Senate Bill No. 207
(By Senators Foster and Plymale)
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[Introduced January 11, 2008; referred to the Committee on
Pensions; and then to the Committee on Finance.]
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A BILL to amend and reenact §7-14D-7, §7-14D-9c, §7-14D-14, §7-14D-
15, §7-14D-16, §7-14D-23, §7-14D-24 and §7-14D-30 of the Code
of West Virginia, 1931, as amended, all relating to the Deputy
Sheriff Retirement System Act; correcting errors; permitting
rollovers of any dollar amount; providing for an onset date
for disability retirement benefits; providing for termination
of disability retirement benefits of a retirant who refuses to
submit to a medical examination or provide a certification
statement by his or her physician of continued disability;
removing option for term insurance to repay loan; providing
for subsequent loan on repayment of prior loan; clarifying
eligibility requirements of certain sheriffs; and permitting
collection of fees for late payment from employers.
Be it enacted by the Legislature of West Virginia:
That §7-14D-7, §7-14D-9c, §7-14D-14, §7-14D-15, §7-14D-16, §7-14D-23, §7-14D-24, and §7-14D-30 of the Code of West Virginia,
1931, as amended, be amended and reenacted, all to read as follows:
ARTICLE 14D. DEPUTY SHERIFF RETIREMENT SYSTEM ACT.
§7-14D-7. Members' contributions; employer contributions;
correction of errors.
(a) There shall be deducted from the monthly salary of each
member and paid into the fund an amount equal to eight and one-half
percent of his or her monthly salary. An additional amount shall
be paid to the fund by the county commission of the county in which
the member is employed in covered employment in an amount
determined by the board
: Provided, That in no year may the total
of the contributions provided in this section, to be paid by the
county commission, exceed ten and one-half percent of the total
payroll for the members in the employ of the county commission for
the preceding fiscal year. If the board finds that the benefits
provided by this article can be actually funded with a lesser
contribution, then the board shall reduce the required member or
employer contributions or both. The sums withheld each calendar
month shall be paid to the fund no later than fifteen days
following the end of the calendar month.
(b) Any active member who has concurrent employment in an
additional job or jobs and the additional employment requires the
deputy sheriff to be a member of another retirement system which is
administered by the Consolidated Public Retirement Board pursuant to article ten-d, chapter five of this code shall make an
additional contribution to the fund of eight and one-half percent
of his or her monthly salary earned from any additional employment
which requires the deputy sheriff to be a member of another
retirement which is administered by the Consolidated Public
Retirement Board pursuant to article ten-d, chapter five of this
code. An additional amount shall be paid to the fund by the
concurrent employer for which the member is employed in an amount
determined by the board
: Provided, That in no year may the total
of the contributions provided in this section, to be paid by the
concurrent employer, exceed ten and one-half percent of the monthly
salary of the employee. If the board finds that the benefits
provided by this article can be funded with a lesser contribution,
then the board shall reduce the required member or employer
contributions or both. The sums withheld each calendar month shall
be paid to the fund no later than fifteen days following the end of
the calendar month.
(c) If any change or employer error in the records of any
participating public employer or the retirement system results in
any person receiving from the system more or less than he or she
would have been entitled to receive had the records been correct,
the board shall correct the error, and as far as is practicable
shall adjust the payment of the benefit in a manner that the
actuarial equivalent of the benefit to which the person was correctly entitled shall be paid. Any employer error resulting in
an underpayment to the retirement system may be corrected by the
employee remitting the required employee contribution and the
participating public employer remitting the required employer
contribution. Any accumulating interest owed on the employee and
employer contributions resulting from the employer error shall be
the responsibility of the participating public employer.
Reinstatement interest shall accumulate in accordance with the
Legislative Rule 162 CSR 7. The participating public employer may
remit total payment and the employee reimburse the participating
public employer through payroll deduction over a period equivalent
to the time period during which the employer error occurred.
