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Introduced Version Senate Bill 462 History

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sb462 intr
Senate Bill No. 462

(By Senators Foster, Dempsey and Unger)

____________

[Introduced March 4, 2005; referred to the Committee

on Pensions; and then to the Committee on Finance.]

____________



A BILL to amend and reenact §5-10-2, §5-10-15, §5-10-17, §5-10-21, §5-10-22, §5-10-23, §5-10-26, §5-10-27 and §5-10-44 of the Code of West Virginia, 1931, as amended, all relating to the Public Employees Retirement System; revising definitions; clarifying use of restricted qualified military service credit to one retirement system; restricting certain rights of members to select a plan beneficiary; requiring annual physician review and an annual statement of earnings from certain persons receiving disability retirement payments; providing that interest is to be included in the calculation of terminal benefits payable as the result of death of retired participants; providing guidance on correcting employer errors; clarifying use of members' unused accrued leave in final average salary; and technical corrections.

Be it enacted by the Legislature of West Virginia:
That §5-10-2, §5-10-15, §5-10-17, §5-10-21, §5-10-22, §5-10- 23, §5-10-27 and §5-10-44 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) "State" means the state of West Virginia;
(2) "Retirement system" or "system" means the West Virginia public employees retirement system created and established by this article;
(3) "Board of trustees" or "board" means the board of trustees of the West Virginia public employees retirement system;
(4) "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 the first day of July, one thousand nine hundred ninety-seven, 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 the first day of July, one thousand nine hundred ninety-seven: Provided, however, That the regional community policing institute which participated in the public employees retirement system before the first day of July, two thousand, 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 the first day of July, two thousand;
(5) "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;
(6) "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 members of the Legislature, the clerk of the House of Delegates, the clerk of the Senate, employees of the Legislature whose term of employment is otherwise classified as temporary and who are employed to perform services required by the Legislature for its regular sessions or during the interim between regular sessions and who have been or are employed during regular sessions or during the interim between regular sessions in seven consecutive calendar years, as certified by the clerk of the house in which the employee served, members of the legislative body of any political subdivision and judges of the state court of claims are considered to be employees, 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;
(7) "Member" means any person who is included in the membership of the retirement system;
(8) "Retirant" means any member who retires with an annuity payable by the retirement system;
(9) "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;
(10) "Service" means personal service rendered to a participating public employer by an employee, as defined in this article, of a participating public employer;
(11) "Prior service" means service rendered prior to the first day of July, one thousand nine hundred sixty-one, to the extent credited a member as provided in this article;
(12) "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. This revised definition is retroactive and applicable to the first day of April, one thousand nine hundred eighty-eight, and thereafter;
(13) "Credited service" means the sum of a member's prior service credit and contributing service credit standing to his or her credit as provided in this article;
(14) "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;
(15) "Compensation" means the remuneration paid a member by a participating public employer for personal services rendered by him or her 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 his or her remuneration which is not paid in money;
(16) "Final average salary" means either:
(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 one thousand nine hundred seventy-one or thereafter) during any period of three consecutive years of his or her credited service contained within his or her ten years of credited service immediately preceding the date his or her employment with a participating public employer last terminated; or
(B) If he or she has less than five years of credited service, the average of the annual rate of compensation received by him or her 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 one thousand nine hundred seventy-one 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 one thousand nine hundred seventy-one 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 one thousand nine hundred seventy-one who, in either event, was a member of the Legislature on the thirtieth day of November, one thousand nine hundred sixty-eight, or the thirtieth day of November, one thousand nine hundred sixty-nine, or the thirtieth day of November, one thousand nine hundred seventy, or on the thirtieth day of November 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) one thousand five hundred dollars 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 (ii) of this proviso, the legislative compensation of the former member shall be computed on the basis of one thousand five hundred dollars 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 one thousand five hundred dollars multiplied by eight, whichever computation as to the member produces the higher annual compensation);
(17) "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;
(18) "Regular interest" means the rate or rates of interest per annum, compounded annually, as the board of trustees adopts from time to time;
(19) "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, using the upper cent for any fraction of a cent;
(20) "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;
(21) "Retirement" means a member's withdrawal from the employ of a participating public employer with an annuity payable by the retirement system;
(22) "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;
(23) "Retroactive service" means: (1) Service an employee was entitled to, but which the employer has not withheld d to
prior service at no cost in accordance with 162 CSR 5.16
13;
(24) "Required beginning date" means the first day of April of the calendar year following the later of: (A) The calendar year in which the member attains age seventy and one-half; or (B) the calendar year in which the member ceases providing service covered under this system to a participating employer;
(25) "Internal Revenue Code" means the Internal Revenue Code of 1986, as it has been amended; and
(26) "Plan year" means the same as referenced in section forty-two of this article.
(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;
(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, using 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;
(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. This revised definition is retroactive and applicable to the first day of April, one thousand nine hundred eighty-eight, and thereafter;
(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 further, 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 and/or 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 shall not constitute employer error.

