-direct the investment of their account balances through selection among investment options
to the extent provided in this section.
(b) The director may provide the individual retirement account
plans as the Consolidated Public Retirement Board determines to be
advisable. The Board of Treasury Investments, with respect to the
voluntary accounts program, shall invest the contributions of
participating employees, in accordance with federal law, and to the
extent permissible under federal law, in accordance with the
provisions of article six-c, chapter twelve of this code and
pursuant to investment policy established by the Board of Treasury
Investments for the voluntary accounts program. The Board of
Treasury Investments shall provide investment options for
participants to choose from, and may establish an investment plan
for participants who choose not to self-direct their investments.
(c) The director may also provide plans, including 401(k)
plans and savings incentive match plans for employees, individual
retirement account plans, that employers may elect to adopt for the
benefit of their employees. However, this article does not require
employers to provide plans for their employees. Those employers
that elect to adopt plans are responsible for complying with any
applicable federal and state laws, rules or regulations.
§5-10E-5. Principal account.
(a) The voluntary accounts program principal account is
created in the State Treasury and is administered in compliance with applicable federal law and as set forth in this section. The
Board of Treasury Investments shall make arrangements with
financial institutions to serve as trustees or custodians of the
voluntary accounts as may be required or advisable to comply with
applicable federal law and to provide for the efficient
implementation and administration of the program.
(b) The contributions elected by participating employees in
accordance with section four and this section of this article shall
be paid into the voluntary accounts program principal account and
shall be sufficient to cover costs of repayment of start up
funding, administration and staffing in addition to other amounts
as may be determined by the director. The account shall be used to
carry out the purposes of this chapter.
§5-10E-6. Accounts held in trust.
All moneys in the voluntary accounts program principal account
and the voluntary accounts program administrative account, all
property and rights purchased with the moneys, and all income
attributable to the moneys, shall be held in trust by the Board of
Treasury Investments for the exclusive benefit of the voluntary
accounts program participants and their beneficiaries, and,
notwithstanding any other provision of this or related articles,
shall be held separate from other types of funds to the extent
required by federal law. Neither the participating employee, nor
the participant's beneficiary or beneficiaries, nor any other designee, has any right to commute, sell, assign, transfer or
otherwise convey the right to receive any payments under the
program. These payments and rights are nonassignable and
nontransferable. Account balances are not subject to attachment,
garnishment, or execution and are not transferable by operation of
law in the event of bankruptcy or insolvency, except to the extent
otherwise required by law.
§5-10E-7. Authority, powers, duties and responsibilities of the
Board of Treasury Investments, director and
Consolidated Public Retirement Board.
(a) The Board of Treasury Investments has the full power to
invest moneys in the voluntary accounts program principal account
and the voluntary accounts program administrative account in
accordance with cumulative investment directions provided by this
article.
(b) All investment and operating costs of the Board of Treasury
Investments associated with the investment of the program assets
shall be paid to the state. With the exception of these expenses,
one hundred percent of all earnings from these investments shall
accrue directly to the voluntary accounts program principal
account.
(c) No state board, commission or agency or any officer,
employee or member is liable for any loss or deficiency resulting
from participant investments selected under this article.
(d) Neither the Board of Treasury Investments nor any officer,
employee, or member are liable for any loss or deficiency resulting
from reasonable efforts to implement investment directions under
the provisions of this article. The voluntary accounts program
administrative account is created in the State Treasury.
(e) All expenses of the Consolidated Public Retirement Board
pertaining to the voluntary accounts program including staffing and
administrative expenses shall be paid out of the voluntary accounts
program administrative account. Any excess balances credited to
this account over administrative expenses disbursed from this
account shall be transferred to the voluntary accounts program
principal account at the time and in the amounts as may be
determined by the director. Any deficiency in the voluntary
accounts program administrative account caused by an excess of
administrative expenses disbursed from this account shall be
transferred to this account from the voluntary accounts program
principal account.
(f) The director shall keep or cause to be kept full and
adequate accounts and records of the assets of each individual
participant, obligations, transactions and affairs of the program.
The Consolidated Public Retirement Board shall account for and
report on the investment of program assets or may enter into an
agreement with the Board of Treasury Investments for accounting and
reporting. The director's duties related to individual participant accounts include conducting the activities of trade
instruction, settlement activities and direction of cash movement
and related wire transfers with the custodian bank and outside
investment firms.
(g) The director has sole responsibility for contracting with
any record keepers for individual participant accounts and shall
manage the performance of record keepers under those contracts.
(h) The director's duties under this section do not limit the
authority of the Board of Treasury Investments to conduct its
responsibilities for asset management and balancing of program
funds.
(i) The Board of Treasury Investments has sole responsibility
for contracting with outside investment firms to provide investment
management for program funds and shall manage the performance of
investment managers under those contracts.
(j) The State Treasurer shall designate and define the terms
of engagement for the custodial banks.
(k) No member of the Board of Treasury Investments is liable
for the negligence, default or failure of any other person or other
member of the board to perform the duties of the member's office
and no member of the board may be considered or held to be an
insurer of the funds or assets of the voluntary accounts program,
nor is any nonvoting member liable for actions performed with the
exercise of reasonable diligence within the scope of the member's authorized activities as a member of the board.
NOTE: The purpose of this bill is to provide every worker in
the state with access to a voluntary retirement savings account
through the state.
This article is new, therefore, strike throughs and
underscoring have been omitted.