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Introduced Version Senate Bill 591 History

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Senate Bill No. 591

(By Senator Foster)

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[Introduced March 18, 2005; referred to the Committee

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

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A BILL to amend and reenact §18-7A-3, §18-7A-14, §18-7A-17, §18-7A-23a, §18-7A-25, §18-7A-26 and §18-7A-34 of the Code of West Virginia, 1931, as amended, all relating to amending, adding and alphabetizing the definitions; providing for the use of qualified military service; providing that, for deceased retired participants, interest is included in the calculation of terminal benefits payable; clarifying provisions for loan repayment ; replacing earnable compensation with gross salary; clarifying maximum loan amount; and technical corrections.

Be it enacted by the Legislature of West Virginia:
That §18-7A-3, §18-7A-14, §18-7A-17, §18-7A-23a, §18-7A-25, §18-7A-26 and §18-7A-34 of the Code of West Virginia, 1931, as amended, be amended and reenacted, all to read as follows:
ARTICLE 7A. STATE TEACHERS RETIREMENT SYSTEM.
§18-7A-3. Definitions.
"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 secretary of the retirement board; (g) members of the research, extension, administrative or library staffs of the public schools; (h) 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) employees of the state board of education who are performing services of an educational nature; (j) any person employed in a nonteaching capacity by the state board of education, the West Virginia board of regents [abolished], any county board of education, the state department of education or the teachers retirement board, if that person was formerly employed as a teacher in the public schools; (k) 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; and (l) employees of the state bod of school finance, if that person was formerly employed as a teacher in the public schools. "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 West Virginia board of regents [abolished]; or (d) the teachers retirement board.
"Members of the administrative staff of the public schools" means deans of instruction, deans of men, deans of women, and financial and administrative secretaries.
"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.
"Retirement system" means the state teachers retirement system provided for in this article.
"Present teacher" means any person who was a teacher within the thirty-five years beginning the first day of July, one thousand nine hundred thirty-four, and whose membership in the retirement system is currently active.
"New entrant" means a teacher who is not a present teacher.
"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.
"Employment term" means employment for at least ten months, a month being defined as twenty employment days.
"Present member" means a present teacher who is a member of the retirement system.
"Total service" means all service as a teacher while a member of the retirement system since last becoming a member and, in addition thereto, credit for prior service, if any.
"Prior service" means all service as a teacher completed prior to the first day of July, one thousand nine hundred forty-one, 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.
"Pick-up service" means service that a member was entitled to, but which the employer has not withheld or paid for.
"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.
"Accumulated contributions" means all deposits and all deductions from the earnable compensation of a contributor minus the total of all supplemental fees deducted from his or her compensation.
"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.
Refund interest" means interest compounded, according to the formula established in legislative rules, series seven of the consolidated public retirement board.
"Employer" means the agency of and within the state which has employed or employs a member.
"Contributor" means a member of the retirement system who has an account in the teachers accumulation fund.
"Beneficiary" means the recipient of annuity payments made under the retirement system.
"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.
"Earnable compensation" means the full compensation actually received by members for service as teachers 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. Allowances from employers for maintenance of members shall be considered a part of earnable compensation for those members whose allowances were approved by the teachers retirement board and contributions to the teachers retirement system were made, in accordance therewith, on or before the first day of July, one thousand nine hundred eighty.
"Annuities" means the annual retirement payments for life granted beneficiaries in accordance with this article. "Member" means a member of the retirement system. "Public schools" means all publicly supported schools, including normal schools, colleges and universities in this state. "Deposit" means a voluntary payment to his or her account by a member. "Plan year" means the twelve-month period commencing on the first day of July and ending the following thirtieth day of June of any designated year. "Internal Revenue Code" means the Internal Revenue Code of 1986, as it has been amended. "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 retires or ceases covered employment under the system.
(a) 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) "Annuities" means the annual retirement payments for life granted beneficiaries in accordance with this article. (4) "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.
(5) "Beneficiary" means the recipient of annuity payments made under the retirement system. (6) "Contributor" means a member of the retirement system who has an account in the teachers accumulation fund. (7) "Deposit" means a voluntary payment to his or her account by a member. (8) "Employer" means the agency of and within the state which has employed or employs a member. (9) "Employment term" means employment for at least ten months, a month being defined as twenty employment days.
(10) "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 also include retroactive payments made to a member to correct a clerical error, or 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 shall 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.