(13) "Final average salary" means either:
(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 one thousand nine hundred seventy-one 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 one thousand nine hundred seventy-one, 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 one thousand nine hundred seventy-one, 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 one thousand nine hundred seventy-one, who, in either event, was a member of the Legislature on the thirtieth day of November, one thousand nine hundred sixty-eight, or the thirtieth day of November, one thousand nine hundred sixty-nine, or the thirtieth day of November, one thousand nine hundred seventy, or on the thirtieth day of November 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) one thousand five hundred dollars 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 (ii) of this proviso, the legislative compensation of the former member shall be computed on the basis of one thousand five hundred dollars 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 one thousand five hundred dollars 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 the first day of July, one thousand nine hundred ninety-seven, 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 the first day of July, one thousand nine hundred ninety-seven: Provided, however, That the Regional Community Policing Institute which participated in the Public Employees Retirement System before the first day of July, two thousand, 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 the first day of July, two thousand;
(20) "Prior service" means service rendered prior to the first day of July, one thousand nine hundred sixty-one, 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 the first day of April of the calendar year following the later of: (A) The calendar year in which the member attains age seventy and one-half; or (B) the calendar year in which the member 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 the first day of July, one thousand nine hundred sixty-one, and the date an employer decides to become a participating member of the Public Employees Retirement System; (2) service prior to the first day of July, one thousand nine hundred sixty-one, 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.
§5-10-15. Military service credit; qualified military service. (a) (1) The Legislature recognizes the men and women of this state who have served in the armed forces of the United States during times of war, conflict and danger. It is the intent of this section to confer military service credit upon persons who are eligible at any time for public employees retirement benefits for any time served in active duty in the armed forces of the United States when the duty was during any period of compulsory military service or during a period of armed conflict, as defined in this section.
(2) In addition to any benefit provided by federal law, any member of the retirement system who has previously served in or enters the active service of the armed forces of the United States during any period of compulsory military service or during a period of armed conflict shall receive credited service for the time spent in the armed forces of the United States, not to exceed five years if the member:
(A) Has been honorably discharged from the armed forces; and
(B) Substantiates by appropriate documentation or evidence his or her active military service and entry into military service during any period of compulsory military service or during periods of armed conflict.
(3) Any member of the retirement system who enters the active service of the armed forces of the United States during any period of compulsory military service or during a period of armed conflict shall receive the credit provided by this section regardless of whether he or she was a public employee at the time of entering the military service.
(4) If a member of the Public Employees Retirement System enters the active service of the United States and serves during any period of compulsory military service or during any period of armed conflict, during the period of the armed service and until the member's return to the employ of a participating public employer, the member's contributions to the retirement system is suspended and any credit balance remaining in the member's deposit fund shall be accumulated at regular interest.
(5) No member may receive duplicate credit for service for a period of compulsory military service which falls under a period of armed conflict.
(6) In any case of doubt as to the period of service to be credited a member under the provisions of this section, the board of trustees have final power to determine the period.
(7) The board is empowered to consider a petition by any member whose tour of duty, in a territory that would reasonably be considered hostile and dangerous, was extended beyond the period in which an armed conflict was officially recognized, if that tour of duty commenced during a period of armed conflict, and the member was assigned to duty stations within the hostile territory throughout the period for which service credit is being sought. The board has the authority to evaluate the facts and circumstances peculiar to the petition, and rule on whether granting service credit for the extended tour of duty is consistent with the objectives of this article. In that determination, the board is empowered to grant full credit for the period under petition subject to the limitations otherwise applicable, or to grant credit for any part of the period as the board considers appropriate, or to deny credit altogether.
(8) The board of trustees may propose legislative rules for promulgation in accordance with the provisions of article three, chapter twenty-nine-a of this code to administer the provisions of this section.
(b) For purposes of this section, the following definitions
apply:
