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Key: Green = existing Code. Red = new code to be enacted
Senate Bill No. 430
(By Senators Jenkins and McCabe)
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[Introduced March 4, 2013; referred to the Committee on Pensions;
and then to the Committee on Finance .]
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A BILL to amend and reenact §18-7B-2 of the Code of West Virginia,
1931, as amended; and to amend said code by adding thereto a
new section, designated §18-7B-21, all relating to the
Teachers' Defined Contribution Retirement System; adding a
definition of "employment term"; making a technical
correction; and adding a provision relating to correction of
errors by participating public employers and the Consolidated
Public Retirement Board.
Be it enacted by the Legislature of West Virginia:
That §18-7B-2 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 §18-7B-21, all to read as
follows:
ARTICLE 7B. TEACHERS' DEFINED CONTRIBUTION RETIREMENT SYSTEM.
§18-7B-2. Definitions.
As used in this article, unless the context clearly requires
a different meaning:
(1) "Annual addition" means, for purposes of the limitations
under Section 415(c) of the Internal Revenue Code, the sum credited
to a member's account for any limitation year of: (A) Employer
contributions; (B) employee contributions; and (C) forfeitures.
Repayment of cashouts or contributions as described in Section
415(k)(3) of the Internal Revenue Code, rollover contributions and
picked-up employee contributions to a defined benefit plan shall
not be treated as annual additions, consistent with the
requirements of Treasury Regulation §1.415(c)-1.
(2) "Annuity account" or "annuity" means an account
established for each member to record the deposit of member
contributions and employer contributions and interest, dividends or
other accumulations credited on behalf of the member;
(3) "Compensation" means the full compensation actually
received by members for service whether or not a part of the
compensation is received from other funds, federal or otherwise,
than those provided by the state or its subdivisions: Provided,
That annual compensation for determining contributions 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: Provided, however, That solely for purposes of applying the limitations of Section 415 of
the Internal Revenue Code to any annual addition, "compensation"
shall have the meaning given it in subsection (d), section thirteen
of this article.
(4) "Consolidated board" or "board" means the Consolidated
Public Retirement Board created and established pursuant to article
ten-d, chapter five of this code;
(5) "Defined contribution system" or "system" means the
Teachers' Defined Contribution Retirement System created and
established by this article;
(6) "Employer" means the agency of and within the State of
West Virginia which has employed or employs a member;
(7) "Employer contribution" means an amount deposited into the
member's individual annuity account on a periodic basis coinciding
with the employee's regular pay period by an employer from its own
funds;
(8) "Employment term" means employment for at least ten
months, a month being defined as twenty employment days;
____(8)(9) "Existing employer" means any employer who employed or
employs a member of the existing retirement system;
(9) (10) "Existing retirement system" means the State Teachers
Retirement System established in article seven-a of this chapter;
(10) (11) "Internal Revenue Code" means the Internal Revenue
Code of 1986, as it has been amended;
(11) (12) "Member" or "employee" 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) members of the research,
extension, administrative or library staffs of the public schools;
(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; (H) employees of the State Board of Education
who are performing services of an educational nature; (I) any
person employed in a nonteaching capacity by the State Board of
Education, any county board of education or the State Department of
Education if that person was formerly employed as a teacher in the
public schools; (J) all classroom teachers, principals and
educational administrators in schools under the supervision of the
Division of Corrections and the Department of Health and Human
Resources; (K) any person who is regularly employed for full-time
service by any county board of education or the State Board of
Education; (L) the administrative staff of the public schools
including deans of instruction, deans of men and deans of women,
and financial and administrative secretaries; and (M) 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 Teachers' Defined Contribution Retirement
System established by this article;
(12) (13) "Member contribution" means an amount reduced from
the employee's regular pay periods, and deposited into the member's
individual annuity account within the Teachers' Defined
Contribution Retirement System;
(13) (14) "Permanent, total disability" means a mental or
physical incapacity requiring absence from employment service for
at least six months: Provided, That the incapacity is shown by an
examination by a physician or physicians selected by the board:
Provided, however, That for employees hired on or after July 1,
2005, permanent, total disability means an inability to engage in
substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to
result in death, or has lasted or can be expected to last for a
continuous period of not less than twelve months and the incapacity
is so severe that the member is likely to be permanently unable to
perform the duties of the position the member occupied immediately
prior to his or her disabling injury or illness;
(14) (15) "Plan year" means the twelve-month period commencing
on July 1 of any designated year and ending on the following June
30;
(15) (16) "Public schools" means all publicly supported
schools, including normal schools, colleges and universities in
this state;
(16) (17) "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;
(17) (18) "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 otherwise ceases
employment with a participating employer after having attained the
age of seventy and one-half years;
(18) (19) "Retirement" means a member's withdrawal from the
active employment of a participating employer and completion of all
conditions precedent to retirement;
(19) (20) "Year of employment service" means employment for at
least ten months, a month being defined as twenty employment days:
Provided, That no more than one year of service may be accumulated
in any twelve-month period.
§18-7B-21. Correction of errors; underpayments; overpayments.
(a) General rule. -- If any change or employer error in the
records of any existing employer or the retirement system results
in a 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 retirement the board shall
adjust the payment of the benefit in an amount computed by the
board to which the retirant was correctly entitled.
(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 employee
contribution and the existing employer remitting the required
employer contribution. Interest accumulates in accordance with the
Legislative Rule 162 CSR 7 concerning retirement board refund,
reinstatement, retroactive service, loan and employer error
interest factors and any accumulating interest owed on the employee
and employer contributions resulting from an employer error is the
responsibility of the participating public employer. The existing
employer may remit total payment and the employee may reimburse the
existing 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 may 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 an existing employer, due to error or other
reason, the board shall credit the existing employer with an amount
computed by the board, to be offset against the existing employer's
future liability for employer contributions to the system.
(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 has 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 existing employer to pay the
employee the amounts as wages, with the board crediting the
existing employer with an amount to offset against its future
contributions to the plan: Provided, That the wages paid to the
employee are not considered compensation for any purposes under
this article.
NOTE: The purpose of this bill is to add a definition of
"employment term", add a new section relating to correction of
errors and make a technical correction.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would be added.
§18-7B-21 is new; therefore, strike-throughs and underscoring
have been omitted.