Senate Bill No. 308
(By Senator Foster)
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[Introduced January 27, 2011; referred to the Committee on
Pensions; and then to the Committee on Finance.]
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A BILL to amend and reenact §5-10-2, §5-10-18, §5-10-21, §5-10-24,
§5-10-25, §5-10-44 and §5-10-48 of the Code of West Virginia,
1931, as amended, all relating to the Public Employees
Retirement System; clarifying the definition of "compensation"
for purposes of calculating required contributions to the
system; clarifying when membership in the system terminates
and how membership may be reinstated; providing that
individuals first hired after July 1, 2011, must have at least
five years of contributory service to retire under the "rule
of eighty"; making technical corrections to the provision
governing annuity options; requiring retirants changing
annuity options to certify that no final divorce decree or
other court order prohibits the same; making technical
corrections to the provision governing disability retirement;
clarifying that correction of errors provision applies to both employer errors and errors of the system's administrative
body; providing that the correction of an error with respect
to a retirant may be prospective only; providing for system of
reimbursement of mistaken contributions that ensures the
plan's continued qualified status; and making technical
correction to the definition of "regular full-time employment"
in provision governing reemployment of retirees.
Be it enacted by the Legislature of West Virginia:
That §5-10-2, §5-10-18, §5-10-21, §5-10-24, §5-10-25, §5-10-44
and §5-10-48 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 compensations 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:
Provided, That
when used in the context of compliance with the federal maximum
benefit requirements of Section 415 of the Internal Revenue Code,
"actuarial equivalent" shall be computed using the mortality tables
and interest rates required to comply with those requirements;
(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, rounding to 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 Consolidated Public Retirement System;
(8) "Compensation" means the remuneration paid a member by a
participating public employer for personal services rendered by the
member 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 the remuneration which is not paid in money.
Any lump sum or other
payments paid to members that do not constitute regular salary or
wage payments are not considered compensation for the purpose of
withholding contributions for the system or for the purpose of
calculating a member's final average salary. These payments
include, but are not limited to, attendance or performance bonuses,
one-time flat fee or lump sum payments, payments paid as a result
of excess budget, or employee recognition payments. The board
shall have final power to decide whether the payments shall be
considered compensation for purposes of this article;
(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;
(10) "Credited service" means the sum of a member's prior
service credit, military service credit, workers' compensation
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
an employee of the Legislature whose term of 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
employed during regular sessions or during the interim between
regular sessions in seven or more consecutive calendar years, as
certified by the clerk of the house in which the employee served,
is an employee, any provision to the contrary in this article
notwithstanding, and is entitled to credited service in accordance
with provisions of section fourteen, article ten, chapter five of
this code and:
Provided, however, That members of the legislative
body of any political subdivision and judges of the State Court of
Claims are employees receiving one year of service credit for each
one-year term served and pro rated 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 or of
the West Virginia Code of State Regulations or the relevant provisions of both the West Virginia Code and of the 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 does not constitute
employer error.
(13) "Final average salary" means either of the following:
Provided, That salaries for determining benefits during any
determination period may not exceed the maximum compensation
allowed as adjusted for cost-of-living in accordance with section
seven, article ten-d, chapter five of this code and Section
401(a)(17) of the Internal Revenue Code:
(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 1971 or thereafter), during any
period of three consecutive years of credited service contained
within the member's ten years of credited service immediately
preceding the date his or her employment with a participating
public employer last terminated; or
(B) If the member has less than five years of credited
service, the average of the annual rate of compensation received by
the member during his or her total years of credited service; and
in determining the annual compensation, under either paragraph (A)
or (B) of this subdivision, of a member of the Legislature who participates in the retirement system as a member of the
Legislature in the year 1971, 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 1971, 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
1971, who, in either event, was a member of the Legislature on
November 30, 1968, or November 30, 1969, or November 30, 1970, or
on November 30 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) $1,500 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 paragraph (A) or (B) of this
subdivision, whichever computation produces the higher final
average salary (and in determining the annual compensation under subparagraph (ii) of this proviso, the legislative compensation of
the former member shall be computed on the basis of $1,500
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
$1,500 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, codified at Title 26 of the United States
Code;
(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 has accumulated
contributions standing to his or her credit in the members' deposit
fund;
(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 July 1, 1997, 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 July 1, 1997:
Provided, however, That the Regional Community Policing Institute which participated in the Public Employees Retirement System before
July 1, 2000, 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 July 1,
2000;
(20) "Prior service" means service rendered prior to July 1,
1961, 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 April 1 of the calendar
year following the later of: (A) The calendar year in which the
member attains age seventy and one-half years of age; or (B) the
calendar year in which a member who has attained the age seventy
and one-half years of age and who ceases providing service covered
under this system to a participating employer;
(23) "Retirant" means any member who commences an annuity
payable by the retirement system;
(24) "Retirement" means a member's withdrawal from the employ
of a participating public employer and the commencement of an
annuity 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: (1) Service between July 1,
1961, and the date an employer decides to become a participating
member of the Public Employees Retirement System; (2) service prior
to July 1, 1961, for which the employee is not entitled to prior
service at no cost in accordance with 162 CSR 5.13; and (3) 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 for 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 of a participating
public employer; and
(28) "State" means the State of West Virginia.