(1) "Period of armed conflict" means the Spanish-American War, the Mexican border period, World War I, World War II, the Korean conflict, the Vietnam era, the Persian Gulf War and any other period of armed conflict by the United States, including, but not limited to, those periods sanctioned by a declaration of war by the United States Congress or by executive or other order of the President.
(2) "Spanish-American War" means the period beginning on the twenty-first day of April, one thousand eight hundred ninety-eight, and ending on the fourth day of July, one thousand nine hundred two, and includes the Philippine Insurrection, the Boxer Rebellion, and in the case of a veteran who served with the United States military forces engaged in hostilities in the Moro Province, means the period beginning on the twenty-first day of April, one thousand eight hundred ninety-eight, and ending on the fifteenth day of July, one thousand nine hundred three.
(3) "The Mexican border period" means the period beginning on the ninth day of May, one thousand nine hundred sixteen, and ending on the fifth day of April, one thousand nine hundred seventeen, in the case of a veteran who during the period served in Mexico, on its borders or in the waters adjacent to it.
(4) "World War I" means the period beginning on the sixth day of April, one thousand nine hundred seventeen, and ending on the eleventh day of November, one thousand nine hundred eighteen, and in the case of a veteran who served with the United States military forces in Russia, means the period beginning on the sixth day of April, one thousand nine hundred seventeen, and ending on the first day of April, one thousand nine hundred twenty.
(5) "World War II" means the period beginning on the seventh day of December, one thousand nine hundred forty-one, and ending on the thirty-first day of December, one thousand nine hundred forty-six.
(6) "Korean conflict" means the period beginning on the twenty-seventh day of June, one thousand nine hundred fifty, and ending on the thirty-first day of January, one thousand nine hundred fifty-five.
(7) "The Vietnam era" means the period beginning on the twenty-eighth day of February, one thousand nine hundred sixty-one, and ending on the seventh day of May, one thousand nine hundred seventy-five, in the case of a veteran who served in the Republic of Vietnam during that period; and the fifth day of August, one thousand nine hundred sixty-four, and ending on the seventh day of May, one thousand nine hundred seventy-five, in all other cases.
(8) "Persian Gulf War" means the period beginning on the second day of August, one thousand nine hundred ninety, and ending on the eleventh day of April, one thousand nine hundred ninety-one.
(c) Notwithstanding the preceding provisions of this section, 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. No military service credit may be used in more than one retirement system administered by the Consolidated Public Retirement Board. The retirement Board is authorized to 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 of this chapter, may promulgate rules relating to contributions, benefits and service credit to comply with Section 414(u) of the Internal Revenue Code.
§5-10-17. Retirement system membership.
(a) All employees, as defined in section two of this article, who are in the employ of a political subdivision the day preceding the date it becomes a participating public employer and who continue in the employ of the participating public employer on and after that date shall become members of the retirement system; and all persons who become employees of a participating public employer on or after that date shall thereupon become members of the system; except as provided in subdivisions (b) and (c) of this section.
(b) The membership of the Public Employees Retirement System shall not include any person who is a an active contributing member of, or who has been retired by, any of the State Teachers retirement systems, the Judges Retirement System, the any Retirement System of the Division of Public Safety West Virginia State Police, the Deputy Sheriff Retirement System or any municipal retirement system for either, or both, policemen police or firemen firefighter; and the Bureau of Employment Programs, by the Commissioner of the Bureau, may elect whether its employees will accept coverage under this article or be covered under the authorization of a separate enactment: Provided, That the exclusions of membership shall not apply to any member of the State Legislature, the Clerk of the House of Delegates, the Clerk of the State Senate or to any member of the legislative body of any political subdivision provided he or she once becomes a contributing member of the retirement system: Provided, however, That any retired member of the retirement system of the division of public safety State Police Death, Disability and Retirement Fund, the West Virginia State Police Retirement System, the Deputy Sheriff Retirement System and any retired member of any municipal retirement system for either, or both, policemen police or firemen firefighter may on and after the effective date of this section become a member of the retirement system as provided in this article, without receiving credit for prior service as a municipal policeman police officer or fireman firefighter or as a member of the division of public safety State Police Death, Disability and Retirement Fund, the West Virginia State Police Retirement System or of the Deputy Sheriff Retirement System: Provided further, That the membership of the retirement system does not include any person who becomes employed by the Prestera Center for Mental Health Services, Valley Comprehensive Mental Health Center, Westbrook Health Services or Eastern Panhandle Mental Health Center on or after the first day of July, one thousand nine hundred ninety-seven: And provided further, That membership of the retirement system does not include any person who becomes a member of the federal railroad retirement act on or after the first day of July, two thousand.
