Introduced Version
Senate Bill 406 History
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Committee Substitute (1)
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Senate Bill No. 406
(By Senators Jenkins, McCabe and Cann )
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[Introduced March 1, 2013; referred to the Committee on Pensions;
and then to the Committee on Finance .]
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A BILL to amend and reenact §7-14D-2, §7-14D-7, §7-14D-9, §7-14D-16
and §7-14D-19 of the Code of West Virginia, 1931, as amended;
and to amend said code by adding thereto a new section,
designated §7-14D-7a, all relating to the Deputy Sheriff
Retirement System Act; modifying the definition of "member" in
said article; adding a definition for the terms "retire" and
"retirement" to said article; correction of errors; clarifying
that an estimation of benefits is provided prior to the
submission of a retirement application from a member; and
making technical corrections.
Be it enacted by the Legislature of West Virginia:
That §7-14D-2, §7-14D-7, §7-14D-9, §7-14D-16 and §7-14D-19 of
the Code of West Virginia, 1931, as amended, be amended and
reenacted; and that said code be amended by adding thereto a new section, designated §7-14D-7a, all to read as follows:
ARTICLE 14D. DEPUTY SHERIFF RETIREMENT SYSTEM ACT.
§7-14D-2. Definitions.
As used in this article, unless a federal law or regulation or
the context clearly requires a different meaning:
(a) "Accrued benefit" means on behalf of any member two and
one-quarter percent of the member's final average salary multiplied
by the member's years of credited service. A member's accrued
benefit may not exceed the limits of Section 415 of the Internal
Revenue Code and is subject to the provisions of section nine-a of
this article.
(b) "Accumulated contributions" means the sum of all amounts
deducted from the compensation of a member, or paid on his or her
behalf pursuant to article ten-c, chapter five of this code, either
pursuant to section seven of this article or section twenty-nine,
article ten, chapter five of this code as a result of covered
employment together with regular interest on the deducted amounts.
(c) "Active member" means a member who is active and
contributing to the plan.
(d) "Active military duty" means full-time active duty with
any branch of the armed forces of the United States, including
service with the National Guard or reserve military forces when the
member has been called to active full-time duty and has received no compensation during the period of that duty from any board or
employer other than the armed forces.
(e) "Actuarial equivalent" means a benefit of equal value
computed upon the basis of the mortality table and interest rates
as set and adopted by the retirement board in accordance with the
provisions of this article: Provided, That when used in the context
of compliance with the federal maximum benefit requirements of
Section 415 of the Internal Revenue Code, "actuarial equivalent"
shall be computed using the mortality tables and interest rates
required to comply with those requirements.
(f) "Annual compensation" means the wages paid to the member
during covered employment within the meaning of Section 3401(a) of
the Internal Revenue Code, but determined without regard to any
rules that limit the remuneration included in wages based upon the
nature or location of employment or services performed during the
plan year plus amounts excluded under Section 414(h)(2) of the
Internal Revenue Code and less reimbursements or other expense
allowances, cash or noncash fringe benefits or both, deferred
compensation and welfare benefits. Annual compensation for
determining benefits during any determination period may not exceed
the maximum compensation allowed as adjusted for cost of living in
accordance with section seven, article ten-d, chapter five of this
code and Section 401(a)(17) of the Internal Revenue Code.
(g) "Annual leave service" means accrued annual leave.
(h) "Annuity starting date" means the first day of the first
calendar month following receipt of the retirement application by
the board or the required beginning date, if earlier: Provided,
That the member has ceased covered employment and reached early or
normal retirement age.
(i) "Base salary" means a member's cash compensation exclusive
of overtime from covered employment during the last twelve months
of employment. Until a member has worked twelve months, annualized
base salary is used as base salary.
(j) "Board" means the Consolidated Public Retirement Board
created pursuant to article ten-d, chapter five of this code.
(k) "County commission" has the meaning ascribed to it in
section one, article one, chapter seven of this code.
(l) "Covered employment" means either: (1) Employment as a
deputy sheriff and the active performance of the duties required of
a deputy sheriff; or (2) the period of time which active duties are
not performed but disability benefits are received under section
fourteen or fifteen of this article; or (3) concurrent employment
by a deputy sheriff in a job or jobs in addition to his or her
employment as a deputy sheriff where the secondary employment
requires the deputy sheriff to be a member of another retirement
system which is administered by the Consolidated Public Retirement Board pursuant to article ten-d, chapter five of this code:
Provided, That the deputy sheriff contributes to the fund created
in section six of this article the amount specified as the deputy
sheriff's contribution in section seven of this article.
