ENGROSSED

COMMITTEE SUBSTITUTE

FOR

Senate Bill No. 3010

(By Senators Tomblin, Mr. President, and Sprouse,

By Request of the Executive)

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[Originating in the Committee on Finance;

reported May 17, 2005.]

____________

A BILL to amend and reenact §51-9-1a, §51-9-4, §51-9-6, §51-9-6a, §51-9-6b and §51-9-7 of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto a new section, designated §51-9-6d, all relating generally to the judicial retirement system; increasing the contribution rate for judges and justices serving as of the first day of July, two thousand five, from nine percent to thirteen percent for judges and justices from the first day of July, two thousand five, until the thirtieth day of June, two thousand ten, consistent with the salary increase granted during the two thousand five regular legislative session; exempting circuit judges and Supreme Court Justices who have been eligible to retire with unreduced maximum retirement benefits on or after the first day of July, two thousand five, from further contributions to the retirement plan while continuing to serve; providing that judges and justices appointed or elected for the first time as judge of a court of record after the first day of July, two thousand five, who have not previously served as a judge of any court, must have served fourteen years as a sitting judge to receive annual retirement benefits; changing the annual benefit calculations and retirement qualifications for all judges and justices appointed or elected for the first time as judge of a court of record after the first day of July, two thousand five, with no prior service as a judge of a court of record; changing the annual benefit calculations for the spouses and children of all judges and justices appointed or elected for the first time as judge of a court of record after the first day of July, two thousand five, with no prior service as a judge of a court of record; providing that retired judges and justices may hold a public office or trust for compensation from the State of West Virginia; and providing that retired judges and justices are ineligible to participate in any other pension plan maintained by the State of West Virginia.
Be it enacted by the Legislature of West Virginia:
That §51-9-1a, §51-9-4, §51-9-6, §51-9-6a, §51-9-6b and §51-9-7 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 §51-9-6d, all to read as follows:
ARTICLE 9. RETIREMENT SYSTEM FOR JUDGES OF COURTS OF RECORD.
§51-9-1a. Definitions.
(a) As used in this article, the term "judge", "judge of any court of record" or "judge of any court of record of this state" means, refers to and includes judges of the several circuit courts and justices of the Supreme Court of Appeals. For purposes of this article, the terms do not mean, refer to or include family court judges.
(b) "Beneficiary" means any person, except a member, who is entitled to an annuity or other benefit payable by the retirement system.
(c) "Board" means the Consolidated Public Retirement Board created pursuant to article ten-d, chapter five of this code.
(d) "Final average salary" means the average of the highest thirty-six consecutive months' compensation received by the member as a judge of a court of record of this state.
(d) (e) "Internal Revenue Code" means the Internal Revenue Code of 1986, as it has been amended.
(e) (f) "Member" means a judge participating in this system.
(f) (g) "Plan year" means the twelve-month period commencing on the first day of July of any designated year and ending the following thirtieth day of June.
(g) (h) "Required beginning date" means the first day of April 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 the member retires or otherwise separates from covered employment.
(h) (i) "Retirement system" or "system" means the judges retirement system created and established by this article. Notwithstanding any other provision of law to the contrary, the provisions of this article are applicable only to circuit judges and justices of the Supreme Court of Appeals in the manner specified in this article. No service as a family court judge may be construed to qualify a person to participate in the judges retirement system or used in any manner as credit toward eligibility for retirement benefits under the judges retirement system.
§51-9-4. Required percentage contributions from salaries; any termination of required contributions prior to actual retirement disallowed; leased employees; military service credit; maximum allowable and qualified military service; qualifiable prosecutorial service.

