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SB419 SUB1 Senate Bill 419 History

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COMMITTEE SUBSTITUTE

FOR

Senate Bill No. 419

(By Senators Jenkins and McCabe)

____________

[Originating in the Committee on Finance;

reported March 22, 2013.]

____________

 

 

 

A BILL to amend and reenact §18-7A-3, §18-7A-14, §18-7A-17, §18-7A-23, §18-7A-25 and §18-7A-26 of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto a new section, designated §18-7A-14c, all relating to the Teachers Retirement System; specifying the time period in which a participating public employer allocates and reports gross salary to the Consolidated Public Retirement Board; defining terms; correction of errors; requiring nonteachers to file a statement with the Retirement Board detailing the length of service being claimed for retirement credit; clarifying that members granted prior service credit for qualified military service must be honorably discharged from active duty; clarifying provisions for purchasing out-of-state service credit for members who transferred from the Teachers’ Defined Contribution Retirement System; providing that a nonteaching member shall not be considered absent from service while serving as an officer with a statewide professional teaching association; requiring that members make written requests to the Retirement Board to receive credit for service previously credited by the Public Employees Retirement System; providing that all interest paid or transferred on service credit from the Public Employees Retirement System be deposited in the reserve fund; providing that an inactive member may elect to receive an annuity at age sixty; providing that the sole primary beneficiary of a member is eligible for an annuity if the contributor was fifty years old with twenty-five years’ service; providing that a refund beneficiary shall receive the contributor’s accumulated contributions up to the plan year of contributor’s death; providing that a refund beneficiary shall be paid the Teachers’ Defined Contribution Retirement System member contributions transferred plus the vested portion of employer contributions and any earnings; providing that an actively contributing member who is at least sixty years of age is eligible for an annuity; providing that any member who has thirty years of total service in the state as a nonteaching member is eligible for an annuity; specifying that anyone who becomes a new member on or after July 1, 2013, must have five or more years of contributory service to qualify for retirement; providing that a nonteaching member who is fifty-five years of age and has served thirty years in the state is eligible for an annuity; clarifying that a nonteaching member is eligible for disability benefits; clarifying the computation of a member’s annuity; providing for the commencement date of disability annuity benefits; and making technical corrections.

Be it enacted by the Legislature of West Virginia:

    That §18-7A-3, §18-7A-14, §18-7A-17, §18-7A-23, §18-7A-25 and §18-7A-26 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that said code be amended by adding thereto a new section, designated §18-7A-14c, all to read as follows:

ARTICLE 7A. STATE TEACHERS RETIREMENT SYSTEM.

§18-7A-3. Definitions.

    As used in this article, unless the context clearly requires a different meaning:

    (1) "Accumulated contributions" means all deposits and all deductions from the gross salary of a contributor plus regular interest.

    (2) "Accumulated net benefit" means the aggregate amount of all benefits paid to or on behalf of a retired member.

    (3) "Actuarially equivalent" or "of equal actuarial value" means a benefit of equal value computed upon the basis of the mortality table and interest rates as set and adopted by the Retirement Board in accordance with the provisions of this article: Provided, That when used in the context of compliance with the federal maximum benefit requirements of Section 415 of the Internal Revenue Code, "actuarially equivalent" shall be computed using the mortality tables and interest rates required to comply with those requirements.

    (4) "Annuities" means the annual retirement payments for life granted beneficiaries in accordance with this article.

    (5) "Average final salary" means the average of the five highest fiscal year salaries earned as a member within the last fifteen fiscal years of total service credit, including military service as provided in this article, or if total service is less than fifteen years, the average annual salary for the period on which contributions were made: 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.

    (6) "Beneficiary" means the recipient of annuity payments made under the retirement system.

    (7) "Contributor" means a member of the retirement system who has an account in the teachers accumulation fund.

    (8) "Deposit" means a voluntary payment to his or her account by a member.

    (9) "Employer" means the agency of and within the state which has employed or employs a member.