§7-14D-9c. Direct rollovers.
(a) This section applies to distributions made on or after the
first day of January, one thousand nine hundred ninety-three.
Notwithstanding any provision of this article to the contrary that
would otherwise limit a distributee's election under this plan, a
distributee may elect, at the time and in the manner prescribed by
the board, to have any portion of an eligible rollover distribution
that is equal to at least five hundred dollars paid directly to an
eligible retirement plan specified by the distributee in a direct
rollover. For purposes of this section, the following definitions
apply: (1) "Eligible rollover distribution" means any distribution
of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not
include any of the following: (i) Any distribution that is one of
a series of substantially equal periodic payments not less
frequently than annually made for the life or life expectancy of
the distributee or the joint lives or the joint life expectancies
of the distributee and the distributee's designated beneficiary, or
for a specified period of ten years or more; (ii) any distribution
to the extent the distribution is required under Section 401(a)(9)
of the Internal Revenue Code; (iii) the portion of any distribution
that is not includable in gross income determined without regard to
the exclusion for net unrealized appreciation with respect to
employer securities;
and (iv) any hardship distribution described
in Section 401(k)(2)(B)(i)(iv) of the Internal Revenue Code
and (v)
any other distribution or distributions reasonably expected to
total less than two hundred dollars during a year. For
distributions after the thirty-first day of December, two thousand
one, a portion of a distribution shall not fail to be an eligible
rollover distribution merely because the portion consists of
after-tax employee contributions which are not includable in gross
income. However, this portion may be paid only to an individual
retirement account or annuity described in Section 408(a) or (b) of
the Internal Revenue Code, or to a qualified defined contribution
plan described in Section 401(a) or 403(a) of the Internal Revenue
Code that agrees to separately account for amounts transferred, including separately accounting for the portion of the distribution
which is includable in gross income and the portion of the
distribution which is not includable.
(2) "Eligible retirement plan" means an individual retirement
account described in Section 408(a) of the Internal Revenue Code,
an individual retirement annuity described in Section 408(b) of the
Internal Revenue Code, an annuity plan described in Section 403(a)
of the Internal Revenue Code or a qualified plan described in
Section 401(a) of the Internal Revenue Code that accepts the
distributee's eligible rollover distribution
: Provided, That in
the case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity. For distributions after
the thirty-first day of December, two thousand one, an eligible
retirement plan also means an annuity contract described in Section
403(b) of the Internal Revenue Code and an eligible plan under
Section 457(b) of the Internal Revenue Code which is maintained by
a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and
which agrees to separately account for amounts transferred into the
plan from this system.
(3) "Distributee" means an employee or former employee. In
addition, the employee's or former employee's surviving spouse and
the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as
defined in Section 414(p) of the Internal Revenue Code with respect
to governmental plans, are distributees with regard to the interest
of the spouse or former spouse.
(4) "Direct rollover" means a payment by the plan to the
eligible retirement plan.
(b) Nothing in this section shall be construed as permitting
rollovers to this plan or any other retirement system administered
by the board.
§7-14D-14. Awards and benefits for disability -- Duty related.
(a) Any member who after the effective date of this article
and during covered employment:
(A) (1) Has been or becomes either
totally or partially disabled by injury, illness or disease; and
(B) (2) the disability is a result of an occupational risk or
hazard inherent in or peculiar to the services required of members;
or
(C) (3) the disability was incurred while performing
law-enforcement functions during either scheduled work hours or at
any other time; and
(D) (4) in the opinion of the board, the member
is by reason of the disability unable to perform adequately the
duties required of a deputy sheriff, is entitled to receive and
shall be paid from the fund in monthly installments
during the
lifetime of the member, or if sooner, until the member attains
normal retirement age or until the disability sooner terminates,
the compensation under either
subdivision (a) or (b) subsection (b) or (c) of this section.