(m) "Credited service" means the sum of a member's years of
service, active military duty, disability service and annual leave
service.
(n) "Deputy sheriff" means an individual employed as a county
law-enforcement deputy sheriff in this state and as defined by
section two, article fourteen of this chapter.
(o) "Dependent child" means either:
(1) An unmarried person under age eighteen who is:
(A) A natural child of the member;
(B) A legally adopted child of the member;
(C) A child who at the time of the member's death was living
with the member while the member was an adopting parent during any
period of probation; or
(D) A stepchild of the member residing in the member's
household at the time of the member's death; or
(2) Any unmarried child under age twenty-three:
(A) Who is enrolled as a full-time student in an accredited
college or university;
(B) Who was claimed as a dependent by the member for federal income tax purposes at the time of the member's death; and
(C) Whose relationship with the member is described in
subparagraph (A), (B) or (C), paragraph (1) of this subdivision.
(p) "Dependent parent" means the father or mother of the
member who was claimed as a dependent by the member for federal
income tax purposes at the time of the member's death.
(q) "Disability service" means service credit received by a
member, expressed in whole years, fractions thereof or both, equal
to one half of the whole years, fractions thereof or both, during
which time a member receives disability benefits under section
fourteen or fifteen of this article.
(r) "Early retirement age" means age forty or over and
completion of twenty years of service.
(s) "Employer error" means an omission, misrepresentation, or
violation of relevant provisions of the West Virginia Code or of
the West Virginia Code of State Regulations or the relevant
provisions of both the West Virginia Code and of the West Virginia
Code of State Regulations by the participating public employer that
has resulted in an underpayment or overpayment of contributions
required. A deliberate act contrary to the provisions of this
section by a participating public employer does not constitute
employer error.
(t) "Effective date" means July 1, 1998.
(u) "Final average salary" means the average of the highest
annual compensation received for covered employment by the member
during any five consecutive plan years within the member's last ten
years of service. If the member did not have annual compensation
for the five full plan years preceding the member's attainment of
normal retirement age and during that period the member received
disability benefits under section fourteen or fifteen of this
article then "final average salary" means the average of the
monthly salary determined paid to the member during that period as
determined under section seventeen of this article multiplied by
twelve.
(v) "Fund" means the West Virginia Deputy Sheriff Retirement
Fund created pursuant to section six of this article.
(w) "Hour of service" means:
(1) Each hour for which a member is paid or entitled to
payment for covered employment during which time active duties are
performed. These hours shall be credited to the member for the plan
year in which the duties are performed; and
(2) Each hour for which a member is paid or entitled to
payment for covered employment during a plan year but where no
duties are performed due to vacation, holiday, illness, incapacity
including disability, layoff, jury duty, military duty, leave of
absence or any combination thereof and without regard to whether the employment relationship has terminated. Hours under this
paragraph shall be calculated and credited pursuant to West
Virginia Division of Labor rules. A member will not be credited
with any hours of service for any period of time he or she is
receiving benefits under section fourteen or fifteen of this
article; and
(3) Each hour for which back pay is either awarded or agreed
to be paid by the employing county commission, irrespective of
mitigation of damages. The same hours of service shall not be
credited both under this paragraph and paragraph (1) or (2) of this
subdivision. Hours under this paragraph shall be credited to the
member for the plan year or years to which the award or agreement
pertains rather than the plan year in which the award, agreement or
payment is made.
(x) "Member" means a person first hired as a deputy sheriff
after the effective date of this article, as defined in subsection
(r) (t) of this section, or a deputy sheriff first hired prior to
the effective date and who elects to become a member pursuant to
section five or seventeen of this article. A member shall remain a
member until the benefits to which he or she is entitled under this
article are paid or forfeited or until cessation of membership
pursuant to section five of this article.
(y) "Monthly salary" means the portion of a member's annual compensation which is paid to him or her per month.
(z) "Normal form" means a monthly annuity which is one twelfth
of the amount of the member's accrued benefit which is payable for
the member's life. If the member dies before the sum of the
payments he or she receives equals his or her accumulated
contributions on the annuity starting date, the named beneficiary
shall receive in one lump sum the difference between the
accumulated contributions at the annuity starting date and the
total of the retirement income payments made to the member.
(aa) "Normal retirement age" means the first to occur of the
following: (1) Attainment of age fifty years and the completion of
twenty or more years of service; (2) while still in covered
employment, attainment of at least age fifty years and when the sum
of current age plus years of service equals or exceeds seventy
years; (3) while still in covered employment, attainment of at
least age sixty years and completion of five years of service; or
(4) attainment of age sixty-two years and completion of five or
more years of service.
