H. B. 2600
(By Delegates Browning & Kiss)
(Introduced February 21, 1995; 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
generally to teacher's retirement systems; providing for re-
entry into the defined benefit plan; and authorizing
additional voluntary contributions to the teacher's defined
benefit contribution retirement system.
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 ten 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withdrawn his or her contributions from the existing retirement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.
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 and employer on or
after the first day of July, one thousand nine hundred ninety-
one, who had five or more years credited service may elect
readmission to the existing retirement system in which he or she
was originally a member: Provided, That any employee reemployed
between the first day of July one thousand nine hundred ninety-
one and the effective date of this section and required to
participate in the teacher defined contribution system may elect
readmission to the existing retirement system in which he or she
was originally a member and 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
teacher defined contribution system and transfer all
contributions from the teacher defined contribution system to the
existing system.
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.
§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. At the employee's option
each employee who is a member of the defined contribution system
may make additional voluntary contributions up to the legal limit
permitted under the United States Internal Revenue Code.
Provided: That the employee must notify their employer no later
than the first day of July of each year, of their election for
additional employee voluntary contribution and such election may
not be revoked or changed until the first day of July of the
following year. 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.
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.
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 teacher's retirement system to return to
the original retirement system upon reemployment and to allow
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.