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ENROLLED
Senate Bill No. 563
(By Senator Jenkins)
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[Passed March 10, 2004; in effect ninety days from passage.]
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AN ACT to amend and reenact §5-10-2, §5-10-17, §5-10-21, §5-10-23,
§5-10-26, §5-10-27 and §5-10-44 of the code of West Virginia,
1931, as amended, all relating to the public employees
retirement system; rights of members to select a plan
beneficiary; requiring annual physician review and annual
statement of earnings from those persons receiving disability
retirement payments; providing that interest is to be included
in the calculation of terminal benefits payable as the result
of death of retired participants; alphabetizing definitions;
defining service credit for certain employees; increasing
look-back period in definition of final average salary; adding
definitions of "accumulated net benefit" and "employer error";
providing guidance on correcting employer errors; and making
technical corrections.
Be it enacted by the Legislature of West Virginia:
That
§5-10-2, §5-10-17, §5-10-21, §5-10-23, §5-10-26, §5-10-27
and §5-10-44
of the code of West Virginia, 1931, as amended,
be amended and reenacted, all
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 compensation 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;
(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 using 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 public employees retirement system;
(8) "Compensation" means the remuneration paid a member by a
participating public employer for personal services rendered by him
or her 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
his or her remuneration which is not paid in money;
(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. This revised
definition is retroactive and applicable to the first day of April,
one thousand nine hundred eighty-eight, and thereafter;
(10) "Credited service" means the sum of a member's prior
service credit, military 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
members of the Legislature, the clerk of the House of Delegates,
the clerk of the Senate, employees of the Legislature whose term of
employment is otherwise classified as temporary and who are
employed to perform services required by the Legislature for its
regular sessions or during the interim between regular sessions and
who have been or are employed during regular sessions or during the
interim between regular sessions in seven consecutive calendar
years, as certified by the clerk of the house in which the employee
served, members of the legislative body of any political
subdivision and judges of the state court of claims are considered
to be employees receiving one year of service credit for each one
year term served and prorated 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 and/or
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 shall
not constitute employer error;
(13) "Final average salary" means either:
(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 one thousand nine hundred
seventy-one or thereafter) during any period of three consecutive
years of the member's credited service contained within his or her
fifteen years of credited service immediately preceding the date of
last termination of employment with a participating public
employer; or
(B) If the member has less than five years of credited
service, the average of the annual rate of compensation received by
him or her during the member's total years of credited service; and
in determining the annual compensation, under either this paragraph
or paragraph (A) of this subdivision, of a member of the
Legislature who participates in the retirement system as a member
of the Legislature in the year one thousand nine hundred
seventy-one 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 one thousand nine hundred seventy-one 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 one thousand nine hundred seventy-one who,
in either event, was a member of the Legislature on the thirtieth
day of November, one thousand nine hundred sixty-eight, or the
thirtieth day of November, one thousand nine hundred sixty-nine, or
the thirtieth day of November, one thousand nine hundred seventy,
or on the thirtieth day of November 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) one thousand five hundred dollars
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 this paragraph or paragraph (A) of this subdivision, whichever
computation produces the higher final average salary (and in determining the annual compensation under subparagraph (ii) of this
paragraph, the legislative compensation of the former member shall
be computed on the basis of one thousand five hundred dollars
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
one thousand five hundred dollars 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;
(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 is included in the
membership of the retirement system;
(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 the first day of July,
one thousand nine hundred ninety-seven, 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 the first day of July, one thousand nine hundred ninety-seven: Provided, however, That the regional community
policing institute which participated in the public employees
retirement system before the first day of July, two thousand, 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 the first day of July,
two thousand;
(20) "Prior service" means service rendered prior to the first
day of July, one thousand nine hundred sixty-one, 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 the first day of April of
the calendar year following the later of: (A) The calendar year in
which the member attains age seventy and one-half; or (B) the
calendar year in which the member ceases providing service covered
under this system to a participating employer;
(23) "Retirant" means any member who retires with an annuity
payable by the retirement system;
(24) "Retirement" means a member's withdrawal from the employ
of a participating public employer with an annuity payable 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: (A) Service from the first
day of July, one thousand nine hundred sixty-one, and the date an
employer decides to become a participating member of the public
employees retirement system; or (B) service prior to the first day
of July, one thousand nine hundred sixty-one, for which the
employee is not entitled to prior service at no cost in accordance
with 162 CSR 5.13; or (C) 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 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, as defined in this
article, of a participating public employer; and
(28) "State" means the state of West Virginia.