(c) Any member of the State Legislature, the Clerk of the House of Delegates, the Clerk of the State Senate and any employee of the State Legislature whose 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 so employed during regular sessions or during the interim between sessions in seven consecutive calendar years, as certified by the clerk of the house in which the employee served, or any member of the legislative body of any other political subdivision shall become a member of the retirement system provided he or she notifies the retirement system in writing of his or her intention to be a member of the system and files a membership enrollment form as prescribed by the board of trustees, and each person, upon filing his or her written notice to participate in the retirement system, shall by that act authorize the Clerk of the House of Delegates or the Clerk of the State Senate or such person or legislative agency as the legislative body of any other political subdivision shall designate to deduct the member's contribution, as provided in subsection (b), section twenty-nine of this article, and after the deductions have been made from the member's compensation, the deductions shall be forwarded to the retirement system.
(d) If question arises regarding the membership status of any employee, the board of trustees has the final power to decide the question.
(e) Any individual who is a leased employee is not eligible to participate in the system. For the purposes of this article, the term "leased employee" means any individual who performs services as an independent contractor or pursuant to an agreement with an employee leasing organization or other similar organization. If a question arises regarding the status of an individual as a leased employee, the board has final authority to decide the question.
§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, shall be 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 the first day of July, two thousand two, any person who becomes a new member of this retirement system shall, in qualifying for retirement hereunder, 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, shall be 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. The member's annuity shall begin the first day of the calendar month next following the month in which his or her application for the annuity is filed with the Board.
§5-10-22. Retirement annuity.
(a) Upon a member's retirement, as provided in this article, he or she shall receive a straight life annuity equal to one and five-tenths percent of his or her final average salary multiplied by the number of years, and fraction of a year, of his or her credited service in force at the time of his or her retirement: Provided, That the final average salary used in this calculation may not include any lump sum payment for unused, accrued leave of any kind or character. The credited service used for this calculation may not include any period of limited credited service: Provided, however, That after March one, one thousand nine hundred seventy, all members retired and all members retiring shall receive a straight life annuity equal to two percent of his or her final average salary multiplied by the number of years, and fraction of a year, of his or her credited service, exclusive of limited credited service in force at the time of his or her retirement. In either event, upon his or her retirement he or she has the right to elect an option provided for in section twenty-four of this article. All annuity payments shall commence effective the first day of the month following the month in which a member retires or a member dies leaving a beneficiary entitled to benefits and shall continue to the end of the month in which the retirant or beneficiary dies, and the annuity payments may not be prorated for any portion of a month in which a member retires or retirant or beneficiary dies. Any member receiving an annuity based in part upon limited credited service is not eligible for the supplements provided for in sections twenty-two-a through twenty-two-d, inclusive, of this article.
(b) The annuity of any member of the Legislature who participates in the retirement system as a member of the Legislature and who retires under this article or of any former member of the Legislature who has retired under this article (including any former member of the Legislature who has retired under this article and whose annuity was readjusted as of the first day of March, one thousand nine hundred seventy, under the former provisions of this section) shall be increased from time to time during the period of his or her retirement when and if the legislative compensation paid under section two, article two-a, chapter four of this code, to a member of the Legislature shall be increased to the point where a higher annuity would be payable to the retirant if he or she were retiring as of the effective date of the latest increase in such legislative compensation, but on the basis of his or her years of credited service to the date of his or her actual retirement. §5-10-23. Terminal payment following retirement.
For the purposes of this section, the term "accumulated net benefit" means the aggregate amount of all benefits paid to or on behalf of a member. This includes, without limitation: (a) Benefits paid to the member as an annuity; (b) any lump sum distributions paid to the member or to any other person on account of the member's rights to benefits from the plan; (c) survivor benefits paid to any person or persons on account of the member's rights to benefits from the plan; and (d) any other distributions on account of the member's rights to benefits from the plan whether they are paid in the nature of a refund of contributions, interest on contributions, lump sum distributions, or annuity type benefits. The amounts counted will be the amounts actually paid without regard to any optional form of any annuity benefit.
