Senate Bill No. 545
(By Senator Green)
[Introduced February 8, 2012; referred to the Committee on Pensions; and then to the Committee on Finance.]
A Bill to amend and reenact §5-10-48 of the Code of West Virginia, 1931, as amended, relating to reemployment after retirement from the Public Employees Retirement System.
Be it enacted by the Legislature of West Virginia:
That §5-10-48 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.
§5-10-48. Reemployment after retirement; options for holder of elected public office.
(a) The Legislature finds that a compelling state interest exists in maintaining an actuarially sound retirement system and that this interest necessitates that certain limitations be placed upon an individual's ability to retire from the system and to then later return to state employment as an employee with a participating public employer while contemporaneously drawing an annuity from the system. The Legislature hereby further finds and declares that the interests of the public are served when persons having retired from public employment are permitted, within certain limitations, to render post-retirement employment in positions of public service, either in elected or appointed capacities. The Legislature further finds and declares that it has the need for qualified employees and that in many cases an employee of the Legislature will retire and be available to return to work for the Legislature as a per diem employee. The Legislature further finds and declares that in many instances these employees have particularly valuable expertise which the Legislature cannot find elsewhere. The Legislature further finds and declares that reemploying these persons on a limited per diem basis after they have retired is not only in the best interests of this state, but has no adverse effect whatsoever upon the actuarial soundness of this particular retirement system.
(b) For the purposes of this section: (1) Regularly employed on a full-time basis means employment of an individual by a participating public employer, in a position other than as an elected or appointed public official, which normally requires twelve months per year service and at least one thousand forty hours of service per year in that position; (2) temporary full-time employment or temporary part-time employment means employment of an individual on a temporary or provisional basis by a participating public employer, other than as an elected or appointed public official, in a position which does not otherwise render the individual as regularly employed; (3) former employee of the Legislature means any person who has retired from employment with the Legislature and who has at least ten years' contributing service with the Legislature; and (4) reemployed by the Legislature means a former employee of the Legislature who has been reemployed on a per diem basis not to exceed one hundred seventy-five days per calendar year.
(c) In the event a retirant becomes regularly employed on a full-time basis by a participating public employer, payment of his or her annuity shall be suspended during the period of his or her reemployment and he or she shall become a contributing member to the retirement system. If his or her reemployment is for a period of one year or longer, his or her annuity shall be recalculated and he or she shall be granted an increased annuity due to the additional employment, the annuity to be computed according to section twenty-two of this article. A retirant may accept temporary full-time or temporary part-time employment from a participating employer without suspending his or her retirement annuity so long as he or she does not receive annual compensation in excess of $15,000: Provided, That a retirant may be employed by the Legislature on a per diem basis without suspension of the retirement annuity if the retirant's annual compensation from the Legislature does not exceed $20,000.
(d) In the event a member retires and is then subsequently elected to a public office or is subsequently appointed to hold an elected public office, or is a former employee of the Legislature who has been reemployed by the Legislature, he or she has the option, notwithstanding subsection (c) of this section, to either:
(1) Continue to receive payment of his or her annuity while holding public office or during any reemployment of a former employee of the Legislature on a per diem basis, in addition to the salary he or she may be entitled to as an office holder or as a per diem reemployed former employee of the Legislature; or
(2) Suspend the payment of his or her annuity and become a contributing member of the retirement system as provided in subsection (c) of this section. Notwithstanding the provisions of this subsection, a member who is participating in the system as an elected public official may not retire from his or her elected position and commence to receive an annuity from the system and then be elected or reappointed to the same position unless and until a continuous twelve-month period has passed since his or her retirement from the position: Provided, That a former employee of the Legislature may not be reemployed by the Legislature on a per diem basis until at least sixty days after the employee has retired: Provided, however, That the limitation on compensation provided by subsection (c) of this section does not apply to the reemployed former employee: Provided further, That in no event may reemployment by the Legislature of a per diem employee exceed one hundred seventy-five days per calendar year.