(bb) "Partially disabled" means a member's inability to engage
in the duties of deputy sheriff by reason of any medically
determinable physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for
a continuous period of not less than twelve months. A member may be determined partially disabled for the purposes of this article and
maintain the ability to engage in other gainful employment which
exists within the state but which ability would not enable him or
her to earn an amount at least equal to two thirds of the average
annual compensation earned by all active members of this plan
during the plan year ending as of the most recent June 30, as of
which plan data has been assembled and used for the actuarial
valuation of the plan.
(cc) "Public Employees Retirement System" means the West
Virginia Public Employees Retirement System created by article ten,
chapter five of this code.
(dd) "Plan" means the West Virginia Deputy Sheriff Death,
Disability and Retirement Plan established by this article.
(ee) "Plan year" means the twelve-month period commencing on
July 1 of any designated year and ending the following June 30.
(ff) "Qualified public safety employee" means any employee of
a participating state or political subdivision who provides police
protection, fire-fighting services or emergency medical services
for any area within the jurisdiction of the state or political
subdivision, or such other meaning given to the term by Section
72(t)(10)(B) of the Internal Revenue Code or by Treasury Regulation
§1.401(a)-1(b)(2)(v) as they may be amended from time to time.
(gg) "Regular interest" means the rate or rates of interest per annum, compounded annually, as the board adopts in accordance
with the provisions of this article.
(hh) "Required beginning date" means April 1 of the calendar
year following the later of: (i) The calendar year in which the
member attains age seventy and one-half; or (ii) the calendar year
in which he or she retires or otherwise separates from covered
employment.
(ii) "Retire" or "retirement" means a member's withdrawal from
the employ of a participating public employer and the commencement
of an annuity by the plan.
____(ii) (jj) "Retirement income payments" means the annual
retirement income payments payable under the plan.
(jj) (kk) "Spouse" means the person to whom the member is
legally married on the annuity starting date.
(kk) (ll) "Surviving spouse" means the person to whom the
member was legally married at the time of the member's death and
who survived the member.
(ll) (mm) "Totally disabled" means a member's inability to
engage in substantial gainful activity by reason of any medically
determined physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for
a continuous period of not less than twelve months. For purposes of
this subdivision:
(1) A member is totally disabled only if his or her physical
or mental impairment or impairments are so severe that he or she is
not only unable to perform his or her previous work as a deputy
sheriff but also cannot, considering his or her age, education and
work experience, engage in any other kind of substantial gainful
employment which exists in the state regardless of whether: (A) The
work exists in the immediate area in which the member lives; (B) a
specific job vacancy exists; or (C) the member would be hired if he
or she applied for work.
(2) "Physical or mental impairment" is an impairment that
results from an anatomical, physiological or psychological
abnormality that is demonstrated by medically accepted clinical and
laboratory diagnostic techniques. A member's receipt of Social
Security disability benefits creates a rebuttable presumption that
the member is totally disabled for purposes of this plan.
Substantial gainful employment rebuts the presumption of total
disability.
(mm) (nn) "Year of service". -- A member shall, except in his
or her first and last years of covered employment, be credited with
year of service credit based upon the hours of service performed as
covered employment and credited to the member during the plan year
based upon the following schedule:
Hours of Service Years of Service Credited
Less than 500 0
500 to 999 1/3
1,000 to 1,499 2/3
1,500 or more 1
During a member's first and last years of covered employment,
the member shall be credited with one twelfth of a year of service
for each month during the plan year in which the member is credited
with an hour of service. A member is not entitled to credit for
years of service for any time period during which he or she
received disability payments under section fourteen or fifteen of
this article. Except as specifically excluded, years of service
include covered employment prior to the effective date. Years of
service which are credited to a member prior to his or her receipt
of accumulated contributions upon termination of employment
pursuant to section thirteen of this article or section thirty,
article ten, chapter five of this code, shall be disregarded for
all purposes under this plan unless the member repays the
accumulated contributions with interest pursuant to section
thirteen of this article or had prior to the effective date made
the repayment pursuant to section eighteen, article ten, chapter
five of this code.
§7-14D-7. Members' contributions; employer contributions.
