COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 28
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(By Senator Bowman)
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[Originating in the Committee on Pensions;
reported April 2, 1997.]
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A BILL to amend and reenact section thirty-five-b, article
seven-a, chapter eighteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
raising the earnings cap from two thousand five hundred
dollars to six thousand dollars per year for elected
officials receiving incentive retirement benefits.
Be it enacted by the Legislature of West Virginia:
That section thirty-five-b, article seven-a, 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 7A. STATE TEACHERS RETIREMENT SYSTEM.
§18-7A-35b. Temporary early retirement incentives program;
legislative declaration and finding of compelling
state interest and public purpose; specifying
eligible and ineligible members for incentives
program; options, conditions and exceptions;
certain positions abolished; special rule of
eighty; effective, termination and notice dates.
The Legislature hereby finds and declares that a compelling
state interest exists in providing a temporary, early retirement
incentives program for encouraging the early, voluntary
retirement of those public employees who were current, active,
contributing members of this retirement system on the first day
of April, one thousand nine hundred eighty-eight, in the
reduction of the number of such the employees and in reduction of
governmental costs therefor; that such the program constitutes a
public purpose; and that the special classifications and
differentiations provided in respect of such the program are
reasonable and equitable ones for the accomplishment of such the
purpose and program as enacted in Enrolled Committee Substitute for H. B. No. 4672, regular session, one thousand nine hundred
eighty-eight, and as clarified and supplemented herein,
retroactive to such the beginning date, aforesaid. The
Legislature further finds that maintaining an actuarily sound
retirement fund is essential and that the reemployment in any
manner, including reemployment on a contract basis, by the state
of any person who retires under this section is contrary to the
intent of the early retirement program and severely threatens the
fiscal integrity of the retirement fund.
(a) For the purposes of this section: (1) "Contract" means
any personal service agreement, not involving the sale of
commodities, that cannot be performed within sixty days or for
which the total compensation exceeds two thousand five hundred
dollars six thousand dollars in any twelve-month period. The
term "contract" does not include any agreement obtained by a
retirant through a bidding process and which is for the
furnishing of any commodity to a government agency; (2)
"governmental entity" means the state of West Virginia; a
constitutional branch or office of the state government, or any
subdivision thereof; a county, city or town in the state; a
county board of education; a separate corporation or
instrumentality established pursuant to a state statute; any
other entity currently permitted to participate in any state public retirement system or the public employees insurance
agency; or any officer or official of any entity listed above who
is acting in his or her official capacity; (3) "substitute
teacher" means a teacher, public school librarian, registered
professional nurse employed by the county board of education or
any other person employed for counselling or instructional
purposes in a public school in this state who is temporarily
fulfilling the duties of an existing real person employed in a
specific position who is temporarily absent from that specific
position; (4) "part-time elected or appointed office" means any
elected or appointed office that compensates its members in an
amount less than two thousand five hundred dollars or requires
less than sixty days of service in any twelve-month period.
(b) Beginning on the first day of April, one thousand nine
hundred eighty-eight, and continuing through the thirty-first day
of December, one thousand nine hundred eighty-eight (or as
extended by contract or by eligibility qualification requirement,
as hereinafter specified), eligible members, being those active,
contributing members actually and currently employed on such the
beginning date, retiring pursuant to this section (except
disability retirees, but including those so employed on said the
beginning date and leaving the system during the incentive period
and who are eligible for deferred benefits), may elect to participate in this incentive program and may elect any one of
the three following incentive options:
(1) Retirement incentive option one:
For the purpose of computing the member's annuity, the
normal final average salary shall be computed and one eighth
thereof shall be added thereto in arriving at the true final
average salary for use in actual computation of retirement
benefit.
(2) Retirement incentive option two:
A member may elect a lump sum payment, in addition to his or
her regular retirement annuity, equal to ten percent of his or
her final average salary not to exceed five thousand dollars, and
in the case of a deferred retirement electing this option, such
the lump sum payment shall be receivable and deferred to the time
of receipt of such the deferred retirement annuity.
(3) Retirement incentive option three:
A person shall be credited with an additional two years of
contributing service and an additional two years of age. The
years credited under this option shall in no way add to a
member's final average salary factor of computation.
(c) Eligible, active, contributing members, aforesaid,
employed under agreement and rendering services during school
year one thousand nine hundred eighty-eight--eighty-nine shall, if retiring pursuant to the provisions of this section and the
early retirement incentive program set forth herein, make
application for retirement, including choice of their respective
option, and give notice to their respective county boards of
education by the thirty-first day of December, one thousand nine
hundred eighty-eight, but shall be permitted to postpone actual
retirement until immediately after the close of such the
agreement period and said the school year; with proper credit to
be granted for such the extended period.