    (10) "Employer error" means an omission, misrepresentation or violation of relevant provisions of the West Virginia Code this code or of the West Virginia Code of State Regulations Rules 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 required contributions required. A deliberate act contrary to the provisions of this section by a participating public employer does not constitute employer error.

    (11) "Employment term" means employment for at least ten months, a month being defined as twenty employment days.

    (12) "Gross salary" means the fixed annual or periodic cash wages paid by a participating public employer to a member for performing duties for the participating public employer for which the member was hired. Gross salary shall be allocated and reported in the fiscal year in which the work was done. Gross salary also includes retroactive payments made to a member to correct a clerical error, or made pursuant to a court order or final order of an administrative agency charged with enforcing federal or state law pertaining to the member's rights to employment or wages, with all retroactive salary payments to be allocated to and considered paid in the periods in which the work was or would have been done. Gross salary does not include lump sum payments for bonuses, early retirement incentives, severance pay or any other fringe benefit of any kind including, but not limited to, transportation allowances, automobiles or automobile allowances, or lump sum payments for unused, accrued leave of any type or character.

    (13) "Internal Revenue Code" means the Internal Revenue Code of 1986, as it has been amended.

    (14) "Member" means any person who has accumulated contributions standing to his or her credit in the state Teachers Retirement System. A member shall remain a member until the benefits to which he or she is entitled under this article are paid or forfeited, or until cessation of membership pursuant to section thirteen of this article.

    (15) "Members of the administrative staff of the public schools" means deans of instruction, deans of men, deans of women, and financial and administrative secretaries.

    (16) "Members of the extension staff of the public schools" means every agricultural agent, boys' and girls' club agent and every member of the agricultural extension staff whose work is not primarily stenographic, clerical or secretarial.

    (17) "New entrant" means a teacher who is not a present teacher.

    (18) "Nonteaching member" means any person, except a teacher member, who is regularly employed for full-time service by: (A) Any county board of education; (B) the State Board of Education; (C) the Higher Education Policy Commission; (D) the West Virginia Council for Community and Technical College Education; or (E) a governing board, as defined in section two, article one, chapter eighteen-b of this code: Provided, That any person whose employment with the Higher Education Policy Commission, the West Virginia Council for Community and Technical College Education or a governing board commences on or after July 1, 1991, is not considered a nonteaching member.

    (19) "Plan year" means the twelve-month period commencing on July 1 and ending the following June 30 of any designated year.

    (20) "Present member" means a present teacher or nonteacher who is a member of the retirement system.

    (21) "Present teacher" means any person who was a teacher within the thirty-five years beginning July 1, 1934, and whose membership in the retirement system is currently active.

    (22) "Prior service" means all service as a teacher completed prior to July 1, 1941, and all service of a present member who was employed as a teacher, and did not contribute to a retirement account because he or she was legally ineligible for membership during the service.

    (23) "Public schools" means all publicly supported schools, including colleges and universities in this state.

    (24) "Refund beneficiary" means the estate of a deceased contributor or a person he or she has nominated as beneficiary of his or her contributions by written designation duly executed and filed with the Retirement Board.

    (25) "Refund interest" means interest compounded, according to the formula established in legislative rules, series seven of the Consolidated Public Retirement Board, 162 CSR 7.

    (26) (25) "Regular interest" means interest at four percent compounded annually, or a higher earnable rate if set forth in the formula established in legislative rules, series seven of the Consolidated Public Retirement Board board’s Rule, Refund, Reinstatement, Retroactive Service, Loan and Employer Error Interest Factors, 162 CSR 7.

    (27) (26) "Regularly employed for full-time service" means employment in a regular position or job throughout the employment term regardless of the number of hours worked or the method of pay.

    (28) (27) "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; or (B) the calendar year in which the member retires or ceases covered employment under the system after having attained the age of seventy and one-half years.

    (28) “Retirant” means any member who commences an annuity payable by the retirement system.

    (29) “Retirement board” means the Consolidated Public Retirement Board created pursuant to article ten-d, chapter five of this code.