(a) (b) If the member is totally disabled, the member shall
receive ninety percent of his or her average full monthly
compensation for the twelve-month contributory period preceding the
member's disability award, or the shorter period if the member has
not worked twelve months.
(b) (c) If the member is partially disabled, the member shall
receive forty-five percent of his or her average full monthly
compensation for the twelve-month contributory period preceding the
member's disability award, or the shorter period if the member has
not worked twelve months.
(d) If the member remains totally disabled until attaining
sixty-five years of age, the member shall then receive the
retirement benefit provided for in sections eleven and twelve of
this article.
(e) If the member remains partially disabled until attaining
sixty years of age, the member shall then receive the retirement
benefit provided for in sections eleven and twelve of this article.
(f) The disability benefit payments will begin the first day
of the month following termination of employment and receipt of the
disability retirement application by the Consolidated Public
Retirement Board.
§7-14D-15. Same -- Due to other causes.
(a) Any member who after the effective date of this article and during covered employment: (1) Has been or becomes totally or
partially disabled from any cause other than those set forth in
section fourteen of this article and not due to vicious habits,
intemperance or willful misconduct on his or her part; and (2) in
the opinion of the board, he or she is by reason of the disability
unable to perform adequately the duties required of a deputy
sheriff, is entitled to receive and shall be paid from the fund in
monthly installments
during the lifetime of the member, or if
sooner, until the member attains normal retirement age or until the
disability sooner terminates the compensation set forth in, either
subsection (b) or (c) of this section.
(b) If the member is totally disabled, he or she shall receive
sixty-six and two-thirds percent of his or her average full monthly
compensation for the twelve-month contributory period preceding the
disability award, or the shorter period, if the member has not
worked twelve months.
(c) If the member is partially disabled, he or she shall
receive thirty-three and one-third percent of his or her average
full monthly compensation for the twelve-month contributory period
preceding the disability award, or the shorter period, if the
member has not worked twelve months.
(d) If the member remains disabled until attaining sixty years
of age, then the member shall receive the retirement benefit
provided
for in sections eleven and twelve of this article.
(e) The board shall propose legislative rules for promulgation
in accordance with the provisions of article three, chapter
twenty-nine-a of this code concerning member disability payments so
as to ensure that the payments do not exceed one hundred percent of
the average current salary in any given county for the position
last held by the member.
(f) The disability benefit payments will begin the first day
of the month following termination of employment and receipt of the
disability retirement application by the Consolidated Public
Retirement Board.
§7-14D-16. Same -- Physical examinations; termination of
disability.
(a) The board may require any member who has applied for or
is receiving disability benefits under this article to submit to a
physical examination, mental examination or both, by a physician or
physicians selected or approved by the board and may cause all
costs incident to the examination and approved by the board to be
paid from the fund. The costs may include hospital, laboratory,
X-ray, medical and physicians' fees. A report of the findings of
any physician shall be submitted in writing to the board for its
consideration. If, from the report, independent information, or
from the report and any hearing on the report, the board is of the
opinion and finds that: (1) The member has become reemployed as a
law-enforcement officer; (2) two physicians who have examined the member have found that considering the opportunities for law
enforcement in West Virginia, the member could be so employed as a
deputy sheriff; or (3) other facts exist to demonstrate that the
member is no longer totally disabled or partially disabled as the
case may be, then the disability benefits shall cease. If the
member was totally disabled and is found to have recovered, the
board shall determine whether the member continues to be partially
disabled. If the board finds that the member is no longer totally
disabled but is partially disabled, then the member shall continue
to receive partial disability benefits in accordance with this
article. Benefits shall cease once the member has been found to be
no longer either totally or partially disabled: Provided, That the
board shall require recertification for each partial or total
disability at regular intervals as specified by the guidelines
adopted by the Public Employees Retirement System.
(b) If a retirant refuses to submit to a medical examination
or submit a statement by his or her physician certifying continued
disability in any period, his or her disability annuity may be
discontinued by the board until the retirant complies. If the
refusal continues for one year, all the retirant's rights in and to
the annuity may be revoked by the board.