For the purposes of this section, the term "accumulated employee contributions" means all money the member has contributed to the plan, whether the form of the contribution was after tax deductions from wages, before tax deductions from wages, direct remittance by the member to repay contributions and interest previously distributed and direct remittance by the member to pay imputed contributions for periods which were not subject to contributions but may be counted for benefit purposes under the plan. The term accumulated employee contributions does not include any amount credited under the provisions of the plan as interest on member contributions.
For the purposes of this section, the term "member's account" means the excess of the accumulated employee contributions over the accumulated net benefit payments at any point in time and the term "member" includes retirant. (a) This section provides for the payment of the balance in the a retired member's account in the event that all claims to benefits payable to, or on behalf of, a member expire before his or her member account has been fully exhausted. The expiration of such rights to benefits would be on the occasion of either the death of the retired member and any and all beneficiaries who might have a claim to regular benefit payments under the plan, for any form of benefit. Without limitation, this would include the demise of beneficiaries of survivor annuities and beneficiaries of any lump sum distributions drawing benefits under a straight life annuity, or the death of a survivor annuitant drawing benefits under any optional form of benefit selected by the retired member, whichever occurs later.
(b) In the event that all claims to benefit benefits payable to, or on behalf of, a retired member expire, and the accumulated employee contributions exceed his or her the accumulated net benefit payments paid to or on behalf of the retired member, the balance in the retired member's account shall be paid to the person or persons as the retired member has nominated by written designation duly executed and filed with the board of trustees. If there be no designated person or persons surviving the retired member following the expiration of claims, the excess of the accumulated employee contributions over the accumulated net benefit, if any, shall be paid to his or her the retired member's estate. In no case may the plan retain any amount of the accumulated employee contributions remaining in the member's account, but it shall retain interest earned on the same accumulated employee contributions in the instance of a member's or beneficiary's post-retirement death. Provided, That the provisions of this section are retroactive to all members who entered retirement status on or after June 9, 2000.
§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 hereof, and at least once in each three-year period thereafter, the Board of trustees may, and upon the retirant's application, shall 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 submit a statement signed by the disability retirant's physician certifying continued disability and a copy of the disability retirant's annual statement of earnings or other financial information as required by the board from the previous tax year. Should the said retirant refuse to submit to such medical examination in any such period the documentation, his or her disability annuity may be discontinued by the Board until his withdrawal of such refusal the Board receives the documentation. Should such refusal continue for one year, all his the retirant's rights in and to his the annuity may be revoked by the board. If, upon such medical examination of a disability retirant, the said physician reports to the board that the retirant is physically able and capable of resuming employment with a participating public employer, he the retirant shall be returned to the employ of the participating public employer from whose employment he retired and his disability annuity shall terminate: Provided, That the report of the said physician is concurred in by the board the Board concurs in the physician's report.
(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 his the retirant's credited service in force at the time of his or her retirement shall be restored. to his credit.
(c) If a disability retirant, who has not attained age sixty years, becomes engaged in a gainful occupation, business or employment, and the sum of his earnings from such occupation, business or employment, and his disability annuity exceeds his annual rate of compensation at the time of his retirement, his disability annuity shall be reduced to an amount which when added to the amount so earned by him shall equal his said annual rate of compensation. If his earnings are later changed, his disability annuity shall be correspondingly adjusted. 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 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 may do so within ninety days of the effective date of termination by requesting an examination at the applicant's expense by an appropriate medical professional chosen by the Board.
§5-10-27. Preretirement death annuities.
(a) In the event any member who has ten or more years of credited service or any former member with ten or more years of credited service and who is entitled to a deferred annuity, pursuant to section twenty-one of this article: may at any time prior to the effective date of his or her retirement, by written declaration duly executed and filed with the board of trustees, in the same manner as if he or she were then retiring from the employ of a participating public employer, elect option A provided for in section twenty-four of this article and nominate a beneficiary whom the board finds to have had an insurable interest in the life of the member. Prior to the effective date of his or her retirement, a member may revoke his or her election of option A and nomination of beneficiary and he or she may again prior to his or her retirement elect option A and nominate a beneficiary as provided in this subsection. Upon the death of a member who has an option A election in force, his or her beneficiary, if living, shall immediately receive an annuity computed in the same manner in