(a) Every person who is now serving or shall hereafter serve as a judge of any court of record of this state shall pay into the judges' retirement fund six percent of the salary received by such person out of the State Treasury: Provided, That when a judge becomes eligible to receive benefits from such trust fund by actual retirement, no further payment by him or her shall be required, since such employee contribution, in an equal treatment sense, ceases to be required in the other retirement systems of the state, also, only after actual retirement: Provided, however, That on and after the first day of January, one thousand nine hundred ninety-five, every person who is then serving or shall thereafter serve as a judge of any court of record in this state shall pay into the judges' retirement fund nine percent of the salary received by that person: Provided further, That consistent with the salary increase granted to judges of courts of record during the two thousand five regular legislative session and to changes effectuated in judicial retirement by provisions enacted during the third extraordinary legislative session of two thousand five, on the first day of July, two thousand five, and continuing until the thirtieth day of June, two thousand ten, every person who is serving as a judge of any court of record in this state on the first day of July two thousand five, who is participating in the retirement plan established pursuant to the provisions of this article or who later opts to do so shall pay into the judges' retirement fund thirteen percent of the salary received by that person: And provided further, That effective the first day of July, two thousand ten, contributions of all judges of courts of record shall be nine percent: And provided further, That any circuit judge or Supreme Court Justice who, on or after the first day of July, two thousand five, who, due to age and years of service, is or becomes eligible to retire with unreduced maximum retirement benefits shall no longer be required to make the retirement contribution otherwise required by the provisions of this article. Any prior occurrence or practice to the contrary, in any way allowing discontinuance of required employee contributions prior to actual retirement under this retirement system, is rejected as erroneous and contrary to legislative intent and as violative of required equal treatment and is hereby nullified and discontinued fully, with the State Auditor to require such contribution in every instance hereafter, except where no contributions are required to be made under any of the provisions of this article.
(b) An individual who is a leased employee shall not be eligible to participate in the system. For purposes of this system, a "leased employee" means any individual who performs services as an independent contractor or pursuant to an agreement with an employee leasing organization or other similar organization. If a question arises regarding the status of an individual as a leased employee, the Board has the final power to decide the question.
(c) In drawing warrants for the salary checks of judges, the State Auditor shall deduct from the amount of each such salary check six percent thereof, which amount so deducted shall be credited by the Consolidated Public Retirement Board to the trust fund: Provided, That on or after the first day of January, one thousand nine hundred ninety-five, the amount so deducted and credited shall be nine percent of each such salary check: Provided, however, That consistent with the salary increase granted to judges of courts of record during the two thousand five regular legislative session and to changes effectuated in judicial retirement by provisions enacted during the third extraordinary legislative session of two thousand five, on and after the first day of July, two thousand five, and continuing until the thirtieth day of June, two thousand ten, every person who is serving as a judge of any court of record in this state on the first day of July, two thousand five, who is participating in the retirement plan established pursuant to the provisions of this article or who later opts to do so shall pay into the retirement fund authorized by the provisions of this article thirteen percent of each salary check: Provided further, That effective the first day of July, two thousand ten, contributions of all judges of courts of record shall be nine percent: And provided further, That any circuit judge or Supreme Court Justice who, on or after the first day of July, two thousand five, due to age and years of service, is or becomes eligible to retire with unreduced maximum retirement benefits shall no longer be required to make the retirement contribution otherwise required by the provisions of this article.
(d) Any judge seeking to qualify military service to be claimed as credited service, in allowable aggregate maximum amount up to five years, shall be entitled to be awarded the same without any required payment in respect thereof to the judges' retirement fund.
(e) Notwithstanding the preceding provisions of this section, contributions, benefits and service credit with respect to qualified military service shall be provided in accordance with Section 414(u) of the Internal Revenue Code. For purposes of this section, "qualified military service" has the same meaning as in Section 414(u) of the Internal Revenue Code. The Retirement Board is authorized to determine all questions and make all decisions relating to this section and may promulgate rules relating to contributions, benefits and service credit pursuant to the authority granted to the Retirement Board in section one, article ten-d, chapter five of this code to comply with Section 414(u) of the Internal Revenue Code.
(f) Any judge holding office as such on the effective date of the amendments to this article adopted by the Legislature at its regular session in the year one thousand nine hundred eighty-seven, who seeks to qualify service as a prosecuting attorney as credited service, which service credit must have been earned prior to the year one thousand nine hundred eighty-seven, shall be required to pay into the judges' retirement fund nine percent of the annual salary which was actually received by such person as prosecuting attorney during the time such prosecutorial service was rendered prior to the year one thousand nine hundred eighty-seven, and for which credited service is being sought, together with applicable interest. No judge whose term of office shall commence after the effective date of such amendments to this article shall be eligible to claim any credit for service rendered as a prosecuting attorney as eligible service for retirement benefits under this article, nor shall any time served as a prosecutor after the year one thousand nine hundred eighty-eight be considered as eligible service for any purposes of this article.