§5-10-17. Retirement system membership.
The membership of the retirement system consists of the
following persons:
(a) All employees, as defined in section two of this article,
who are in the employ of a political subdivision the day preceding
the date it becomes a participating public employer and who continue in the employ of the participating public employer on and
after that date shall become members of the retirement system; and
all persons who become employees of a participating public employer
on or after that date shall thereupon become members of the system;
except as provided in subdivisions (b) and (c) of this section.
(b) The membership of the retirement system may not include
any person who is an active contributing member of, or who has been
retired by, any of the state teachers retirement systems, the
judges retirement system, the West Virginia state police death,
disability and retirement fund, the West Virginia state police
retirement system, the deputy sheriff retirement system or any
municipal retirement system for either, or both, policemen or
firemen; and the bureau of employment programs, by the commissioner
of the bureau, may elect whether its employees will accept coverage
under this article or be covered under the authorization of a
separate enactment: Provided, That the exclusions of membership may
not apply to any member of the state Legislature, the clerk of the
House of Delegates, the clerk of the state Senate or to any member
of the legislative body of any political subdivision provided he or
she once becomes a contributing member of the retirement system:
Provided, however, That any retired member of the West Virginia
state police death, disability and retirement fund, the West
Virginia state police retirement system, the deputy sheriff
retirement system and any retired member of any municipal retirement system for either, or both, policemen or firemen may on
and after the effective date of this section become a member of the
retirement system as provided in this article, without receiving
credit for prior service as a municipal policeman or fireman or as
a member of the West Virginia state police death, disability and
retirement fund, the West Virginia state police retirement system
or the deputy sheriff retirement system: Provided further, That the
membership of the retirement system does not include any person who
becomes employed by the Prestera center for mental health services,
valley comprehensive mental health center, Westbrook health
services or eastern panhandle mental health center on or after the
first day of July, one thousand nine hundred ninety-seven: And
provided further, That membership of the retirement system does not
include any person who becomes a member of the federal railroad
retirement act on or after the first day of July, two thousand.
(c) Any member of the state Legislature, the clerk of the
House of Delegates, the clerk of the state Senate and any employee
of the state Legislature whose 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 so employed during
regular sessions or during the interim between sessions in seven
consecutive calendar years, as certified by the clerk of the house
in which the employee served, or any member of the legislative body of any other political subdivision shall become a member of the
retirement system provided he or she notifies the retirement system
in writing of his or her intention to be a member of the system and
files a membership enrollment form as prescribed by the board of
trustees and each person, upon filing his or her written notice to
participate in the retirement system, shall by that act authorize
the clerk of the House of Delegates or the clerk of the state
Senate or such person or legislative agency as the legislative body
of any other political subdivision shall designate to deduct the
member's contribution, as provided in subsection (b), section
twenty-nine of this article, and after the deductions have been
made from the member's compensation, the deductions shall be
forwarded to the retirement system.
(d) If question arises regarding the membership status of any
employee, the board of trustees has the final power to decide the
question.
(e) Any individual who is a leased employee is not eligible to
participate in the system. For the purposes of this article, the
term "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 final authority to decide the question.
§5-10-21. Deferred retirement and early retirement.
(a) Any member who has five or more years of credited service
in force, of which at least three years are contributing service,
and who leaves the employ of a participating public employer prior
to his or her attaining age sixty years for any reason except his
or her disability retirement or death shall be entitled to an
annuity computed according to section twenty-two of this article as
that section was in force as of the date of his or her separation
from the employ of a participating public employer: Provided, That
he or she does not withdraw his or her accumulated contributions
from the members' deposit fund: Provided, however, That on and
after the first day of July, two thousand two, any person who
becomes a new member of this retirement system shall, in qualifying
for retirement hereunder, have five or more years of service, all
of which years shall be actual, contributory ones. His or her
annuity shall begin the first day of the calendar month next
following the month in which his or her application for same is
filed with the board of trustees on or after his or her attaining
age sixty-two years.
