ENGROSSED
Senate Bill No. 538
(By Senators Chafin, Helmick and Love)
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[Introduced February 8, 2006;
referred to the Committee on Finance.]
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A BILL to amend and reenact §5-10B-1, §5-10B-2, §5-10B-3, §5-10B-4,
§5-10B-5, §5-10B-9 and §5-10B-10 of the Code of West Virginia,
1931, as amended; and to amend said code by adding thereto
three new sections, designated §5-10B-11, §5-10B-12 and
§5-10B-13, all relating to transferring responsibility for the
state employee 457 plan to the State Treasurer on the first
day of July, two thousand six; authorizing political
subdivisions without plans to request the Treasurer include
its employees in the state plan; allowing political
subdivision employees to participate in the state plan;
allowing political subdivision employees to participate in the
state plan when their employer does not offer a plan;
clarifying various powers and requirements; authorizing
employees to attend meetings called by the state or public
employer during regular working hours to explain the plan;
authorizing the state and public employers to charge fees for
plan administration; clarifying liability; establishing trust
fund and administrative account in the State Treasury; providing that information that would tend to disclose the
identity of a participating employee is exempt from disclosure
under the Freedom of Information Act; and protecting the
moneys from certain legal processes.
Be it enacted by the Legislature of West Virginia:
That §5-10B-1, §5-10B-2, §5-10B-3, §5-10B-4, §5-10B-5,
§5-10B-9 and §5-10B-10 of the Code of West Virginia, 1931, as
amended, be amended and reenacted; and that said code be amended by
adding thereto three new sections, designated §5-10B-11, §5-10B-12
and §5-10B-13, all to read as follows:
ARTICLE 10B. GOVERNMENT EMPLOYEES DEFERRED COMPENSATION PLANS.
§5-10B-1. Legislative purpose.
The legislative purpose of this enactment is to enable
employees of the state, its agencies, counties, municipalities and
political subdivisions of such governmental bodies to participate
in voluntary deferred compensation plans authorized by the United
States Internal Revenue Code as interpreted by the Internal Revenue
Service, thereby permitting such employees to obtain the advantages
inherent in such plans relative to the income tax treatment of the
contributions and disbursements made pursuant to such voluntary
income deferment plans. It is further the purpose of this
enactment to authorize the establishment of separate plans for the
state and its agencies and for counties, municipalities and
political subdivisions within the state
and to authorize county,
municipal and political subdivision employees to participate in the
state deferred compensation plan if their employer does not have a
plan.
§5-10B-2. Definitions.
Unless the context in which used clearly indicates a different
meaning, as used in this article:
(a) "Board" means the Consolidated Public Retirement Board
provided for in article ten of this chapter.
(b) "Deferred compensation" means the income and earnings on
that income an employee may legally defer for personal income tax
purposes pursuant to the Internal Revenue Code until distribution.
(b) (c) "Deferred compensation plan"
or "plan" means a trust
whereby the state
of West Virginia, as the public employer or a
public employer agrees with an employee for the voluntary reduction
in employee compensation for the payment of benefits by the state
employer or the public employer to the employee at a later date
pursuant to this article and the federal laws and regulations
relating to eligible state deferred compensation plans as described
in Section 457 of the Internal Revenue Code.
(d) "Deferred compensation trust fund" or "trust" means the
fund in which deferred amounts and investment income of
participating employees are held.
(c) (e) "Employee" means any person, whether appointed,
elected or under contract, providing services for the state
employer or public employer for which compensation is paid.
(d) "Public employer" means counties, municipalities or
political subdivisions of those governmental bodies which meet the
definition of "state" as described in Internal Revenue Code Section
457 (d)(1), but which do not meet the definition of "state
employer" as used in this article.
(e) "State employer" means the state of West Virginia and any
state agency or instrumentality of the state.
(f) "Internal Revenue Code" means the Internal Revenue Code of
1986, as it has been amended.
(g) "Investment product" means any fixed or variable rate
annuity, life insurance contract, savings account, certificate of
deposit, money market account, bond, mutual fund or any other form
of investment not prohibited under the Internal Revenue Code and
authorized by the state employer of the public employer for the
purpose of receiving funds under a plan.
(h) "Public employer" means counties, municipalities or
political subdivisions of those governmental bodies which meet the
definition of "state" as described in Internal Revenue Code Section
457 (d)(1), but which do not meet the definition of "state
employer" as used in this article.
(i) "State employer" means the State of West Virginia, which
includes every state board, commission, agency and instrumentality.
(j) "Treasurer" means the State Treasurer.
(k) "Vendor" means a private entity that sells investment
products or provides goods and services.
§5-10B-3. Powers; contracts; meetings.
(a) Notwithstanding any provision of this code to the
contrary, including, without limitation, this chapter and chapter
five-a of this code, the state employer and a public employer have
the power necessary or appropriate to carry out the provisions and
objectives of this article and to operate the trust, including,
without limitation, entering into contracts and executing and delivering instruments; engaging consultants, auditors, counsel,
managers, advisors, trustees or any other contractors or
professionals; and charging and collecting administrative fees.