    (29) (30) "Retirement system" means the State Teachers Retirement System established by this article.

    (30) (31) "Teacher member" means the following persons, if regularly employed for full-time service: (A) Any person employed for instructional service in the public schools of West Virginia; (B) principals; (C) public school librarians; (D) superintendents of schools and assistant county superintendents of schools; (E) any county school attendance director holding a West Virginia teacher's certificate; (F) the executive director of the retirement board; (G) members of the research, extension, administrative or library staffs of the public schools; (H)(G) the State Superintendent of Schools, heads and assistant heads of the divisions under his or her supervision or any other employee under the state superintendent performing services of an educational nature; (I) (H) employees of the State Board of Education who are performing services of an educational nature; (J) (I) any person employed in a nonteaching capacity by the State Board of Education, any county board of education, the State Department of Education or the State Teachers Retirement Board, if that person was formerly employed as a teacher in the public schools; (K) (J) all classroom teachers, principals and educational administrators in schools under the supervision of the Division of Corrections, the Division of Health or the Division of Human Services; (L) (K) an employee of the State Board of School Finance, if that person was formerly employed as a teacher in the public schools; and (M) (L) any person designated as a 21st Century Learner Fellow pursuant to section eleven, article three, chapter eighteen-a of this code who elects to remain a member of the State Teachers Retirement System provided in this article.

    (31) (32) "Total service" means all service as a teacher or nonteacher while a member of the retirement system since last becoming a member and, in addition thereto, credit for prior service, if any.

    Age in excess of seventy years shall be considered to be seventy years.

§18-7A-14. Contributions by members; contributions by employers; correction of errors; forfeitures.

    (a) At the end of each month every member of the retirement system shall contribute six percent of that member's monthly gross salary to the retirement board: Provided, That any member employed by a state institution of higher education shall contribute on the member's full earnable compensation, unless otherwise provided in section fourteen-a of this article. The sums are due the State Teachers Retirement System at the end of each calendar month in arrears and shall be paid not later than fifteen days following the end of the calendar month. Each remittance shall be accompanied by a detailed summary of the sums withheld from the compensation of each member for that month on forms, either paper or electronic, provided by the State Teachers Retirement System for that purpose.

    (b) Annually, the contributions of each member shall be credited to the member's account in the State Teachers Retirement System Fund. The contributions shall be deducted from the salaries of the members as prescribed in this section and every member shall be considered to have given consent to the deductions. No deductions, however, shall be made from the earnable compensation of any member who retired because of age or service and then resumed service unless as provided in section thirteen-a of this article.

    (c) The aggregate of employer contributions, due and payable under this article, shall equal annually the total deductions from the gross salary of members required by this section. Beginning July 1, 1994, the rate shall be seven and one-half percent; beginning on July 1, 1995, the rate shall be nine percent; beginning on July 1, 1996, the rate shall be ten and one-half percent; beginning on July 1, 1997, the rate shall be twelve percent; beginning on July 1, 1998, the rate shall be thirteen and one-half percent; and beginning on July 1, 1999, and thereafter, the rate shall be fifteen percent: Provided, That the rate shall be seven and one-half percent for any individual who becomes a member of the State Teachers Retirement System for the first time on or after July 1, 2005, or any individual who becomes a member of the State Teachers Retirement System as a result of the voluntary transfer contemplated in article seven-d of this chapter.

    (d) Payment by an employer to a member of the sum specified in the employment contract minus the amount of the employee's deductions shall be considered to be a full discharge of the employer's contractual obligation as to earnable compensation.

    (e) Each contributor shall file with the retirement board or with the employer to be forwarded to the retirement board an enrollment form showing the contributor's date of birth and other data needed by the retirement board.

