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Introduced Version Senate Bill 538 History

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sb538 intr
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.

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(NOTE: The purpose of this bill is to transfer responsibility for the state employee 457 plan to the State Treasurer on July 1, 2006, authorize political subdivisions without plans to request the Treasurer include its employees in the state plan, allow political subdivision employees to participate in the state plan when their employer does not offer a plan, clarify various powers and requirements, authorize employees to attend meetings to explain a plan called by the state or public employer during regular working hours, authorize the state and public employers to charge fees for plan administration, clarify liability, establish trust fund and administrative account in State Treasury, provide that information that would tend to disclose the identity of a participating employee is exempt from disclosure under the Freedom of Information Act and to protect the moneys from certain legal processes.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

§5-10B-11, §5-10B-12 and §5-10B-13 are new; therefore, strike-throughs and underscoring have been omitted.)
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