(b) Any member who qualifies for deferred retirement benefits
in accordance with subsection (a) of this section and has ten or
more years of credited service in force and who has attained age
fifty-five as of the date of his or her separation may, prior to
the effective date of his or her retirement, but not thereafter,
elect to receive the actuarial equivalent of his or her deferred retirement annuity as a reduced annuity commencing on the first day
of any calendar month between his or her date of separation and his
or her attainment of age sixty-two years and payable throughout his
or her life.
(c) Any member who qualifies for deferred retirement benefits
in accordance with subsection (a) of this section and has twenty or
more years of credited service in force may elect to receive the
actuarial equivalent of his or her deferred retirement annuity as
a reduced annuity commencing on the first day of any calendar month
between his or her fifty-fifth birthday and his or her attainment
of age sixty-two years and payable throughout his or her life.
(d) Notwithstanding any of the other provisions of this
section or of this article, except sections twenty-seven-a and
twenty-seven-b of this article, and pursuant to rules promulgated
by the board, any member who has thirty or more years of credited
service in force, at least three of which are contributing service,
and who elects to take early retirement, which for the purposes of
this subsection means retirement prior to age sixty, whether an
active employee or a separated employee at the time of application,
shall be entitled to the full computation of annuity according to
section twenty-two of this article, as that section was in force as
of the date of retirement application, but with the reduced
actuarial equivalent of the annuity the member would have received
if his or her benefit had commenced at age sixty when he or she would have been entitled to full computation of benefit without any
reduction.
(e) Notwithstanding any of the other provisions of this
section or of this article, except sections twenty-seven-a and
twenty-seven-b of this article, any member of the retirement system
may retire with full pension rights, without reduction of benefits,
if he or she is at least fifty-five years of age and the sum of his
or her age plus years of contributing service and limited credited
service, as defined in section two of this article, equals or
exceeds eighty. An annuity shall begin the first day of the
calendar month next following the month in which application for
the annuity is filed with the board of trustees.
§5-10-23. Terminal payment following retirement.
(a) This section provides for the payment of the balance in
a retired member's account in the event that all claims to benefits
payable to, or on behalf of, a member expire before his or her
member account has been fully exhausted. The expiration of rights
to benefits would be on the later of either the death of the
retired member drawing benefits under a straight life annuity or
the death of a survivor annuitant drawing benefits under any
optional form of benefit selected by the retired member.
(b) In the event that all claims to benefits payable to, or on
behalf of, a retired member expire and the accumulated
contributions exceed the accumulated net benefit paid to or on behalf of the retired member, the balance in the retired member's
account shall be paid to the person or persons nominated by the
retired member by written designation duly executed and filed with
the board of trustees. If there is no designated person or persons
surviving the retired member following the expiration of claims,
the excess of the accumulated contributions over the accumulated
net benefit, if any, shall be paid to the retired member's estate:
Provided, That the provisions of this section shall be retroactive
for all members who entered retirement status on or after the ninth
day of June, two thousand.
§5-10-26. Reexamination of disability retirants; reemployment;
adjustment of annuity for earnings.
(a) At least once each year during the first five years
following the retirement of a member on account of disability, as
provided in section twenty-five hereof, and at least once in each
three-year period thereafter, the board of trustees shall require
a disability retirant, who has not attained age sixty years, to
submit a statement from the disability retirant's physician
certifying continued disability and to submit a copy of the
disability retirant's income tax return from the previous tax year.
Should the retirant refuse to submit required documentation in any
period, the retirant's disability annuity may be discontinued by
the board until the board receives the required documentation.
Should refusal continue for one year, all the retirant's rights in and to the annuity may be revoked by the board. If, upon medical
examination of a disability retirant, a physician reports to the
board that the retirant is physically able and capable of resuming
employment with a participating public employer, the retirant shall
be returned to the employ of the participating public employer from
whose employment he or she retired and his or her disability
annuity shall terminate: Provided, That the board concurs with the
physician's report.