Also, eligible, active, contributing members employed, not
under agreement, who desire to retire under this section but who
are unable to retire by the thirty-first day of December, one
thousand nine hundred eighty-eight, because an element of
eligibility for retirement, such as age or other element, will
not be met until a date after the thirty-first day of December,
one thousand nine hundred eighty-eight, and before the first day
of July, one thousand nine hundred eighty-nine, shall be
permitted to postpone actual retirement until the date of
fulfilling such the element of eligibility and shall retire on
such the date, before the temporary retirement incentive program
ends on the thirtieth day of June, one thousand nine hundred
eighty-nine; with proper credit to be granted for such the
extended period: Provided, That members eligible under the preceding paragraph and this paragraph shall have made
application for retirement, including choice of their respective
option, and given notice to their respective employer by the
thirty-first day of December, one thousand nine hundred
eighty-eight, although postponing actual retirement, as
aforesaid: Provided, however, That an application for retirement
under the provisions of the preceding paragraph and this
paragraph shall be binding upon a member unless the member
provides the retirement system and the local board of education
or other educational agency with written notification of his or
her decision not to retire by the first day of April, one
thousand nine hundred eighty-nine: Provided further, That an
eligible member under this paragraph or the preceding paragraph
who has a grievance or court proceeding which is pending on the
passage date of this bill, shall be required to give final notice
of decision not to retire by the thirtieth day of June, one
thousand nine hundred eighty-nine: And provided further, That
the state teachers retirement board on or before the
twenty-fourth day of March, one thousand nine hundred
eighty-nine, shall provide calculations of anticipated retirement
benefits to those members who intend to retire pursuant to the
provisions of this section.
Eligible members, other than those covered under the provisions of the two preceding paragraphs, desiring to retire
under this incentive program shall make their option election
prior to and take their respective retirement by the close of the
thirty-first day of December, one thousand nine hundred
eighty-eight.
Any eligible member who retires hereunder during the school
year (after the first day of July, one thousand nine hundred
eighty-eight, and on any date prior to the thirtieth day of June,
one thousand nine hundred eighty-nine) shall have included such
months of such the school year and the salary in respect thereof,
if ones of higher salary, in place of and for any like number of
months in his or her five-year period for computation of
annuities as provided for in section twenty-six of this article.
(d) Any member participating in this retirement incentive
program is not eligible to accept further employment or accept,
directly or indirectly, work on a contract basis from a
governmental entity: Provided, That nothing in this section
shall effect any contract entered into prior to the effective
date of this section: Provided, however, That the executive
director may approve, upon written request for good cause shown,
an exception allowing a retirant to perform work on a contract
basis: Provided further, That a person may retire under this
section and thereafter serve in an elective office. And provided further, That he or she shall not receive an incentive option
under this section during the term of service in said office, but
shall receive his or her annuity calculated on regular basis, as
if originally taken not under this section but on such regular
basis. At the end of such term and cessation of service in such
office, such incentive option shall resume. In respect of an
appointive office, as distinguished from an elective office, any
person retiring under this section and thereafter serving in such
appointive office shall not receive an incentive option under
this section during the term of service in said office, but the
same shall be suspended during such period: And provided
further, That at the end of such term and cessation of service in
such appointive office the incentive option provided for under
this section shall be resumed: And provided further, That any
person elected or appointed to office by the state or any of its
political subdivisions who waives whatever salary, wage or per
diem compensation he or she may be entitled to by virtue of
service in such office and who does not receive any income
therefrom except such reimbursement of out-of-pocket costs and
expenses as may be permitted by the statutes governing such
office shall continue to receive an incentive option under this
section. Such The service shall may not be counted as
contributed or credited service for purposes of computing retirement benefits.
If such elected or appointed office is a part-time elected
or appointed office, a person electing retirement under this
section may serve in such elective or appointive office with no
loss of the benefits provided under this section.
Prior to the initiation or renewal of any contract entered
into pursuant to this section or the acceptance of any elective
or appointive office, a person who has elected to retire under
the early retirement provisions of this article shall complete a
disclosure and waiver statement executed under oath and
acknowledged by a notary public. The board shall promulgate
rules, pursuant to chapter twenty-nine-a of this code, regarding
the form and contents of the waiver and disclosure statement.
The disclosure and waiver statement shall be forwarded to the
appropriate state public retirement system administrator who
shall take action to ensure that the early retirement incentive
option benefit is reduced in accordance with the provisions of
this section. The administrator shall then certify such action
in writing to the appropriate governmental entity.