(e) A member who is participating in the system simultaneously as both a regular, full-time employee of a participating public employer and as an elected or appointed member of the legislative body of the state or any political subdivision may, upon meeting the age and service requirements of this article, elect to retire from his or her regular full-time state employment and may commence to receive an annuity from the system without terminating his or her position as a member of the legislative body of the state or political subdivision: Provided, That the retired member shall not, during the term of his or her retirement and continued service as a member of the legislative body of a political subdivision, be eligible to continue his or her participation as a contributing member of the system and shall not continue to accrue any additional service credit or benefits in the system related to the continued service.
(f) Notwithstanding the provisions of section twenty-seven-b of this article, any publicly elected member of the legislative body of any political subdivision or of the State Legislature, the clerk of the House of Delegates and the clerk of the Senate may elect to commence receiving in-service retirement distributions from this system upon attaining the age of seventy and one-half years: Provided, That the member is eligible to retire under the provisions of section twenty or twenty-one of this article: Provided, however, That the member elects to stop actively contributing to the system while receiving the in-service distributions.
(g) The provisions of section twenty-two-h of this article are not applicable to the amendments made to this section during the 2006 Regular Session.
(h)(1) The Legislature finds that currently there are insufficient provisions to assure compliance with requirements of subsection (c) of this section. The Legislature further finds that cooperation among the State Auditor, The Consolidated Public Retirement Board, participating public employers and contractors providing services to the participating public employers is required to facilitate compliance.
(2) The State Auditor shall match information in its database with information in the databases of the Consolidated Public Retirement Board, the state’s Department of Administration and participating public employers to identify all those retirants of the Public Employees Retirement System who are receiving an annuity while at the same time receiving any payment from a participating public employer, whether as an employee, contractor or person doing work directly for the participating public employer as an employee of a contractor. If payment is made to a corporation, partnership, or entity by which an individual is “doing business as” a name other than the proprietor, the State Auditor shall seek information sufficient to determine the amount of any of the payments inuring to the benefit of any retirant directly serving the participating public employer. Upon reasonable belief that a retirant is in violation of subsection (c) of this section, the State Auditor shall notify the retirement board. The State Auditor shall also notify the retirement board upon reasonable belief that a retirant providing services to a participating public employer under a contract should be classified as an employee. If the retirement board has reasonable belief that the retirant providing services under a contract is in violation of subsection (c) of this section, the retirement board shall notify the retirant and, if the retirant does not agree to employee status, the retirement board shall promptly request a determination of employee or contractor status from the United States Internal Revenue Service.
(3) The retirement board and participating public employers shall cooperate fully with the State Auditor to assist the State Auditor in gathering the information as required in this subsection and to permit the State Auditor to fully comply with the provisions limiting post-retirement earnings as set forth in this section. Issuance of IRS Form 1099 is not conclusive evidence that the receiver of payment is a contractor and not an employee.
(4) As a condition of a contract, any contractor providing services to a participating public employer shall provide to the employer the name and social security number of each person performing work under the contract who is a retirant of the Public Employees Retirement System, the amount paid to the retirant and the retirant’s complete job description.
(5) Except as relates to former employees of the Legislature reemployed by the Legislature, the State Auditor shall make available to the public information on those retirants who are regularly employed on a full-time basis by a participating public employer, or who are receiving payments from a participating public employer under other circumstances mentioned in this subsection or subsection (c) of this section. The information provided shall include the name of the retirant, the amount of money paid to the retirant, the entity making the payment, a general description of services rendered in exchange for the payment and the time for which payment was made.
NOTE: The purpose of this bill is to facilitate assurance of compliance with statutory requirements which, under certain circumstances, limit earnings of a retiree in post-retirement employment.
The bill requires cooperation and information sharing among the State Auditor, The Consolidated Public Retirement Board, the state Department of Administration, employers participating in the Public Employees Retirement System and contractors providing services to the state.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.