H. B. 2642
(By Delegates Williams and Kiss)
[Introduced February 22, 1995; referred to the
Committee on Pensions and Retirement then Finance.]
A BILL to amend and reenact section seven and nine, article
seven-b, chapter eighteen, of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
reentry into the teacher retirement system; additional
voluntary contributions to the defined 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, 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she was originally a member so long as he or she has not withdrawn his or her contributions from the existing retirement
system: Provided further, That if such employee has withdrawn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. 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 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 sytstem 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 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.
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 of 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 the first day of July, one thousand
nine hundred ninety-one, 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.