    (f) If any change or employer error in the records of any participating public employer or the retirement system results in any member receiving from the system more or less than he or she would have been entitled to receive had the records been correct, the board shall correct the error, and as far as is practicable shall adjust the payment of the benefit in a manner that the actuarial equivalent of the benefit to which the member was correctly entitled shall be paid. Any employer error resulting in an underpayment to the retirement system may be corrected by the member remitting the required employee contribution and the participating public employer remitting the required employer contribution. Interest shall accumulate in accordance with the legislative rule, Retirement Board Reinstatement Interest, 162 CSR 7, and any accumulating interest owed on the employee and employer contributions resulting from the 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.

    (g) (f) Notwithstanding any other provisions of this article, forfeitures under the retirement system shall not be applied to increase the benefits any member would otherwise receive under the retirement system.

§18-7A-14c. Correction of errors; underpayments; overpayments.

    (a) General rule: If any change or employer error in the records of any employer or the retirement system results in any member, retirant or beneficiary receiving from the plan more or less than he or she would have been entitled to receive had the records been correct, the retirement 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 retirement board shall adjust the payment of the benefit in a manner that the actuarial equivalent of the benefit to which the retirant was correctly entitled shall be paid.

    (b) Underpayments: Any error resulting in an underpayment to the retirement system of required contributions may be corrected by the member or retirant remitting the required member contribution and the employer remitting the required employer contribution. Interest shall accumulate in accordance with the board’s Rule, Refund, Reinstatement, Retroactive Service, Loan and Employer Error Interest Factors, 162 CSR 7, concerning retirement board refund, reinstatement, retroactive service, loan and employer error interest factors and any accumulating interest owed on the member and employer contributions resulting from an employer error is the responsibility of the employer. The employer may remit total payment and the member reimburse the 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 retirement board receives full payment of all required member 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 an employer, due to error or other reason, the retirement board shall credit the employer with an amount equal to the erroneous contributions, to be offset against the employer's future liability for employer contributions to the retirement system. Earnings or interest shall not be credited to the employer.

    (2) When mistaken or excess member contributions, including any overpayments, have been made to the retirement system, due to error or other reason, the retirement board has sole authority for determining the means of return, offset or credit to or for the benefit of the member 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 retirement board may require the employer to pay the member the amounts as wages, with the retirement board crediting the employer with a corresponding amount to offset against its future contributions to the retirement system: Provided, That the wages paid to the member 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 used by the retirement board for returning mistaken or excess member contributions, including any overpayments, to a member.

§18-7A-17. Statement and computation of teachers' service; qualified military service.

    (a) Under rules adopted by the retirement board, each teacher and nonteaching member shall file a detailed statement of his or her length of service as a teacher or nonteacher for which he or she claims credit. The retirement board shall determine what part of a year is the equivalent of a year of service. In computing the service, however, it shall credit no period of more than a month's duration during which a member was absent without pay, nor shall it credit for more than one year of service performed in any calendar year.

    (b) For the purpose of this article, the retirement board shall grant prior service credit to new entrants and other members of the retirement system for who were honorably discharged from active duty service in any of the armed forces of the United States in any period of national emergency within which a federal Selective Service Act was in effect. For purposes of this section, "armed forces" includes Women's Army Corps, women's appointed volunteers for emergency service, Army Nurse Corps, SPARS, Women's Reserve and other similar units officially parts of the military service of the United States. The military service is considered equivalent to public school teaching, and the salary equivalent for each year of that service is the actual salary of the member as a teacher for his or her first year of teaching after discharge from military service. Prior service credit for military service shall not exceed ten years for any one member, nor shall it exceed twenty-five percent of total service at the time of retirement. Notwithstanding the preceding provisions of this subsection, contributions, benefits and service credit with respect to qualified military service shall be provided in accordance with Section 414(u) of the Internal Revenue Code. For purposes of this section, "qualified military service" has the same meaning as in Section 414(u) of the Internal Revenue Code. The retirement board is authorized to shall determine all questions and make all decisions relating to this section and, pursuant to the authority granted to the retirement board in section one, article ten-d, chapter five of this code, may promulgate rules relating to contributions, benefits and service credit to comply with Section 414(u) of the Internal Revenue Code. No Military service credit may not be used in more than one retirement system administered by the Consolidated Public Retirement Board.