§5-10-18. Termination of membership; reentry.
(a) When a member of the retirement system retires, withdraws
his or her accumulated contributions, or dies, he or she ceases to
be a member. When a member leaves the employ of a participating
public employer for any other reason other than retirement or
death, and withdraws his or her accumulated contributions from the
system, he or she ceases to be a member and forfeits service
credited to him or her at that time. If he or she becomes
reemployed by a participating public employer he or she shall be
reinstated as a member of the retirement system and his or her credited service last forfeited by him or her shall be restored to
his or her credit:
Provided, That he or she must be reemployed for
a period of one year or longer to have the service restored:
Provided, however, That he or she returns to the members' deposit
fund the amount, if any, he or she withdrew from the fund, together
with regular interest on the withdrawn amount from the date of
withdrawal to the date of repayment, and that the repayment begins
within two years of the return to employment and that the full
amount is repaid within five years of the return to employment.
Any failure to repay the full amount in accordance with this
section shall be treated as an overpayment or excess contribution
subject to section forty-four of this article.
(b) The Prestera Center for Mental Health Services, Valley
Comprehensive Mental Health Center, Westbrook Health Services and
Eastern Panhandle Mental Health Center, and their successors in
interest, shall provide for their employees a pension plan in lieu
of the Public Employees Retirement System during the existence of
the named mental health centers and their successors in interest.
(c) The administrative bodies of the Prestera Center for
Mental Health Services, Valley Comprehensive Mental Health Center,
Westbrook Health Services and Eastern Panhandle Mental Health
Center shall, on or before May 1, 1997, give written notice to each
employee who is a member of the Public Employees Retirement System
of the option to withdraw from or remain in the system. The notice shall include a copy of this section and a statement explaining the
member's options regarding membership. The notice shall include a
statement in plain language giving a full explanation and actuarial
projection figures in support of the explanation regarding the
individual member's current account balance, vested and nonvested,
and his or her projected return upon remaining in the Public
Employees Retirement System until retirement, disability or death,
in comparison with the projected return upon withdrawing from the
Public Employees Retirement System and joining a private pension
plan provided by the Community Mental Health Center and remaining
therein until retirement, disability or death. The administrative
bodies shall keep in their respective records a permanent record of
each employee's signature confirming receipt of the notice.
(d) Effective the March 1, 2003, and ending December 31, 2004,
any member may purchase credited service previously forfeited by
him or her and the credited service shall be restored to his or her
credit: Provided, That he or she returns to the members' deposit
fund the amount, if any, he or she withdrew from the fund, together
with interest on the withdrawn amount from the date of withdrawal
to the date of repayment at a rate to be determined by the board.
The repayment under this section may be made by lump sum or repaid
over a period of time not to exceed sixty months. Where the member
elects to repay the required amount other than by lump sum, the
member is required to pay interest at the rate determined by the board until all sums are fully repaid.
(e) Effective July 1,2005, and ending December 31 ,2006, any
emergency services personnel may purchase service credit for the
time period beginning January 1, 1990, and ending December 31,
1995: Provided, That person was employed as an emergency service
person in this state for that time period: Provided, however, That
any person obtaining service credit under this subsection is
required to pay the employee's share and the employer's share upon
his or her actual salary for the years in question plus interest at
the assumed actuarial rate of return for the plan year being
repurchased.
(f) Jobs for West Virginia's graduates and their successors in
interest shall provide a pension plan in lieu of the Public
Employees Retirement System for employees hired on or after July 1,
2005.
(g) Wetzel County Hospital and their successors in interest
shall provide a pension plan in lieu of the Public Employees
Retirement System for employees hired on or after July 1, 2005.