In any event, an eligible member may retire under this
section and thereafter continue to receive his or her incentive
annuity and be employed as a substitute teacher, as adjunct
faculty, as a school service personnel substitute, or as a part-time member of the faculty of Southern West Virginia
Community College or West Virginia Northern Community College:
Provided, That the board of directors determines that the
part-time employment is in accordance with policies to be adopted
by the board regarding adjunct faculty. For purposes of this
section, a "part-time member of the faculty" means an individual
employed solely to provide instruction for not more than twelve
college credits per semester.
Any such incentive retirants, under this section, may not
thereafter receive such an annuity and enter or reenter any
governmental retirement system established or authorized to be
established by the state, notwithstanding any provision of the
code to the contrary, unless required by constitutional
provision.
The additional annuity allowed for temporary early
retirement under these options is intended to be paid from the
retirement incentive account hereby created as a special account
in the state treasury and from the funds therein established with
moneys required to be applied or transferred by heads of spending
units from the unused portion of salary and fringe benefits in
their budgets accruing in respect to such the positions vacated
and subsequently canceled under this temporary early retirement
program. Salary and fringe benefit moneys actually saved in a particular fiscal year shall constitute the fund source. No such
additional annuity shall be disallowed even though initial
receipts may not be sufficient, with funds of the system to be
applied for such the purpose, as for the base annuity.
(e) The executive secretary of the retirement system shall
provide forms for applicants. Such The forms shall include a
detailed description of the incentive plan options.
The executive secretary of the retirement system shall file
a report to the Legislature no later than the fifteenth day of
February, one thousand nine hundred eighty-nine, and quarterly
thereafter, detailing the number of retirees who have elected to
accept early retirement incentive options, the dollar cost to
date by option selected, and the projected annual cost through
the year two thousand.
(f) Within every spending unit, department, board,
corporation, commission, or any other agency or entity wherein
two or multiples of two members elect to retire either under the
temporary early retirement incentives set forth above, or under
regular, voluntary retirement, and countable on an agency-wide or
entity-wide basis, no more than one of such the vacated positions
may be filled, with the second position being abolished upon the
effective day of the member's retirement: Provided, That county
boards of education in replacing employees leaving under this temporary early retirement incentive program shall be eligible to
replace in that number as authorized by the basic school aid
formula and pursuant to those guidelines in respect of number of
positions lost or projected to be lost due to declining
enrollment, changes in statutes, changes in state appropriations
and the other guidelines set forth and contained within said the
basic school aid formula. The vacant position abolishment
requirement shall may not apply to elective positions or
appointed public officers whose positions are established by
state constitutional or statutory provision. The retirant's
employing entity shall decide as to which of the vacated
positions made available through special early retirement or
through regular, voluntary retirement are to be abolished and the
head of such the spending unit shall immediately notify the state
auditor, the legislative auditor, and the commissioner of the
department of finance and administration of the decisions and
shall then apply and/or transfer, as aforesaid, the remaining
salary and fringe benefit appropriations: Provided, however,
That this vacant position abolishment provision shall may not
apply to any county position, other than those under the
authority of county boards of education, nor to any position or
positions, whether designated by spending unit, department,
agency, commission, entity or otherwise, which the governor may exempt or amend under such the abolishment provision upon his or
her recommendation that such the exemption or amendment is
necessary to preserve the health, welfare or safety of the people
of West Virginia, and with the prior concurrence of the joint
committee on government and finance in such the recommendation,
after the chairmen thereof shall cause such the committee to
meet.
(g) Special rule of eighty. -- Any active, contributing
member of the retirement system as of the first day of April, one
thousand nine hundred eighty-eight, who selects one of the
incentive options in this section, may retire under the special
early retirement provisions with full pension rights, without
reduction of benefits if the sum of such the member's age plus
years of contributing service equals or exceeds eighty:
Provided, That such the person has at least twenty years of
contributing service, up to two years of which may be military
service, or prior service, or already paid and credited
out-of-state service (if so paid and credited by the first day of
April, one thousand nine hundred eighty-eight) or any combination
thereof not exceeding an aggregate of two years.
(h) Termination of temporary retirement incentives program.
-- The right to elect, choose, select or use any of the options,
special rule of eighty, or other benefits set forth in this section shall terminate on the thirtieth day of June, one
thousand nine hundred eighty-nine.
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(NOTE: The purpose of this bill is to raise the earnings
cap from two thousand five hundred dollars to six thousand
dollars per year for elected officials receiving incentive
retirement benefits.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.)