    (c) For service as a teacher in the employment of the federal government, or a state or territory of the United States, or a governmental subdivision of that state or territory, the retirement board shall grant credit to the member: Provided, That the member shall pay to the system double the amount he or she contributed twelve percent of that member’s gross salary earned during the first full year of current employment whether a member of the Teachers’ Retirement System or the Teachers’ Defined Contribution Retirement System, times the number of years for which credit is granted, plus interest at a rate to be determined by the retirement board. The interest shall be deposited in the reserve fund and service credit granted at the time of retirement shall not exceed the lesser of ten years or fifty percent of the member's total service as a teacher in West Virginia. Any transfer purchase of out-of-state service, as provided in this article, shall not be used to establish eligibility for a retirement allowance and the retirement board shall grant credit for the transferred purchased service as additional service only: Provided, however, That a transfer purchase of out-of-state service is prohibited if the service is used to obtain a retirement benefit from another retirement system: Provided further, That salaries paid to members for service prior to entrance into the retirement system shall not be used to compute the average final salary of the member under the retirement system.

    (d) Service credit for members or retired members shall not be denied on the basis of minimum income rules promulgated by the Teachers’ Retirement Board: Provided, That the member or retired member shall pay to the system the amount he or she would have contributed during the year or years of public school service for which credit was denied as a result of the minimum income rules of the Teachers Retirement Board.

    (e) (d) No members shall A member shall not be considered absent from service while serving as a member or employee of the Legislature of the State of West Virginia during any duly constituted session of that body or while serving as an elected member of a county commission during any duly constituted session of that body.

    (f) (e) No members shall A member shall not be considered absent from service as a teacher or nonteacher while serving as an officer with a statewide professional teaching association, or who has served in that capacity, and no retired teacher retirant, who served in that capacity while a member, shall be considered to have been absent from service as a teacher by reason of that service: Provided, That the period of service credit granted for that service shall not exceed ten years: Provided, however, That a member or retired teacher retirant who is serving or has served as an officer of a statewide professional teaching association shall make deposits to the Teachers Retirement Board System, for the time of any absence, in an amount double the amount which he or she would have contributed in his or her regular assignment for a like period of time.

    (g) (f) The Teachers Retirement Board System shall grant service credit to any former or present member of the West Virginia Public Employees Retirement System who has been a contributing member of the Teachers’ Retirement System for more than three years, for service previously credited by the Public Employees Retirement System upon his or her written request and: (1) Shall require the transfer of the member's Public Employees Retirement System accumulated contributions to the Teachers Retirement System; or (2) shall require a repayment of the amount withdrawn from the Public Employees Retirement System, plus interest at a rate to be determined by the retirement board, compounded annually from the date of withdrawal to the date of payment, any time prior to the member's effective retirement date: Provided, That there shall be added by the member to the amounts transferred or repaid under this subsection an amount which shall be sufficient to equal the contributions he or she would have made had the member been under the Teachers Retirement System during the period of his or her membership in the Public Employees Retirement System. plus interest at a rate to be determined by the board compounded annually from the date of withdrawal to the date of payment The All interest paid or transferred shall be deposited in the reserve fund.

    (h) (g) For service as a teacher in an elementary or secondary parochial school, located within this state and fully accredited by the West Virginia Department of Education, the retirement board shall grant credit to the member: Provided, That the member shall pay to the system double the amount contributed twelve percent of that member’s gross salary earned during the first full year of current employment whether a member of the Teachers’ Retirement System or the Teachers’ Defined Contribution Retirement System, times the number of years for which credit is granted, plus interest at a rate to be determined by the retirement board. The interest shall be deposited in the reserve fund and service granted at the time of retirement shall not exceed the lesser of ten years or fifty percent of the member's total service as a teacher in the West Virginia public school system. Any transfer of parochial school service, as provided in this section, may not be used to establish eligibility for a retirement allowance and the retirement board shall grant credit for the transfer as additional service only: Provided, however, That a transfer of parochial school service is prohibited if the service is used to obtain a retirement benefit from another retirement system.