(g) The Legislature finds that any increase in salary for judges of courts of record directly affects the actuarial soundness of the retirement system for judges of courts of record and, therefore, an increase in the required percentage contributions of members of that retirement system is the same subject for purposes of determining the single object of this bill. §51-9-6. Eligibility for and payment of benefits.
(a) Except as otherwise provided in sections five, six-d, twelve and thirteen of this article, and subject to the provisions of subsection (e) of this section, any person who is now serving, or who shall hereafter serve, as a judge of any court of record of this state and shall have served as such judge for a period of not less than sixteen full years and shall have reached the age of sixty-five years, or who has served as judge of such court or of that court and other courts of record of the state for a period of sixteen full years or more (whether continuously or not and whether said service be entirely before or after this article became effective, or partly before and partly after said date, and whether or not said judge shall be in office on the date he or she shall become eligible to benefits hereunder) and shall have reached the age of sixty-five years, or who is now serving, or who shall hereafter serve, as a judge of any court of record of this state and shall have served as such judge for a period of not less than twenty-four full years, regardless of age, shall, upon a determination and certification of his or her eligibility as provided in section nine hereof, be paid from the fund annual retirement benefits, so long as he or she shall live, in an amount equal to seventy-five percent of the annual salary of the office from which he or she has retired based upon such salary of such office and as such salary may be changed from time to time during the period of his or her retirement and the amount of his or her retirement benefits shall be based upon and be equal to seventy-five percent of the highest annual salary of such office for any one calendar year during the period of his or her retirement and shall be payable in monthly installments: Provided, That such retirement benefits shall be paid only after such judge has resigned as such or, for any reason other than his or her impeachment, his or her service as such has ended: Provided, however, That every such person seeking to retire and to receive the annual retirement benefits provided by this subsection must have served a minimum of twelve years as a sitting judge of any such court of record: Provided further, That every individual who is appointed or elected for the first time as judge of a court of record of this state after the first day of July, two thousand five, who has not previously served as a judge of any court of record and who subsequently seeks to retire and to receive the annual retirement benefits provided by this subsection must have served a minimum of fourteen years as a sitting judge of any court of record of this state.
(b) Notwithstanding any other provisions of this article with the exception of sections twelve-a and twelve-b, any person who is now serving or who shall hereafter serve as a judge of any court of record of this state and who shall have accumulated sixteen years or more of credited service, at least twelve years of which is as a sitting judge of a court of record, and who has attained the age of sixty-two years or more but less than the age of sixty-five years, may elect to retire from his or her office and to receive the pension to which he or she would otherwise be entitled to receive at age sixty-five, but with an actuarial reduction of pension benefit to be established as a reduced annuity receivable throughout retirement: Provided, That every individual who is appointed or elected for the first time as judge of a court of record of this state after the first day of July, two thousand five, who has not previously served as a judge of any court of record and who subsequently seeks to retire and to receive the annual retirement benefits provided by this subsection must have served a minimum of fourteen years as a sitting judge of any court of record of this state. The reduced percentage (less than seventy-five percent) actuarially computed, determined and established at time of retirement in respect of this reduced pension benefit shall also continue and be applicable to any subsequent new annual salary set for the office from which such judge has retired and as such salary may be changed from time to time during the period of his or her retirement.
(c) In determining eligibility for the benefits provided by this section, active full-time duty (including leaves and furloughs) in the armed forces of the United States shall be eligible for qualification as credited military service for the purposes of this article by any judge with twelve or more years actual service as a sitting judge of a court of record, such awardable military service to not exceed five years: Provided, That in determining eligibility for the benefits provided by this section for every individual who is appointed or elected for the first time as judge of a court of record of this state after the first day of July, two thousand five, and who has not previously served as a judge of any court of record, active full-time duty (including leaves and furloughs) in the armed forces of the United States qualifies as credited service for the purposes of this article for any judge with fourteen or more years actual service as a sitting judge of a court of record, the awardable military service not to exceed five years.
(d) If a judge of a court of record who is presently sitting as such on the effective date of the amendments to this section enacted by the Legislature at its regular session held in the year one thousand nine hundred eighty-seven and who has served for a period of not less than twelve full years and has made payments into the judges' retirement fund as provided in this article for each month during which he or she served as judge, following the effective date of this section, any portion of time which he or she had served as prosecuting attorney in any county in this state shall qualify as years of service, if such judge shall pay those sums required to be paid pursuant to the provisions of section four of this article: Provided, That any term of office as prosecuting attorney, or part thereof, commencing after the thirty-first day of December, one thousand nine hundred eighty-eight, shall not hereafter in any way qualify as eligible years of service under this retirement system.
(e) Any retirement benefit accruing under the provisions of this section shall not be paid if otherwise barred under the provisions of article ten-a, chapter five of this code.
(f) Notwithstanding any other provisions of this article, forfeitures under the system shall not be applied to increase the benefits any member would otherwise receive under the system.
§51-9-6a. Eligibility benefits; service and retirement of judges over sixty-five years of age.