all respects as if the same member had retired the day preceding the date of his or her death, notwithstanding that he or she might not have attained age sixty years, and elected the said option A. If at the time of his or her retirement a member has an option A election in force, his or her election of option A and nomination of beneficiary shall thereafter continue in force. (1) Dies without leaving a surviving spouse; but (2) leaves surviving him or her a child who is financially dependent on the member by virtue of a permanent mental or physical disability upon evidence satisfactory to the Board; and (3) has named the disabled child as sole beneficiary, the disabled child shall immediately receive an annuity computed in the same manner in all respects as if the said member had: (1) Retired the day preceding the date of his or her death, notwithstanding that he or she might not have attained age sixty or sixty-two years, as the case may be; (2) elected option A provided for in section twenty-four of this article; and (3) nominated his or her disabled child as beneficiary. As an alternative to annuity option A, A member or former member with ten or more years of credited service, who does not leave surviving him or her a spouse or a disabled child, may elect to have the preretirement death benefit paid as a return of accumulated contributions in a lump sum amount to any beneficiary or beneficiaries he or she chooses.
(b) In the event any member who has ten or more years of credited service, or any former member with ten or more years of credited service and who is entitled to a deferred annuity, pursuant to section twenty-one of this article: (1) Dies; and (2) leaves a surviving spouse, the surviving spouse shall immediately receive an annuity computed in the same manner in all respects as if the said member had: (1) Retired the day preceding the date of his or her death, notwithstanding that he or she might not have attained age sixty or sixty-two years, as the case may be; (2) elected option A provided for in section twenty-four of this article; and (3) nominated his or her surviving spouse as beneficiary. However, the surviving spouse shall have the right to waive the annuity provided for in this section: Provided, That he or she executes a valid and notarized waiver on a form provided by the retirement Board and that the member or former member attests to the waiver. If the waiver is presented to and accepted by the retirement Board, the member or former member, shall may nominate a beneficiary who has an insurable interest in the member's or former member's life upon evidence satisfactory to the Board, a child who is financially dependent on the member by virtue of a permanent mental or physical disability under annuity option A. As an alternative to annuity option A, the member or former member may elect to have the preretirement death benefit paid as a return of accumulated contributions in a lump sum amount to any beneficiary or beneficiaries he or she chooses in the event a waiver, as provided for in this section, has been presented to and accepted by the retirement Board.
(c) In the event any member who has ten or more years of credited service or any former member with ten or more years of credited service and who is entitled to a deferred annuity, pursuant to section twenty-one of this article: (1) Dies without leaving surviving him or her a spouse; but (2) leaves surviving him or her an infant child or children; and (3) does not have a beneficiary nominated as provided in subsection (a) of this section, the infant child or children shall be entitled to an annuity to be calculated as follows: The annuity reserve shall be calculated as though the member had retired as of the date of his or her decease and elected a straight life annuity and the amount of the annuity reserve shall be paid in equal monthly installments to said member's infant child or children until the child or children attain age twenty-one or sooner marry or become emancipated; however, in no event shall any child or children receive more than two hundred fifty dollars per month each. The annuity payments shall be computed as of the date of the death of the member and the amount of the annuity shall remain constant during the period of payment. The annual amount of the annuities payable by this section shall not exceed sixty percent of the deceased member's final average salary.
(d) In the event any member or former member does not have ten or more years of credited service, no preretirement death annuity may be authorized, owed or awarded under this section.
§5-10-44. Correction of errors.
Should any change or employer error in the records of any participating public employer or the retirement system result in any person receiving from the system more or less than he would have been entitled to receive had the records been correct, the Board of trustees shall correct such the error, and as far as is practicable shall adjust the payment of the benefit in such a manner that the actuarial equivalent of the benefit to which such 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 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. The employee's share remitted by the employer may not exceed two thousand dollars. The public employer must submit proof that the employer error was not willful, wanton or reckless.

NOTE: The purpose of this bill is to clarify the service credit for certain Public Employee Retirement System employees, to identify qualifying military service, to require an annual physician's report and annual statement of earnings for certain disability retirees, to restrict certain beneficiary options, to provide that interest be included in terminal benefits payable to retired participants, to alphabetize, amend and add certain definitions, to clarify use of members' unused, accrued leave in final average salary and to provide guidance on correcting employer errors.

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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