§7-14D-23. Loans to members.
(a) A member who is not yet receiving disability or retirement
income benefits from the plan may borrow from the plan no more than one time in any year an amount up to one half of his or her
accumulated contributions, but not less than five hundred dollars
nor more than eight thousand dollars: Provided, That the maximum
amount of any loan shall not exceed the lesser of the following:
(1) Eight thousand dollars; or (2) fifty percent of his or her
accumulated contributions. No member is eligible for more than one
outstanding loan at any time. No loan may be made from the plan if
the board determines that the loans constitute more than fifteen
percent of the amortized cost value of the assets of the plan as of
the last day of the preceding plan year. The board may discontinue
the loans any time it determines that cash flow problems might
develop as a result of the loans. Each loan shall be repaid
through monthly installments over periods of six through sixty
months and carry interest on the unpaid balance and an annual
effective interest rate that is two hundred basis points higher
than the most recent rate of interest used by the board for
determining actuarial contributions levels: Provided, however,
That interest charged shall be commercially reasonable in
accordance with the provisions of Section 72(p)(2) of the Internal
Revenue Code and federal regulations issued thereunder. Monthly
loan payments shall be calculated to be as nearly equal as possible
with all but the final payment being an equal amount. An eligible
member may make additional loan payments or pay off the entire loan
balance at any time without incurring any interest penalty. At the member's option, the monthly loan payment may include a level
premium sufficient to provide declining term insurance with the
plan as beneficiary to repay the loan in full upon the member's
death. If a member declines the insurance and dies before the loan
is repaid, the unpaid balance of the loan shall be deducted from
the lump sum insurance benefits payable under section twenty-one of
this article. Upon full payment of the loan, a member may apply
for a subsequent loan after sixty (60) days beginning the first day
of the month following receipt of final payment.
(b) A member with an unpaid loan balance who wishes to retire
may have the loan repaid in full by accepting retirement income
payments reduced by deducting from the actuarial reserve for the
accrued benefit the amount of the unpaid balance and then
converting the remaining of the reserve to a monthly pension
payable in the form of the annuity desired by the member.
(c) The entire unpaid balance of any loan, and interest due
thereon, shall at the option of the board become due and payable
without further notice or demand upon the occurrence with respect
to the borrowing member of any of the following events of default:
(1) Any payment of principal and accrued interest on a loan remains
unpaid after they become due and payable under the terms of the
loan or after the grace period established in the discretion of the
retirement board; (2) the borrowing member attempts to make an
assignment for the benefit of creditors of his or her benefit under the retirement system; or (3) any other event of default set forth
in rules promulgated by the board pursuant to the authority granted
in section one, article ten-d, chapter five of this code:
Provided, That any offset of an unpaid loan balance shall be made
only at such time as the member is entitled to receive a
distribution under the plan.
(d) Loans shall be evidenced by such form of obligations and
shall be made upon such additional terms as to default, prepayment,
security, and otherwise as the board may determine.
(e) Notwithstanding anything in this section to the contrary,
the loan program authorized by this section shall comply with the
provisions of Section 72(p)(2) and Section 401 of the Internal
Revenue Code and the federal regulations issued thereunder. The
board may: (a) Apply and construe the provisions of this section
and administer the plan loan program in such a manner as to comply
with the provisions of Sections 72(p)(2) and Section 401 of the
Internal Revenue Code; (b) adopt plan loan policies or procedures
consistent with these federal law provisions; and (c) take any
actions it considers necessary or appropriate to administer the
plan loan program created under this section in accordance with
these federal law provisions. The board is further authorized in
connection with the plan loan program to take any actions that may
at any time be required by the Internal Revenue Service regarding
compliance with the requirements of Section 72(p)(2) or Section 401 of the Internal Revenue Code, notwithstanding any provision in this
article to the contrary.
