Senate Bill No. 166
(By Senators Foster and McCabe)
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[Introduced January 22, 2007; referred to the Committee on
Pensions; and then to the Committee on Finance.]
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A BILL to repeal §5-10-43 of the Code of West Virginia, 1931, as
amended; and to amend and reenact §5-10-26, §5-10-44 and
§5-10-54 of said code, all relating to the Public Employees
Retirement System; removing the requirement that a former
disability retirant no longer disabled must be returned to the
employ of his or her former participating public employer;
permitting administrative hearing before disability retirement
termination; requiring reemployment lists; providing for
preference in hiring; clarifying procedures for reapplication
by disability retirants whose benefits were terminated for
economic causes; clarifying substantial gainful activity;
clarifying right to reapply for regular retirement benefits
after termination of disability benefits; clarifying interest;
requiring termination of benefits gained by false
representation or false records; requiring action to recover
benefits gained by false representation or false records; and
authorizing rules.
Be it enacted by the Legislature of West Virginia:
That §5-10-43 of the Code of West Virginia, 1931, as amended,
be repealed; and that §5-10-26, §5-10-44 and §5-10-54 of said code
be amended and reenacted, all to read as follows:
ARTICLE 10. WEST VIRGINIA PUBLIC EMPLOYEES RETIREMENT ACT.
§5-10-26. Reexamination of disability retirants; reemployment;
adjustment of annuity for earnings.
(a) At least once each year during the first five years
following the retirement of a member on account of disability, as
provided in section twenty-five of this article, and at least once
in each three-year period thereafter, the board may require a
disability retirant, who has not attained age sixty years, to
undergo a medical examination to be made by or under the direction
of a physician designated by the board or to submit a statement
signed by the disability retirant's physician certifying continued
disability, or both, and a copy of the disability
retirants's
retirant's annual statement of earnings. If the retirant refuses
to submit to the medical examination or provide the certification
or statement in any period, his or her disability annuity may be
discontinued by the board until the retirant complies. If the
refusal continues for one year, all the retirant's rights in and to
the annuity may be revoked by the board. If, upon medical
examination of a disability retirant, the physician reports to the
board that the retirant is physically able and capable of resuming
employment with a participating public employer,
the retirant shall
be returned to the employ of the participating public employer from
whose employment he or she retired and his or her disability annuity shall terminate:
Provided, That the board concurs in the
physician's report
and first offers to the disability retirant the
opportunity for an administrative appeal hearing:
Provided,
however, That when the disability retirant's annuity terminates, he
or she is entitled to be placed on a reemployment list which is
maintained by the participating public employer from whose
employment he or she retired and is entitled to a first preference
on that list for any job opening for which he or she meets the
minimum qualifications: Provided further,
That in the event more
than one formerly disabled employee is on the reemployment list,
preference shall be given in the order of seniority on the list,
with first preference given to the person whose disability benefits
were terminated first. The participating public employer shall
maintain the formerly disabled retirant on the reemployment list
indefinitely until he or she accepts employment with the former
employer at a salary substantially similar to that of his or her
position at the time of initially qualifying for disability
retirement or until he or she has declined three offers of
employment at a salary substantially similar to that of his or her
position at the time of initially qualifying for disability
retirement.
(b) A disability retirant who is returned to the employ of a
participating public employer shall again become a member of the
retirement system and the retirant's credited service in force at
the time of his or her retirement shall be restored.
(c) If a review of the disability retirant's annual statement of earnings or other financial information as required by the board
determines that the disability retirant's earned income for the
preceding year exceeds the substantial gainful activity amount as
defined by the United States Social Security Administration, the
disability retirant's annuity shall be terminated by the board,
upon recommendation of the board's disability review committee, on
the first day of the month following the board's action. Any
person who wishes to reapply for disability retirement and whose
disability retirement annuity has been terminated by the board for
exceeding the substantial gainful activity amount may do so within
ninety days of the effective date of termination: by requesting
Provided, That any person reapplying for disability benefits shall
also undergo an examination at the applicant's expense by an
appropriate medical professional chosen by the board.