(a) There shall be deducted from the monthly salary of each member and paid into the fund an amount equal to eight and one-half
percent of his or her monthly salary. An additional amount shall be
paid to the fund by the county commission of the county in which
the member is employed in covered employment in an amount
determined by the board: Provided, That in any year preceding July
1, 2011, the total of the contributions provided in this section,
to be paid by the county commission, may not exceed ten and one-
half percent of the total payroll for the members in the employ of
the county commission; Provided, however, That on or after July 1,
2011, the total of the contributions provided in this section, to
be paid by the county commission, may not exceed thirteen percent
of the total payroll for the members in the employ of the county
commission. If the board finds that the benefits provided by this
article can be actually funded with a lesser contribution, then the
board shall reduce the required member or employer contributions or
both. The sums withheld each calendar month shall be paid to the
fund no later than fifteen days following the end of the calendar
month.
(b) Any active member who has concurrent employment in an
additional job or jobs and the additional employment requires the
deputy sheriff to be a member of another retirement system which is
administered by the Consolidated Public Retirement Board pursuant
to article ten-d, chapter five of this code shall make an additional contribution to the fund of eight and one-half percent
of his or her monthly salary earned from any additional employment
which requires the deputy sheriff to be a member of another
retirement which is administered by the Consolidated Public
Retirement Board pursuant to article ten-d, chapter five of this
code. An additional amount shall be paid to the fund by the
concurrent employer for which the member is employed in an amount
determined by the board: Provided, That in any year preceding July
1, 2011, the total of the contributions provided in this section,
to be paid by the concurrent employer, may not exceed ten and one-
half percent of the monthly salary of the employee: Provided,
however, That on or after July 1, 2011, the total of the
contributions provided in this section, to be paid by the
concurrent employer, may not exceed thirteen percent of the monthly
salary of the employee. If the board finds that the benefits
provided by this article can be funded with a lesser contribution,
then the board shall reduce the required member or employer
contributions or both. The sums withheld each calendar month shall
be paid to the fund no later than fifteen days following the end of
the calendar month.
(c) If any change or employer error in the records of any
participating public employer or the retirement system results in
any member receiving from the system more or less than he or she would have been entitled to receive had the records been correct,
the board shall correct the error, and as far as is practicable
shall adjust the payment of the benefit in a manner that the
actuarial equivalent of the benefit to which the member was
correctly entitled shall be paid. Any employer error resulting in
an underpayment to the retirement system may be corrected by the
member remitting the required employee contribution and the
participating public employer remitting the required employer
contribution. Interest shall accumulate in accordance with the
retirement board reinstatement interest as established in
Legislative Rule 162 CSR 7 and any accumulating interest owed on
the employee and employer contributions resulting from the employer
error shall be the responsibility of the participating public
employer. The participating public employer may remit total payment
and the employee reimburse the participating public employer
through payroll deduction over a period equivalent to the time
period during which the employer error occurred.
§7-14D-7a. Correction of errors; underpayments; overpayments.
(a) General rule: If any change or employer error in the
records of any participating public employer or the plan results in
any member, retirant or beneficiary receiving from the plan more or
less than he or she would have been entitled to receive had the
records been correct, the board shall correct the error. If correction of the error occurs after the effective retirement date
of a retirant, and as far as is practicable, the board shall adjust
the payment of the benefit in a manner that the actuarial
equivalent of the benefit to which the retirant was correctly
entitled shall be paid.
(b) Underpayments: Any error resulting in an underpayment to
the retirement system of required contributions may be corrected by
the member or retirant remitting the required employee contribution
and the participating public employer remitting the required
employer contribution. Interest shall accumulate in accordance with
the Legislative Rule 162 CSR 7 concerning retirement board refund,
reinstatement, retroactive service, loan and employer error
interest factors and any accumulating interest owed on the employee
and employer contributions resulting from an employer error shall
be the responsibility of the participating public employer. The
participating public employer may remit total payment and the
employee reimburse the participating public employer through
payroll deduction over a period equivalent to the time period
during which the employer error occurred. If the correction of an
error involving an underpayment of required contributions to the
retirement system will result in increased payments to a retirant,
including increases to payments already made, any adjustments shall
be made only after the board receives full payment of all required employee and employer contributions, including interest.
(c) Overpayments: (1) When mistaken or excess employer
contributions, including any overpayments, have been made to the
retirement system by a participating public employer, due to error
or other reason, the board shall credit the participating public
employer with an amount equal to the erroneous contributions, to be
offset against the participating public employer's future liability
for employer contributions to the system. Earnings or interest
shall not be credited to the employer.