(f) Notwithstanding anything in this article to the contrary,
the loan program authorized by this section shall not be available
to any deputy sheriff who becomes a member of the Deputy Sheriff
Retirement System on or after the first day of July, two thousand
five.
§7-14D-24. Service as sheriff.
(a) Any active actively contributing member who after the
effective date of this article is elected sheriff of a county in
West Virginia may elect to continue as a member in this plan by
paying the amounts required by section seven of this article. Upon
the election, service as a sheriff shall be treated as covered
employment and the sheriff is not entitled to any credit for that
service under any other retirement system of the state.
(b) Any member retired as a deputy sheriff under this plan
who, after the effective date of this article, is elected or
appointed sheriff of a county in West Virginia, may elect to
suspend the payment of his or her annuity from this system and
again become a contributing member of this plan by paying the
amounts required by section seven of this article. Upon such
election to suspend payment of the annuity, service as a sheriff
shall be treated as covered employment, and the sheriff is not
entitled to any credit for that period of elected service under any other retirement system of the state. At the end of his or her
term as sheriff, the member making such the election shall have his
or her annuity recalculated, and shall be granted an adjustment to
his or her previous annuity to include the period of elected
service.
(c) Any person, who before the effective date of this article
was elected sheriff of a county in West Virginia, and who,
immediately prior to being so elected sheriff, was a deputy sheriff
with at least twenty years of credited service under the Public
Employees Retirement System, with at least sixteen of those twenty
years having been earned as a deputy sheriff, may elect to become
a member of this plan by paying the amounts required by section
seven of this article. Upon such the election to become a member,
service shall be transferred from the Public Employees Retirement
System pursuant to section eight of this article: Provided, That
any service as a sheriff shall be treated as covered employment
under this article and the sheriff is not entitled to any credit
for that service as a sheriff or the prior service as a deputy
sheriff under any other retirement system of the state. Persons
making the election provided for in this subsection shall do so
within ten days of taking office as sheriff or within ten days of
the effective date of this provision.
(d) Any person who, before the effective date of this article,
was elected sheriff of a county of West Virginia, and who, prior to being elected sheriff, was a deputy sheriff and also a previously
elected sheriff, with credited service under the Public Employees
Retirement System, with at least sixteen of those years having been
earned as combined service as a deputy sheriff and a previously
elected sheriff, may elect to become a member of this plan by
paying the amounts required by section seven of the article. Upon
such election to become a member, service shall be transferred from
the Public Employees Retirement System pursuant to section eight of
this article: Provided, That a person's service as a sheriff shall
be treated as covered employment under this article, and that
person is not entitled to any credit for that service as a sheriff
or deputy sheriff under any other retirement system of this state.
A person making the election provided in this subsection shall do
so within thirty days of taking office as a sheriff or within
thirty days of the effective date of this provision.
§7-14D-30. Limitation of county liability.
No county which has timely met all of its obligations under
this article is liable for any payments or contributions to the
deputy sheriff retirement plan which are owed to the plan by
another county or counties. No county commission may deposit funds
into the Deputy Sheriff Retirement Fund in excess of the amount
specified in section seven of this article, the fees set forth in
article fourteen-e of this chapter, and the fees set forth in
subsection (f)(2) , section one, article ten-D, chapter five of this code, and the fees set forth in section seventeen, article
three, chapter seventeen-a of this code.
NOTE: The purpose of this bill is to make technical and other
changes to the Deputy Sheriff Retirement System; to provide for the
correction of errors; to permit rollovers of any dollar amount; to
provide for an onset date for disability retirement benefits; to
provide for the termination of disability retirement benefits of a
retirant who refuses to submit to a medical examination or provide
a certification statement by his or her physician of continued
disability; to remove option to purchase declining term insurance
for members with loans; to provide procedure for subsequent loans;
to clarify the eligibility requirements of certain sheriffs; and,
to permit the collection of fees for late payment from employers.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.