(d)
(1) A nonblind recipient earning annual income exceeding
the equivalent of nine hundred dollars per month in the year two
thousand seven, after impairment-related work expenses are
subtracted from earnings, has engaged in substantial gainful
activity. A statutorily blind recipient has engaged in substantial
gainful activity in the year two thousand seven if the recipient
has earned annual income exceeding the equivalent of one thousand
five hundred dollars per month after impairment-related work
expenses are subtracted from earnings.
(2) The substantial gainful activity dollar limit shall be
automatically adjusted annually to correspond to the dollar limit
as established and published by the United States Social Security Administration for each year in accordance with methods published
in the Federal Register (FR6582905 December 29, 2000) and similar
methods used by the Social Security Administration applying the
average annual wage index.
(e) Notwithstanding other provisions in this section, any
person whose disability retirement has been terminated by the board
pursuant to this section may apply for regular retirement benefits
upon meeting the eligibility requirements of age and years of
service.
§5-10-44. Correction of errors.
If any change or employer error in the records of any
participating public employer or the retirement system results in
any person 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 person was
correctly entitled shall be paid. Any employer error resulting in
an underpayment to the retirement system may be corrected by the
employee remitting the required employee contribution and the
participating public employer remitting the required employer
contribution. Interest shall accumulate in accordance with 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 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.
§5-10-54. Termination of early retirement benefits; termination of
retirement benefits; procedures.
(a) Whenever the board determines that: (1) Any person has
knowingly made any false statement or falsified or permitted to be
falsified any record or records of the retirement system in an
attempt to defraud the system; or (2) any person who resumes
employment with a governmental entity or accepts, directly or
indirectly, work on a contract basis from a governmental entity,
except as provided for under this article, the board shall terminate
any benefit that person has received, is receiving and is entitled
to receive under the early retirement provisions of this article.
Further, if any person taking early retirement under this article
desires to revoke his or her early retirement incentive, he or she
shall be allowed to do so if he or she is entitled to regular
retirement pursuant to this article: Provided, however, That such
revocation shall be retroactive to the date of last employment and
any incentive annuity, under any incentive option, already received
by the retiree be repaid to the retirement system. Any person who
revokes his or her early retirement incentive shall be thereafter
carried upon the records of the retirement system as a regular
retiree and shall not be entitled to any enhanced benefit by reason
of the early retirement options contained in this article: Provided, however, That any person who chose to retire under the
early retirement provisions of this article who would not have been
and is not eligible for regular retirement but for the early
retirement incentive options must reapply for admission to a
retirement system and repay all pension benefits plus regular
interest which would have been earned by the fund in the period
during which the annuity payments were paid to him or her since the
date his or her employment ceased.
(b) Except as otherwise provided in this section, whenever the
board determines that a person seeking benefits under the provisions
of this article has made false representation of a material fact in
support of applying for or retaining benefits or has falsified or
permitted to be falsified any record or records of the retirement
system in support of benefits, the board shall terminate any present
benefit approved as a result of the false statement or record. In
addition, the board shall initiate appropriate action to recover any
benefits paid by virtue of the false representation.
(c) Any termination of benefits may be appealed pursuant to the
State Administrative Procedures Act in chapter twenty-nine-a of this
code. The board shall promulgate rules and regulations regarding
the procedure for termination of benefits and the repayment of any
benefit in accordance with the provisions of article three, chapter
twenty-nine-a of this code. The board shall propose rules for
legislative approval in accordance with the provisions of article
three of said chapter regarding the procedure for termination of
benefits and the repayment of any benefit.
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(NOTE: The purpose of this bill is to repeal the obsolete
provisions of §5-10-43 on pro rata reduction of annuities; to remove
the requirement that an employee no longer disabled must be returned
to his or her former job; to provide for reemployment; to permit
administrative hearings before disability retirement termination;
to clarify procedures for reapplication by disability retirants
whose benefits were terminated for economic causes; to clarify
reinstatement interest factors; and to specify that the board may
terminate not only early retirement benefits but also regular or
disability retirement benefits of someone who has fraudulently
obtained them, and may act to recover benefits gained by
misrepresentation. Current code establishes misdemeanor jail and
monetary penalties for fraud.
Strike-throughs indicate language that would be stricken from
the present law and underscoring indicates new language that would
be added.)
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