Introduced Version
House Bill 3083 History
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Key: Green = existing Code. Red = new code to be enacted
H. B. 3083
(By Delegates E. Nelson, Storch, Walters,
D. Evans, Andes, Ellington and Shott)
[Introduced March 25, 2013; referred to the
Committee on Pensions and Retirement then Finance.]
A BILL to amend and reenact §5-10-2 of the Code of West Virginia,
1931, as amended, relating to definitions used in the Public
Employees Retirement System; redefining the term final average
salary for new enrollees to the average salary received in the
highest ten years of service, rather than the current three.
Be it enacted by the Legislature of West Virginia:
That §5-10-2 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 10. WEST VIRGINIA PUBLIC EMPLOYEES RETIREMENT ACT.
§5-10-2. Definitions.
Unless a different meaning is clearly indicated by the
context, the following words and phrases as used in this article,
have the following meanings:
(1) "Accumulated contributions" means the sum of all amounts
deducted from the compensations of a member and credited to his or
her individual account in the members' deposit fund, together with regular interest on the contributions;
(2) "Accumulated net benefit" means the aggregate amount of
all benefits paid to or on behalf of a retired member;
(3) "Actuarial equivalent" means a benefit of equal value
computed upon the basis of a mortality table and regular interest
adopted by the board of trustees from time to time: Provided, That
when used in the context of compliance with the federal maximum
benefit requirements of Section 415 of the Internal Revenue Code,
"actuarial equivalent" shall be computed using the mortality tables
and interest rates required to comply with those requirements;
(4) "Annuity" means an annual amount payable by the retirement
system throughout the life of a person. All annuities shall be paid
in equal monthly installments, rounding to the upper cent for any
fraction of a cent;
(5) "Annuity reserve" means the present value of all payments
to be made to a retirant or beneficiary of a retirant on account of
any annuity, computed upon the basis of mortality and other tables
of experience, and regular interest, adopted by the board of
trustees from time to time;
(6) "Beneficiary" means any person, except a retirant, who is
entitled to, or will be entitled to, an annuity or other benefit
payable by the retirement system;
(7) "Board of Trustees" or "board" means the board of Trustees
of the West Virginia Consolidated Public Retirement System;
(8) "Compensation" means the remuneration paid a member by a
participating public employer for personal services rendered by the
member to the participating public employer. In the event a
member's remuneration is not all paid in money, his or her
participating public employer shall fix the value of the portion of
the remuneration which is not paid in money. Any lump sum or other
payments paid to members that do not constitute regular salary or
wage payments are not considered compensation for the purpose of
withholding contributions for the system or for the purpose of
calculating a member's final average salary. These payments
include, but are not limited to, attendance or performance bonuses,
one-time flat fee or lump sum payments, payments paid as a result
of excess budget, or employee recognition payments. The board
shall have final power to decide whether the payments shall be
considered compensation for purposes of this article;
(9) "Contributing service" means service rendered by a member
within this state and for which the member made contributions to a
public retirement system account of this state, to the extent
credited him or her as provided by this article;
(10) "Credited service" means the sum of a member's prior
service credit, military service credit, workers' compensation
service credit and contributing service credit standing to his or
her credit as provided in this article;
(11) "Employee" means any person who serves regularly as an officer or employee, full time, on a salary basis, whose tenure is
not restricted as to temporary or provisional appointment, in the
service of, and whose compensation is payable, in whole or in part,
by any political subdivision, or an officer or employee whose
compensation is calculated on a daily basis and paid monthly or on
completion of assignment, including technicians and other personnel
employed by the West Virginia National Guard whose compensation, in
whole or in part, is paid by the federal government: Provided, That
an employee of the Legislature whose term of employment is
otherwise classified as temporary and who is employed to perform
services required by the Legislature for its regular sessions or
during the interim between regular sessions and who has been or is
employed during regular sessions or during the interim between
regular sessions in seven or more consecutive calendar years, as
certified by the clerk of the house in which the employee served,
is an employee, any provision to the contrary in this article
notwithstanding, and is entitled to credited service in accordance
with provisions of section fourteen, article ten, chapter five of
this code and: Provided, however, That members of the legislative
body of any political subdivision and judges of the state Court of
Claims are employees receiving one year of service credit for each
one-year term served and pro rated service credit for any partial
term served, anything contained in this article to the contrary
notwithstanding. In any case of doubt as to who is an employee within the meaning of this article, the board of trustees shall
decide the question;
(12) "Employer error" means an omission, misrepresentation, or
violation of relevant provisions of the West Virginia Code or of
the West Virginia Code of State Regulations or the relevant
provisions of both the West Virginia Code and of the West Virginia
Code of State Regulations by the participating public employer that
has resulted in an underpayment or overpayment of contributions
required. A deliberate act contrary to the provisions of this
section by a participating public employer does not constitute
employer error.