    (i) (h) Active members who previously worked in CETA (Comprehensive Employment and Training Act) may receive service credit for time served in that capacity: Provided, That in order to receive service credit under the provisions of this subsection the following conditions must be met: (1) The member must have moved from temporary employment with the participating employer to permanent full-time employment with the participating employer within one hundred twenty days following the termination of the member's CETA employment; (2) the retirement board must receive evidence that establishes to a reasonable degree of certainty as determined by the retirement board that the member previously worked in CETA; and (3) the member shall pay to the retirement board an amount equal to the employer and employee contribution plus interest at the amount set by the retirement board for the amount of service credit sought pursuant to this subsection: Provided, however, That the maximum service credit that may be obtained under the provisions of this subsection is two years: Provided further, That a member must apply and pay for the service credit allowed under this subsection and provide all necessary documentation by March 31, 2003: And provided further, That the retirement board shall exercise due diligence to notify affected employees of the provisions of this subsection.

    (j) (i) If a member is not eligible for prior service credit or pension as provided in this article, then his or her prior service shall not be considered a part of his or her total service.

    (k) (j) A member who withdrew from membership may regain his or her former membership rights as specified in section thirteen of this article only in case he or she has served two years since his or her last withdrawal.

    (l) (k) Subject to the provisions of subsections (a) through (l), inclusive, of this section, the retirement board shall verify as soon as practicable the statements of service submitted. The retirement board shall issue prior service certificates to all persons eligible for the certificates under the provisions of this article. The certificates shall state the length of the prior service credit, but in no case shall the prior service credit exceed forty years.

    (m) (l) Notwithstanding any provision of this article to the contrary, when a member is or has been elected to serve as a member of the Legislature, and the proper discharge of his or her duties of public office require that member to be absent from his or her teaching or administrative duties, the time served in discharge of his or her duties of the legislative office are shall be credited as time served for purposes of computing service credit: Provided, That the retirement board may not require any additional contributions from that member in order for the retirement board to credit him or her with the contributing service credit earned while discharging official legislative duties: Provided, however, That nothing in this section may be construed to relieve the employer from making the employer contribution at the member's regular salary rate or rate of pay from that employer on the contributing service credit earned while the member is discharging his or her official legislative duties. These employer payments shall commence as of June 1, 2000: Provided further, That any member to which the provisions of this subsection apply may elect to pay to the retirement board an amount equal to what his or her contribution would have been for those periods of time he or she was serving in the Legislature. The periods of time upon which the member paid his or her contribution shall then be included for purposes of determining his or her final average salary as well as for determining years of service: And provided further, That a member using the provisions of this subsection is not required to pay interest on any contributions he or she may decide to make.

    (n) (m) The Teachers Retirement Board System shall grant service credit to any former member of the State Police Death, Disability and Retirement System who has been a contributing member for more than three years, for service previously credited by the State Police Death, Disability and Retirement System; and: (1) Shall require the transfer of the member's contributions to the Teachers Retirement System; or (2) shall require a repayment of the amount withdrawn any time prior to the member's retirement: Provided, That the member shall add to the amounts transferred or repaid under this paragraph an amount which is sufficient to equal the contributions he or she would have made had the member been under the Teachers Retirement System during the period of his or her membership in the State Police Death, Disability and Retirement System plus interest at a rate to be determined by the retirement board compounded annually from the date of withdrawal to the date of payment. The interest paid shall be deposited in the reserve fund.

§18-7A-23. Withdrawal and death benefits.