(2) When mistaken or excess employee contributions, including
any overpayments, have been made to the retirement system, due to
error or other reason, the board shall have sole authority for
determining the means of return, offset or credit to or for the
benefit of the employee of the amounts, and may use any means
authorized or permitted under the provisions of Section 401(a), et
seq. of the Internal Revenue Code and guidance issued thereunder
applicable to governmental plans. Alternatively, in its full and
complete discretion, the board may require the participating public
employer to pay the employee the amounts as wages, with the board
crediting the participating public employer with a corresponding
amount to offset against its future contributions to the plan:
Provided, That the wages paid to the employee shall not be
considered compensation for any purposes under this article. Earnings or interest shall not be returned, offset, or credited
under any of the means utilized by the board for returning mistaken
or excess employee contributions, including any overpayments, to an
employee.
§7-14D-9. Retirement; commencement of benefits.
A member may retire and commence to receive retirement income
payments on the first day of the calendar month following the
board's receipt of the member's voluntary written application for
retirement or the required beginning date, if earlier. Before
receiving retirement income payments, the member shall have ceased
covered employment and reached early or normal retirement age. The
retirement income payments shall be in an amount as provided under
section eleven of this article: Provided, That retirement income
payments under this plan shall be subject to the provisions of this
article. Upon receipt of the application a request for estimation
of benefits, the board shall promptly provide the member with an
explanation of his or her optional forms of retirement benefits and
upon the estimated gross monthly annuity. Upon receipt of properly
executed retirement application forms from the member, the board
shall process the member's request and commence payments as soon as
administratively feasible.
§7-14D-16. Awards and benefits for disability -- Physical
examinations; termination of disability.
(a) The board may require any member who has applied for or is
receiving disability benefits under this article to submit to a
physical examination, mental examination or both, by a physician or
physicians selected or approved by the board and may cause all
costs incident to the examination and approved by the board to be
paid from the fund. The costs may include hospital, laboratory, X
ray, medical and physicians' fees. A report of the findings of any
physician shall be submitted in writing to the board for its
consideration. If, from the report, independent information, or
from the report and any hearing on the report, the board is of the
opinion and finds that: (1) The member has become reemployed as a
law-enforcement officer; (2) two physicians who have examined the
member have found that considering the opportunities for law
enforcement in West Virginia, the member could be so employed as a
deputy sheriff; or (3) other facts exist to demonstrate that the
member is no longer totally disabled or partially disabled as the
case may be, then the disability benefits shall cease. If the
member was totally disabled and is found to have recovered, the
board shall determine whether the member continues to be partially
disabled. If the board finds that the member is no longer totally
disabled but is partially disabled, then the member shall continue
to receive partial disability benefits in accordance with this
article. Benefits shall cease once the member has been found to be no longer either totally or partially disabled: Provided, That the
board shall require recertification for each partial or total
disability at regular intervals as specified by the guidelines
adopted by the Public Employees Deputy Sheriff Retirement System.
(b) If a retirant refuses to submit to a medical examination
or submit a statement by his or her physician certifying continued
disability in any period, his or her disability annuity may be
discontinued by the board until the retirant complies. If the
refusal continues for one year, all the retirants rights in and to
the annuity may be revoked by the board.
§7-14D-19. Awards and benefits to surviving spouse -- When member
dies from nonservice-connected causes.
(a) In any case where a member who has been a member for at
least ten years, while in covered employment after the effective
date of this article, has died or dies from any cause other than
those specified in section eighteen of this article and not due to
vicious habits, intemperance or willful misconduct on his or her
part, the fund shall pay annually in equal monthly installments to
the surviving spouse during his or her lifetime, a sum equal to the
greater of: (i) One half of the annual compensation received in the
preceding twelve-month employment period by the deceased member; or
(ii) if the member dies after his or her early or normal retirement
age, the monthly amount which the spouse would have received had the member retired the day before his or her death, elected a one
hundred percent joint and survivor annuity with the spouse as the
joint annuitant, and then died. Where the member is receiving
disability benefits under section fourteen fifteen of this article
at the time of his or her death, the most recent monthly
compensation determined under section seventeen of this article
shall be substituted for the annual compensation in (i) of this
section.
(b) Benefits for a surviving spouse received under this
section, section twenty and section twenty-one of this article are
in lieu of receipt of any other benefits under this article for the
spouse or any other person or under the provisions of any other
state retirement system based upon the member's covered employment.
NOTE: The purpose of this bill is to modify the meaning of the
term "member", to add a definition for the terms "retire" and
"retirement", to delete provisions relating to correction of
errors, to clarify that an estimation of benefits is provided prior
to the submission of a retirement application from a member, and to
add a new section relating to correction of errors, and to make
technical corrections.
This bill was recommended for introduction and passage during
the 2013 Regular Session of the Legislature by the Consolidated
Public Retirement Board.
§7-14D-7a is new; therefore, underscoring and strike-throughs
have been omitted.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.