Senate Bill No. 553
(By Senator Foster)
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[Introduced February 12, 2007; 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) "Program" means the voluntary accounts program created
under section three of this article;
(2) "Director" means the executive secretary of the Public
Employees Retirement System;
(3) "Participating employee" means any worker in this state
who chooses to participate in the program; and
(4) "Participating employer" means any private employer, with
a place of business in this state with employees that choose to
participate in the program.
§5-10E-3. Voluntary accounts program created.
The voluntary accounts program is hereby 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.
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.
Private employers shall, in cooperation with the trustees of
the Public Employees 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.
Participating employees may self-direct the investment of
their account balances through selection among investment options
to the extent provided in subsection three of this section.
The director may provide the individual retirement account
plans as the Public Employees 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 state 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.
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 act 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.
The voluntary accounts program principal account is created in
the State Treasury and shall be 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.
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 therewith, and all income
attributable thereto, 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 board of trustees of the Public Employees Retirement System.
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.
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.
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.
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.
All expenses of the board of trustees of the Public Employees
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.
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
trustees of the Public Employees 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.
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.
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.
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.
The State Treasurer shall designate and define the terns of
engagement for the custodial banks.
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 shall 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.