(13) "Final average salary" means either of the following:
Provided, That salaries for determining benefits during any
determination period may not exceed the maximum compensation
allowed as adjusted for cost of living in accordance with section
seven, article ten-d, chapter five of this code and Section
401(a)(17) of the Internal Revenue Code: Provided, however, That
the provisions of section twenty-two-h of this article are not
applicable to the amendments made to this subdivision during the
2011 Regular Session of the Legislature.
(A) The average of the highest annual compensation received by
a member (including a member of the Legislature who participates in
the retirement system in the year 1971 or thereafter), during any
period of three consecutive years of credited service contained within the member's fifteen years of credited service immediately
preceding the date his or her employment with a participating
public employer last terminated: Provided, That for new members
whose date of first employment is after July 1, 2013, the final
average salary means the average of the highest annual compensation
received by a member (including a member of the Legislature who
participates in the retirement system in the year 1971 or
thereafter), during any period of ten consecutive years of credited
service contained within the member's fifteen years of credited
service immediately preceding the date his or her employment with
a participating public employer last terminated; or
(B) If the member has less than five years of credited
service, the average of the annual rate of compensation received by
the member during his or her total years of credited service; and
in determining the annual compensation, under either paragraph (A)
or (B) of this subdivision, of a member of the Legislature who
participates in the retirement system as a member of the
Legislature in the year 1971, or in any year thereafter, his or her
actual legislative compensation (the total of all compensation paid
under sections two, three, four and five, article two-a, chapter
four of this code), in the year 1971, or in any year thereafter,
plus any other compensation he or she receives in any year from any
other participating public employer including the State of West
Virginia, without any multiple in excess of one times his or her actual legislative compensation and other compensation, shall be
used: Provided, That "final average salary" for any former member
of the Legislature or for any member of the Legislature in the year
1971, who, in either event, was a member of the Legislature on
November 30, 1968, or November 30, 1969, or November 30, 1970, or
on November 30 in any one or more of those three years and who
participated in the retirement system as a member of the
Legislature in any one or more of those years means: (i) Either
(notwithstanding the provisions of this subdivision preceding this
proviso) $1,500 multiplied by eight, plus the highest other
compensation the former member or member received in any one of the
three years from any other participating public employer including
the State of West Virginia; or (ii) "final average salary"
determined in accordance with paragraph (A) or (B) of this
subdivision, whichever computation produces the higher final
average salary (and in determining the annual compensation under
subparagraph (ii) of this proviso, the legislative compensation of
the former member shall be computed on the basis of $1,500
multiplied by eight, and the legislative compensation of the member
shall be computed on the basis set forth in the provisions of this
subdivision immediately preceding this proviso or on the basis of
$1,500 multiplied by eight, whichever computation as to the member
produces the higher annual compensation);
(14) "Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended, codified at Title 26 of the United States
Code;
(15) "Limited credited service" means service by employees of
the West Virginia Educational Broadcasting Authority, in the
employment of West Virginia University, during a period when the
employee made contributions to another retirement system, as
required by West Virginia University, and did not make
contributions to the Public Employees Retirement System: Provided,
That while limited credited service can be used for the formula set
forth in subsection (e), section twenty-one of this article, it may
not be used to increase benefits calculated under section twenty-
two of this article;
(16) "Member" means any person who has accumulated
contributions standing to his or her credit in the members' deposit
fund;
(17) "Participating public employer" means the State of West
Virginia, any board, commission, department, institution or
spending unit, and includes any agency created by rule of the
Supreme Court of Appeals having full-time employees, which for the
purposes of this article is considered a department of state
government; and any political subdivision in the state which has
elected to cover its employees, as defined in this article, under the West Virginia Public Employees Retirement System;
(18) "Plan year" means the same as referenced in section
forty-two of this article;
(19) "Political subdivision" means the State of West Virginia,
a county, city or town in the state; a school corporation or
corporate unit; any separate corporation or instrumentality
established by one or more counties, cities or towns, as permitted
by law; any corporation or instrumentality supported in most part
by counties, cities or towns; and any public corporation charged by
law with the performance of a governmental function and whose
jurisdiction is coextensive with one or more counties, cities or
towns: Provided, That any mental health agency participating in
the Public Employees Retirement System before July 1, 1997, is
considered a political subdivision solely for the purpose of
permitting those employees who are members of the Public Employees
Retirement System to remain members and continue to participate in
the retirement system at their option after July 1, 1997:
Provided, however, That the Regional Community Policing Institute
which participated in the Public Employees Retirement System before
July 1, 2000, is considered a political subdivision solely for the
purpose of permitting those employees who are members of the Public
Employees Retirement System to remain members and continue to
participate in the Public Employees Retirement System after July 1, 2000;
(20) "Prior service" means service rendered prior to July 1,
1961, to the extent credited a member as provided in this article;
(21) "Regular interest" means the rate or rates of interest
per annum, compounded annually, as the board of trustees adopts
from time to time;
(22) "Required beginning date" means April 1 of the calendar
year following the later of: (A) The calendar year in which the
member attains age seventy and one-half years of age; or (B) the
calendar year in which a member who has attained the age seventy
and one-half years of age and who ceases providing service covered
under this system to a participating employer;
(23) "Retirant" means any member who commences an annuity
payable by the retirement system;
(24) "Retirement" means a member's withdrawal from the employ
of a participating public employer and the commencement of an
annuity by the retirement system;
(25) "Retirement system" or "system" means the West Virginia
Public Employees Retirement System created and established by this
article;
(26) "Retroactive service" means: (1) Service between July 1,
1961, and the date an employer decides to become a participating
member of the Public Employees Retirement System; (2) service prior to July 1, 1961, for which the employee is not entitled to prior
service at no cost in accordance with 162 CSR 5.13; and (3) service
of any member of a legislative body or employees of the State
Legislature whose term of employment is otherwise classified as
temporary for which the employee is eligible, but for which the
employee did not elect to participate at that time;
(27) "Service" means personal service rendered to a
participating public employer by an employee of a participating
public employer; and
(28) "State" means the State of West Virginia.
NOTE: The purpose of this bill is to redefine the term final
average salary for new enrollees to be the average salary received
in the highest ten years of service, rather than the current three.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.