    (a) Benefits upon withdrawal from service prior to retirement under the provisions of this article shall be as follows:

    (1) A contributor who withdraws from service for any cause other than death, disability or retirement shall, upon application, be paid his or her accumulated contributions up to the end of the fiscal year preceding the year in which application is made, after offset of any outstanding loan balance, plus accrued loan interest, pursuant to section thirty-four of this article. but In no event shall interest be paid beyond the end of five years following the year in which the last contribution was made: Provided, That the contributor, at the time of application, is then no longer under contract, verbal or otherwise, to serve as a teacher; or

    (2) If the contributor an inactive member has completed twenty years of total service, he or she may elect to receive at retirement age sixty an annuity which shall be computed as provided in this article: Provided, That if the contributor inactive member has completed at least five, but fewer than twenty, years of total service in this state, he or she may elect to receive at age sixty-two an annuity which shall be computed as provided in this article. The contributor inactive member must notify the retirement board in writing concerning the election. If the contributor inactive member has completed fewer than five years of service in this state, he or she shall be is subject to the provisions as outlined in subdivision (1) of this subsection.

    (b) Benefits upon the death of a contributor prior to retirement under the provisions of this article shall be paid as follows:

    (1) If the contributor was at least fifty years old and if his or her total service as a teacher or nonteaching member was at least twenty-five years at the time of his or her death, then the surviving spouse of the deceased, provided the spouse is designated as the sole primary refund beneficiary, is eligible for an annuity computed as though the deceased were actually a retired teacher retirant at the time of death and had selected a survivorship option which pays the spouse the same monthly amount which would have been received by the deceased; or

    (2) If the facts do not permit payment under subdivision (1) of this subsection, then the following sum shall be paid to the refund beneficiary of the contributor: (A) The contributor's accumulated contributions up to the plan year of his or her death plus an amount equal to his or her employee member contributions. Provided, That the latter sum shall emanate from the Employer's Accumulation Fund; and (B) the refund beneficiary of any individual who became a member of the retirement system as a result of the voluntary transfer contemplated in article seven-d of this chapter shall also be paid the member contributions plus the vested portion of employer contributions made on his or her behalf to the Teachers’ Defined Contribution Retirement System, plus any earnings thereon, as of June 30, 2008, as stated by the retirement board.

§18-7A-25. Eligibility for retirement allowance.

    (a) Any actively contributing member who has attained the age of sixty years or any member who has had thirty-five years of total service as a teacher or nonteaching member in West Virginia, regardless of age, is eligible for an annuity. No A new entrant nor or a present member is not eligible for an annuity, however, if either he or she has less than five years of service to his or her credit: Provided, That on and after July 1, 2013, 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 contributory service, all of which shall be actual, contributory ones.

    (b) Any member who has attained the age of fifty-five years and who has served thirty years as a teacher or nonteaching member in West Virginia is eligible for an annuity.

    (c) Any member who has served at least thirty, but less than thirty-five years, as a teacher or nonteaching member in West Virginia and is less than fifty-five years of age is eligible for an annuity. but However, the annuity shall be the reduced actuarial equivalent of the annuity the member would have received if the member were age fifty-five at the time such the annuity was applied for.

    (d) The request for any annuity shall be made by the member in writing to the retirement board, but in case of retirement for disability, the written request may be made by either the member or the employer.

    (e) A member is eligible for annuity for disability if he or she satisfies the conditions in either subdivision (1) or (2) of this subsection and meets the conditions of subdivision (3) of this subsection as follows:

    (1) His or her service as a teacher or nonteaching member in West Virginia must total at least ten years and service as a teacher or nonteaching member must have been terminated because of disability, which disability must have caused absence from service for at least six months before his or her application for a disability annuity is approved.

    (2) His or her service as a teacher or nonteaching member in West Virginia must total at least five years and service as a teacher or nonteaching member must have been terminated because of disability, which disability must have caused absence from service for at least six months before his or her application for disability annuity is approved. and The disability is must be a direct and total result of an act of student violence directed toward the member.

    (3) An examination by a physician or physicians selected by the retirement board must show that the member is at the time mentally or physically incapacitated for service as a teacher or nonteaching member, that for that service the disability is total and likely to be permanent and that he or she should be retired in consequence of the disability.