§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, is 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 July
1, 2002, any person who becomes a new member of this retirement
system shall, in qualifying for retirement under this section, 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,
is 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;
Provided, That on and after July 1, 2011, any
person who becomes a new member of this retirement system shall, in
qualifying for retirement under this subsection, have five or more
years of service, all of which years shall be actual, contributory
ones. The member's annuity shall begin the first day of the
calendar month immediately following the calendar month in which
his or her application for the annuity is filed with the board.
§5-10-24. Annuity options.
(a) Prior to the effective date of his or her retirement, but
not thereafter except upon the death of a spouse, a member may
elect to receive his or her annuity as a straight life annuity
payable throughout his or her life, or he or she may elect to
receive the actuarial equivalent, at the time, of his or her
straight life annuity in a reduced annuity payable throughout his
or her life, and nominate a beneficiary, in accordance with option
A or B set forth below:
Option A -- Joint and survivor annuity. -- Upon the death of
a retirant who elected option A, his or her reduced annuity shall
be continued throughout the life of and paid to the beneficiary,
having an insurable interest in the retirant's life, whom the
retirant nominated by written designation duly executed and filed
with the Board of Trustees prior to the effective date of his or her retirement; or
Option B -- Modified joint and survivor annuity. -- Upon the
death of a retirant who elected option B, one half of his or her
reduced annuity shall be continued throughout the life of and paid
to the beneficiary, having an insurable interest in the retirant's
life, whom the retirant nominated by written designation duly
executed and filed with the Board of Trustees prior to the
effective date of his or her retirement.
(b) Upon the death of a spouse, a retirant may elect any of
the retirement options offered by the provisions of this section in
an amount adjusted on a fair basis to be of equal actuarial value
as the annuity prospectively in effect relative to the surviving
member retirant at the time the new option is elected.
(c) Upon divorce, a member retirant may elect to change any of
the retirement benefit options offered by the provisions of this
section to a life annuity in an amount adjusted on a fair basis to
be of equal actuarial value of the annuity prospectively in effect
relative to the retirant at the time the option is elected:
Provided, That the retirant furnishes to the board satisfactory
proof of entry of a final decree of divorce or annulment:
Provided, however, That the retirant certifies under penalty of
perjury that no qualified domestic relations order, final decree of
divorce, or other court order that would restrict such an the
election is in effect: Provided further, That no cause of action against the board may then arise or be maintained on the basis of
having permitted the retirant to name a new spouse as annuitant for
any of the survivorship retirement benefit options.
(d) Upon remarriage, a retirant may name the new spouse as an
annuitant for any of the retirement benefit options offered by the
provisions of this section: Provided, That the beneficiary
retirant shall furnish to the board proof of marriage: Provided,
however, That the retirant certifies under penalty of perjury that
no qualified domestic relations order, final decree of divorce or
other court order that would restrict such a the designation is in
effect: Provided further, That no cause of action against the
board may then arise or be maintained on the basis of having
permitted the retirant to name a new spouse as annuitant for any of
the survivorship retirement benefit options. The value of the new
survivorship annuity shall be the actuarial equivalent of the
retirant's benefit prospectively in effect at the time the new
annuity is elected.
§5-10-25. Disability retirement.
(a) Upon the application of a member or former member of the
retirement system, or his or her present or past employing
authority, any member or former member who is in the employ of a
participating public employer or was in the employ of a
participating public employer on a date which is twelve months or
less from the date upon which the former member became incapacitated, who has ten or more years of credited service of
which three years is contributing service, and who becomes totally
and permanently incapacitated for employment, by reason of a
personal injury or disease, may be retired by the board if after a
medical examination of the
said member
or former member made by or
under the direction of a medical committee consisting of two
physicians, one of whom shall be named by the board, and one by the
said member
or former member, the
said medical committee reports,
in writing, to the board that the
said member
or former member is
physically or mentally totally incapacitated for employment, that
such the incapacity will probably be permanent, and that the
said
member
or former member should be retired. In the event the two
above-mentioned examining physicians do not agree in their
findings, then the board may, at its discretion, appoint a third
physician to examine
said the member
or former member and, based
upon the third physician's report in writing, the board may retire
said the member
or former member. A
former member who
has was not
in the employ of been employed by a participating public employer
on a date which is twelve months or less from the date upon which
the member became incapacitated may receive disability retirement
under the provisions of this subsection if, in the opinion of the
medical committee, the incapacity occurred during the time that the
former member was employed by a participating public employer and
the incapacity otherwise qualifies the
former member for retirement under this subsection.