(b) The state employer or any public employer may, by
contract, agree with any of its employees to defer and hold in
trust any portion of that employee's compensation and may
subsequently purchase or acquire from
any company vendors licensed
to do business in the State of West Virginia
fixed or variable
annuities, insurance, endowment, or savings account investment
products for the purpose of carrying out the objectives of the
deferred compensation plan as described in this article.
(c) Employees are authorized to attend meetings called by the
state employer or public employer for the purpose of explaining a
plan during regular working hours.
§5-10B-4. Responsibility for implementing plans -- Payroll
reductions -- Billing and administration.
(a)The responsibility for implementing the deferred
compensation plan for employees of the state employer shall be
delegated to the board of trustees
through the thirtieth day of
June, two thousand six. On the first day of July, two thousand
six, the Treasurer shall manage any deferred compensation plan for
state employees. Any and all records, moneys, contracts, property
and other matters involving deferred compensation plans for state
employees shall transfer on the first day of July, two thousand
six, to the Treasurer.
(b) The responsibility for implementing the deferred
compensation plan for employees of a public employer
as defined hereunder, shall be is delegated to the county commission of a
county,
or tribunal in lieu thereof the governing body of a
municipality, as that term is defined in section two, article one,
chapter eight of this code, and, in the case of any other political
subdivision, the board, commission or other similar body
responsible for determining the policy of such political
subdivision.
A county commission or a governing body of another
public employer may request the Treasurer authorize its employees
to participate in the state plan instead of implementing its own
plan.
(c) If the governing body has adopted more than one plan, an
employee electing to participate shall also elect the plan
or plans
in which he
or she desires to participate.
When a public employer
has not implemented a plan, its employees may participate in the
state plan.
(d) Payroll reductions shall be
made remitted as specified by
the state employer or public employer for deposit in the trust, in
each instance, by the appropriate payroll officer. The board of
trustees,
the Treasurer or appropriately designated local officer,
board or committee of
such deferred compensation plan may contract
with
a private corporation, institution and/or custodial bank one
or more vendors to provide consolidated billing and all or any
other
administrative goods and services
deemed necessary, in order
that any such deferred compensation plan adopted needed for a plan.
(e) Plans shall operate without cost to or contribution from
the state employer or public employer except for the incidental
expense of administering the payroll salary reductions and the remittance thereof.
(f) The state employer and the public employers may charge
fees on plan contributions, total assets, total return or other
selected method as necessary to provide for the administrative
expenses of a plan.
§5-10B-5. Investment of funds.
Notwithstanding any other provision of law to the contrary,
the board,
or the Treasurer beginning the first day of July, two
thousand six, as well as the appropriate local officer, board or
committee, designated as responsible for implementing a deferred
compensation plan, is hereby authorized to invest compensation held
pursuant to
any such a deferred compensation plan in
fixed and
variable annuities, mutual funds, insurance, endowment or savings
accounts from any company duly authorized to contract such business
in the state investment products.
§5-10B-9. Liabilities of State of West Virginia or political
subdivisions.
The state employer and the public employers shall not incur
any liability for losses suffered or change in value of an
investment product. The financial liability of the state employer
or public employer under any deferred compensation plan shall be
limited in each instance to
the value of the particular fixed or
variable annuity, insurance, endowment or savings account acquired
pursuant to the terms and provisions of this article, and the state
employer or public employer shall not be liable for any change in
value of such investment at the time of distribution to an employee
amounts paid over to the trust but not invested.
§5-10B-10. Deferred compensation plan funds held in trust.
(a) Notwithstanding anything herein to the contrary, as of the
first day of January, one thousand nine hundred ninety-eight, all
assets and income of all deferred compensation plans created or
administered pursuant to this article shall be held in trust for
the exclusive benefit of participants and their beneficiaries.
(b) The West Virginia Deferred Compensation Trust Fund is
created within the accounts held by the Treasurer or with one or
more financial institutions, vendors or any other entities selected
by the Treasurer for the purpose of managing and investing the
trust. A public employer managing a trust shall create a trust
fund and select one or more financial institutions, vendors or
other entities to hold the trust.
(c) The corpus, assets and earnings of the trust do not
constitute public funds of the state or public employer and are
available solely for carrying out the purposes of this article.
Any contract entered into by or any obligation of the state
employer or a public employer in connection with a plan does not
create or constitute a debt, but is solely an obligation of the
trust.
§5-10B-11. Deferred Compensation Administrative Account.
The Deferred Compensation Administrative Account is created in
the accounts of the Treasurer for the purposes of implementing,
operating and maintaining the trust and plan. The account shall
receive all fees charged and collected by the Treasurer under this
article. Expenditures from the fund are authorized from
collections.
§5-10B-12. Confidential information exempt from disclosure.
All information contained in the records maintained pursuant
to this article that would tend to disclose the identity of a
participating employee, including, without limitation, social
security number, account number, address, telephone number, e-mail
address, amounts invested, selected investments, returns and
medical or disability information, are confidential and exempt from
disclosure under the provisions of article one, chapter
twenty-nine-b of this code. Employees and persons authorized by
employees are permitted access to their own information.
§5-10B-13. Moneys not subject to legal process.
No account, benefit or right, accrued or accruing, is subject
to execution, garnishment, attachment, sale to satisfy a judgment
or order, the operation of bankruptcy or insolvency laws, or other
process of law and shall be unassignable.