    (f) Continuance of the disability of the retired member retirant shall be established by medical examination, as prescribed in subdivision (3), subsection (e) of this section, annually for five years after retirement, and thereafter at such times required by the retirement board. Effective July 1, 1998, a member who has retired because of a disability may select an option of payment under the provisions of section twenty-eight of this article: Provided, That any option selected under the provisions of section twenty-eight of this article shall be in all respects the actuarial equivalent of the straight life annuity benefit the disability retiree retirant receives or would receive if the options under said section were not available and that no beneficiary or beneficiaries of the disability annuitant retirant may receive a greater benefit, nor receive any benefit for a greater length of time, than the beneficiary or beneficiaries would have received had the disability retiree retirant not made any election of the options available under said section. In determining the actuarial equivalence, the retirement board shall take into account the life expectancies of the member and the beneficiary: Provided, however, That the life expectancies may at the discretion of the retirement board be established by an underwriting medical director of a competent insurance company offering annuities. Payment of the disability annuity provided in this article shall cease immediately if the retirement board finds that the disability of the retired teacher retirant no longer exists, or if the retired teacher retirant refuses to submit to medical examination as required by this section.

§18-7A-26. Computation of annuities.

    (a) Annuitants Retirants whose annuities were approved by the retirement board effective before July 1, 1980, shall be paid the annuities which were approved by the retirement board.

    (b) Annuities approved by the retirement board effective after June 30, 1980, shall be computed as provided in this section.

    (c) Upon establishment of eligibility for a retirement allowance, a member shall be granted an annuity which shall be the sum of the following two percent of the member’s average salary multiplied by his or her total service credit, subject to reduction if necessary to comply with the maximum benefit provisions of Section 415 of the Internal Revenue Code and section twenty-eight-a of this article.

    (1) Two percent of the member's average salary multiplied by his or her total service credit as a teacher. In this subdivision subsection "average salary" means the average of the highest annual salaries received by the member during any five plan years contained within his or her last fifteen years of total service credit: Provided, That the highest annual salary used in this calculation for certain members employed by the West Virginia Higher Education Policy Commission under its control shall be $4,800, as provided by section fourteen-a of this article.

    (2) The actuarial equivalent of the voluntary deposits of the member in his or her individual account up to the time of his or her retirement, with regular interest.

    (d) The disability annuities of all teachers retired for disability disabled retirants shall be based upon a disability table prepared by a competent actuary approved by the retirement board. Disability annuity benefits will begin the first day of the month following the latter of: (1) Six months of absence caused by the disability; (2) the date of a written report by a physician selected by the retirement board stating the member is mentally or physically incapacitated for service and that the disability is total and likely to be permanent; or (3) termination of employment.

    (e) Upon the death of an annuitant a retirant who qualified for an annuity as the surviving spouse of an active member or because of permanent disability, the estate of the deceased or beneficiary designated for such purpose shall be paid the difference, if any, between the member's contributions with regular interest thereon, and the sum of the annuity payments. Upon the death of a spouse who was named as the member's survivor, a retirant may elect an annuity option approved by the retirement board 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 at the time the new option is elected.

    (f) All annuities shall be paid in twelve monthly payments. In computing the monthly payments, fractions of a cent shall be considered a cent. The monthly payments shall cease with the payment for the month within which the beneficiary dies, and shall begin with the payment for the month succeeding the month within which the annuitant retirant became eligible under this article for the annuity granted. In no case, however, shall an annuitant a retirant receive more than four monthly payments which are retroactive after the retirement board receives his or her application for annuity. The monthly payments shall be made on the twenty-fifth day of each month, except the month of December, when the payment shall be made on December 18. If the date of payment falls on a holiday, Saturday or Sunday, then the payment shall be made on the preceding workday.

    (g) In case the retirement board receives data affecting the approved annuity of a retired teacher retirant, the annuity shall be changed in accordance with the data, the change being effective with the payment for the month within which the retirement board received the new data.

    (h) Any person who has attained the age of sixty-five and who has served at least twenty-five years as a teacher or nonteacher prior to July 1, 1941, is eligible for prior service credit and for prior service pensions as prescribed in this section.

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