Any judge of a court of record of this state who shall have served for a period of not less than eight full years after attaining the age of sixty-five years and who shall have made payments into the judges' retirement fund as provided in this article for each month during which he or she served as such judge following the effective date of this section, shall be subject to all the applicable terms and provisions of this article, not inconsistent with the provisions hereof, and shall receive retirement benefits in an amount equal to seventy-five percent of the annual salary of the office from which he or she has retired based upon such salary of such office as such salary may be changed from time to time during the period of his or her retirement and the amount of his or her retirement benefits shall be based upon and be equal to seventy-five percent of the highest annual salary of such office for any one calendar year during the period of his or her retirement and shall be payable in monthly installments. If such judge shall become incapacitated to perform his or her said duties before the expiration of his or her said term and after serving for six years thereof, and upon the acceptance of his or her resignation as in this article provided, he or she shall be paid the annual retirement benefits as herein provided so long as he or she shall live. The provisions of this section shall prevail over any language to the contrary in this article contained, except those provisions of sections twelve-a and twelve-b of this article: Provided, That no individual who is appointed or elected for the first time as judge of a court of record of this state after the first day of July, two thousand five, and who has not previously served as a judge of any court of record is eligible for retirement under this subsection.
§51-9-6b. Annuities for surviving spouses and surviving dependent children of judges; automatic escalation and increase of annuity benefit; proration designation by judge permitted.