(b) A disability retirant who is returned to the employ of a
participating public employer shall again become a member of the
retirement system and his or her credited service in force at the
time of retirement shall be restored to his or her credit.
§5-10-27. Preretirement death annuities.
(a) In the event any member who has ten or more years of
credited service, or any former member with ten or more years of
credited service and who is entitled to a deferred annuity,
pursuant to section twenty-one of this article: (1) Dies without
leaving surviving him or her a spouse; but (2) leaves surviving him
or her a child who is financially dependent on the member by virtue
of a permanent mental or physical disability upon evidence
satisfactory to the board; and (3) has named such disabled child as
sole beneficiary, the disabled child shall immediately receive an
annuity computed in the same manner in all respects as if the said
member had: (i) Retired the day preceding the date of his or her death, notwithstanding that he or she might not have attained age
sixty or sixty-two years, as the case may be; (ii) elected option
A provided in section twenty-four of this article; and (iii)
nominated his or her disabled child as beneficiary. A member or
former member with ten or more years of credited service who does
not leave surviving him or her a spouse or a disabled child may
elect to have the preretirement death benefit paid as a return of
accumulated contributions in a lump sum amount to any beneficiary
or beneficiaries he or she chooses.
(b) In the event any member who has ten or more years of
credited service, or any former member with ten or more years of
credited service and who is entitled to a deferred annuity,
pursuant to section twenty-one of this article: (1) Dies; and (2)
leaves a surviving spouse, the surviving spouse shall immediately
receive an annuity computed in the same manner in all respects as
if the said member had: (1) Retired the day preceding the date of
his or her death, notwithstanding that he or she might not have
attained age sixty or sixty-two years, as the case may be; (2)
elected option A provided in section twenty-four of this article;
and (3) nominated his or her surviving spouse as beneficiary.
However, the surviving spouse shall have the right to waive the
annuity provided in this section: Provided, That he or she executes
a valid and notarized waiver on a form provided by the retirement
board and that the member or former member attests to the waiver. If the waiver is presented to and accepted by the retirement board,
the member or former member may nominate, upon evidence
satisfactory to the board, a child who is financially dependent on
the member by virtue of a permanent mental or physical disability
under annuity option A. As an alternative to annuity option A, the
member or former member may elect to have the preretirement death
benefit paid as a return of accumulated contributions in a lump sum
amount to any beneficiary or beneficiaries he or she chooses in the
event a waiver, as provided in this section, has been presented to
and accepted by the retirement board.
(c) In the event any member who has ten or more years of
credited service, or any former member with ten or more years of
credited service and who is entitled to a deferred annuity,
pursuant to section twenty-one of this article: (1) Dies without
leaving surviving him or her a spouse; but (2) leaves surviving him
or her an infant child or children; and (3) does not have a
beneficiary nominated as provided in subsection (a) of this
section, the infant child or children shall be entitled to an
annuity to be calculated as follows: The annuity reserve shall be
calculated as though the member had retired as of the date of his
or her decease and elected a straight life annuity and the amount
of the annuity reserve shall be paid in equal monthly installments
to said member's infant child or children until the child or
children attain age twenty-one or sooner marry or become emancipated; however, in no event shall any child or children
receive more than two hundred fifty dollars per month each. The
annuity payments shall be computed as of the date of the death of
the member and the amount of the annuity shall remain constant
during the period of payment. The annual amount of the annuities
payable by this section shall not exceed sixty percent of the
deceased member's final average salary.
(d) In the event any member or former member does not have ten
or more years of credited service, no preretirement death annuity
may be authorized, owed or awarded under this section.
§5-10-44. Correction of errors.
Should any change or employer error in the records of any
participating public employer or the retirement system result in
any person receiving from the system more or less than the person
would have been entitled to receive had the records been correct,
the board of trustees shall correct the records and, as far as is
practicable, shall adjust the payment of the benefit in such 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. Interest shall accumulate in accordance with 162 CSR
7.4.1.2 and any interest owed on the employee and employer contributions resulting from employer error shall be the
responsibility of the participating public employer. 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 not to exceed two thousand
dollars. The participating public employer shall submit proof that
employer error was not willful, wanton or reckless.