(b) A member with less than ten years of credited service
shall have the service requirement provided for in subsection (a)
above (including the requirement of three years contributing
service) waived in the event: (1) The board finds his or her total
and permanent disability to be the natural and proximate result of
a personal injury or disease arising out of and in the course of
his or her actual performance of duty in the employ of a
participating public employer; and (2) he or she is receiving or
has received workers' compensation benefits on account of such the
physical or mental disability.
(c) For any member or former member retiring and any member
retired, as of March 1, 1997, he or she shall receive a straight
life annuity computed according to section twenty-two hereof and he
or she shall have the right to elect an option provided in section
twenty-four hereof: Provided, That his or her straight life
annuity payable to his or her attainment of age sixty-five years
may not be less than fifty percent of his or her final average
salary; and his or her said straight life annuity payable from and
after his or her attainment of age sixty-five years may not be less
than twenty percent of his or her final average salary: Provided,
however, That his or her said annuity shall be subject to section
twenty-six hereof.
§5-10-44. Correction of errors; underpayments; overpayments.
(a) General rule: If any change or employer error in the
records of any participating public employer or the retirement
system results in any person member, retirant or beneficiary
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. If correction of the error occurs after
the effective retirement date of a retirant, and as far as is
practicable, the board shall adjust the payment of the benefit in
a manner that the actuarial equivalent of the benefit to which the
person retirant was correctly entitled shall be paid.
(b) Underpayments: Any employer error resulting in an
underpayment to the retirement system of required contributions may
be corrected by the employee member or retirant remitting the
required employee contribution and the participating public
employer remitting the required employer contribution. Interest
shall accumulate in accordance with the Legislative Rule 162 CSR 7
concerning retirement board refund, reinstatement and loan interest
factors and any accumulating interest owed on the employee and
employer contributions resulting from the an 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. If the correction of an error involving an underpayment of required contributions to the
retirement system will result in increased payments to a retirant,
including increases to payments already made, any adjustments shall
be made only after the board receives full payment of all required
employee and employer contributions, including interest.
(c) Overpayments: (1) When mistaken or excess employer
contributions, including any overpayments, have been made to the
retirement system by a participating public employer, due to error
or other reason, the board shall credit the participating public
employer with an amount equal to the erroneous contributions, to be
offset against the participating public employer's future liability
for employer contributions to the system. Earnings or interest
shall not be credited to the employer.
(2) When mistaken or excess employee contributions, including
any overpayments, have been made to the retirement system, due to
error or other reason, the board shall have sole authority for
determining the means of return, offset or credit to or for the
benefit of the employee of the amounts, and may use any means
authorized or permitted under the provisions of Section 401(a), et
seq. of the Internal Revenue Code and guidance issued thereunder
applicable to governmental plans. Alternatively, in its full and
complete discretion, the board may require the participating public
employer to pay the employee the amounts as wages, with the board
crediting the participating public employer with a corresponding amount to offset against its future contributions to the plan:
Provided, That the wages paid to the employee shall not be
considered compensation for any purposes under this article.
Earnings or interest shall not be returned, offset, or credited
under any of the means utilized by the board for returning mistaken
or excess employee contributions, including any overpayments, to an
employee.
§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) ôRegularly employed
on a full-time basisö 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
/or requires at least one
thousand forty hours of service per year in that position; (2)
ôtemporary full-time employment or temporary part-time employmentö
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) ôformer
employee of the Legislatureö 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) ôreemployed by
the Legislatureö 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
such the
additional employment,
said 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
such 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
such 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
such 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.
NOTE: The purpose of this bill is to clarify the definition
of compensation for purposes of calculating required contributions
to the system includes only regular salaries, not bonuses or other
one-time payments; clarifying membership in the system does not
terminate upon cessation of employment with a participating public
employer, but rather upon withdrawal of accumulated contributions;
provide a new requirement that individuals first hired after July
1, 2011 must have at least five years of contributory service to
retire under the "rule of eighty"; make technical corrections to
the provision governing annuity options, which previously referred
to members when accurate term is retirants; require retirants
changing annuity options to certify that no final divorce decree or
other court order prohibits the change, to protect alternate payees
and other beneficiaries of the orders; make technical corrections
to the provision governing disability retirement, which referred to
former members, who would not be eligible for any retirement
benefits having left the membership of the system; clarify that the
correction of errors statute applies to both employer errors and
errors of the system's administrative body; provide that the
correction of an error with respect to a retirant already receiving
an annuity may be prospective only; provide a system for the
reimbursement of mistaken contributions that ensures the plan's
continued qualified status; and make technical correction to the
definition of regular full-time employment in the provision
governing reemployment of retirees.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