(a) There shall be paid, from the fund created or continued by section two of this article, or from such funds as may be appropriated by the Legislature for such purpose, an annuity to the surviving spouse of a judge, if such judge at the time of his or her death is eligible for the retirement benefits provided by any of the provisions of this article, or who has, at death, actually served five years or more as a sitting judge of any court of record of this state, exclusive of any other service credit to which such judge may otherwise be entitled, and who dies either while in office or after resignation or retirement from office pursuant to the provisions of this article. Said annuity shall amount to forty percent of the annual salary of the office which said judge held at his or her death or from which he or she resigned or retired. In the event said salary is increased or decreased while an annuitant is receiving the benefits hereunder, his or her annuity shall amount to forty percent of the new salary: Provided, That with respect to any individual who is appointed or elected for the first time as judge of a court of record of this state after the first day of July, two thousand five, and who has not previously served as a judge of any court of record, any annuity to the surviving spouse of the judge shall be an amount equal to forty percent of the judge's final average salary: Provided, however, That a surviving spouse of an individual first appointed or elected as a judge of a court of record after the first day of July, two thousand five, who has not previously served as a judge of any court of record, is not entitled to an increase in benefits by virtue of any increase in the salaries of the offices of circuit court judge or justice of the Supreme Court of Appeals. The annuity granted hereunder shall accrue monthly and shall be due and payable in monthly installments on the first business day of the month following the month for which the annuity shall have accrued. Such annuity shall commence on the first day of the month in which said judge dies and shall, subject to the provisions of subsection (b) of this section, terminate upon the death of the annuitant or shall terminate upon the remarriage of the annuitant.
(b) If there be no surviving spouse at the time of death of a judge who dies after serving five years or more as a sitting judge of any court of record and such judge leaves surviving him any dependent child or children such dependent child or children shall receive an amount equal to twenty percent of the annual salary of the office which said judge held at the time of his or her death: Provided, That the total of all such annuities payable to each such child shall not exceed in the aggregate an amount equal to forty percent of such salary. Such annuity shall continue as to each such child until: (i) He or she attains the age of eighteen years; or (ii) attains the age of twenty-three years so long as such child remains a full-time student. The Auditor shall by legislative rule establish the criteria for determining a person's status as a full-time student within the meaning and intent of this subsection. In the event there are surviving any such judge three or more dependent children, then each such child's annuity shall be proratably reduced in order that the aggregate annuity received by all such dependent children does not exceed forty percent of such salary and the amount to be so received by any such child shall continue throughout the entire period during which each such child is eligible to receive such annuity. The provisions of this subsection shall also apply to those circumstances and situations wherein a surviving spouse of a deceased judge shall die while receiving benefits pursuant to subsection (a) of this section and who shall leave surviving dependent children of such deceased judge who would be entitled to benefits under this subsection as if they had succeeded to such annuity benefits upon the death of such judge in the first instance. In the event the salary of judges is increased or decreased while an annuitant is receiving benefits pursuant to this subsection, the annuities payable shall be likewise increased or decreased proportionately to reflect such change in salary: Provided, That with respect to any individual who is appointed or elected for the first time as judge of a court of record of this state after the first day of July, two thousand five, and who has not previously served as a judge of any court of record, any annuity to any children of the judge shall be calculated with respect to the judge's final average salary: Provided, however, That a child of an individual first appointed or elected as a judge of a court of record on or after the first day of July, two thousand five, is not entitled to an increase in benefits by virtue of any increase in the salaries of the offices of circuit court judge or justice of the Supreme Court of Appeals. The annuities granted hereunder shall accrue monthly and shall be due and payable in monthly installments on the same day as surviving spouses benefits are required to be paid. Such annuities shall commence on the first day of the month in which any such dependent child becomes eligible for benefits hereunder and shall terminate on the last day of the month during which such eligibility ceases.
§51-9-6d. Adjusted annual retirement benefit calculations.
In calculating the annual retirement benefits under section six of this article for any individual who is appointed or elected for the first time as judge of a court of record of this state after the first day of July, two thousand five, who has not previously served as a judge of any court of record, the judge shall receive retirement benefits in an amount equal to seventy- five percent of the individual's final average salary. The individual is not entitled to an increase in benefits by virtue of any increase in the salaries of the offices of circuit court judge or justice of the Supreme Court of Appeals.
§51-9-7. Ineligibility to receive pay or benefits.
A judge who retires under the provisions of any section of this article and accepts the pay or benefits payable under this article shall, not may, while receiving said pay or benefits, be permitted to hold any public office or trust for which he or she receives compensation from the State of West Virginia. If, after retirement under the provisions of this article, a judge is elected or appointed to any public office or trust for which he or she receives any salary or other compensation from the State of West Virginia, his pay or benefits under this article shall be suspended for such time only as he shall occupy such office or trust the retired judge is not eligible to participate in any other pension plan maintained by the State of West Virginia, nor accrue additional years of credited service under this system or any other state pension system. A judge who retires because of disability and accepts the pay or benefits payable under this article because of his or her disability shall not, while receiving said pay or benefits because of his or her disability, be permitted to practice law. If, after disability retirement under the provisions of this article and while receiving pay or benefits payable under said article because of his or her disability, he or she shall enter the practice of law, his or her pay or benefits under this article because of his or her disability shall be suspended for such time only as he or she shall be engaged in the practice of law.