(11) "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended. (12) "Member" means a member of the retirement system. (13) "Members of the administrative staff of the public schools" means deans of instruction, deans of men, deans of women, and financial and administrative secretaries. (14) "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. (15) "New entrant" means a teacher who is not a present teacher. (16) "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; or (C) the Higher Education Policy Commission;
(17) "Pick-up service" means service to which a member is entitled, but for which the employer has not withheld or paid. (18) "Plan year" means the twelve-month period commencing on the first day of July, and ending the following thirtieth day of June, of any designated year. (19) "Present member" means a present teacher who is a member of the retirement system. (20) "Present teacher" means any person who was a teacher within the thirty-five years beginning the first day of July, one thousand nine hundred thirty-four, and whose membership in the retirement system is currently active.
(21) "Prior service" means all service as a teacher completed prior to the first day of July, one thousand nine hundred forty-one, and all service of a present member who was employed as a teacher, and for which the teacher did not contribute to a retirement account because he or she was legally ineligible for membership during the service.
(22) "Public schools" means all publicly supported schools, including normal schools, colleges and universities in this state. (23) "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 Consolidated Public Retirement Board.
(24) "Refund interest" means interest compounded, according to the formula established in legislative rules, series seven of the Consolidated Public Retirement Board. (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. (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.
(27) "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 retires or ceases covered employment under the system. (28) "Retirement Board" means the Consolidated Public Retirement Board.
(29) "Retirement system" means the State Teachers Retirement System provided for in this article.
(30) "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) 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, the Department of Health and Human Resources; and (K) employees of the State Board of School Finance, if that person was formerly employed as a teacher in the public schools.
(31) "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.
(b) The masculine gender shall be construed so as to include the feminine.
(c) Age in excess of seventy years shall be considered to be seventy years.
§18-7A-14. Contributions by members.
(a) At the end of each month every member of the retirement system shall contribute six percent of that member's monthly earnable compensation gross salary to the retirement board: Provided, That any member employed by the West Virginia Board of Directors of the State College System or the Board of Trustees of the university system at an institution of higher education under its control shall contribute on the member's full gross salary, unless otherwise provided in section fourteen-a of this article.
(b) Annually, the contributions of each member shall be credited to the member's account in the teachers accumulation fund. The contributions shall be deducted from the salaries of the members as herein prescribed, and every member shall be deemed considered to have given consent to such the deductions. No deductions, however, shall may be made from the earnable compensation gross salary 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 earnable compensation gross salary of members required by this section. Beginning the first day of July, one thousand nine hundred ninety-four, the rate shall be seven and one-half percent; beginning on the first day of July, one thousand nine hundred ninety-five, the rate shall be nine percent; beginning on the first day of July, one thousand nine hundred ninety-six, the rate shall be ten and one-half percent; beginning on the first day of July, one thousand nine hundred ninety-seven, the rate shall be twelve percent; beginning on the first day of July, one thousand nine hundred ninety-eight, the rate shall be thirteen and one-half percent; and beginning on the first day of July, one thousand nine hundred ninety-nine and thereafter, the rate shall be fifteen percent.
(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 deemed to be a full discharge of the employer's contractual obligation as to earnable compensation gross salary.
(e) Each contributor shall file with the Consolidated Public 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.
§18-7A-17. Statement and computation of teachers' service; qualified military service.

(a) Under rules adopted by the Retirement Board, each teacher shall file a detailed statement of his or her length of service as a teacher 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 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 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 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 during the first full year of current employment, 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 of out-of-state service, as provided in this article, shall may not be used to establish eligibility for a retirement allowance and the Retirement Board shall grant credit for the transferred service as additional service only: Provided, however, That a transfer 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 may 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 may 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) No members shall 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) No member shall may be considered absent from service as a teacher while serving as an officer with a statewide professional teaching association, or who has served in that capacity, and no retired teacher, who served in that capacity while a member, shall may 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 may not exceed ten years: Provided, however, That a member or retired teacher who is serving or has served as an officer of a statewide professional teaching association shall make deposits to the Teachers Retirement Board, 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) The Teachers Retirement Board shall grant service credit to any former or present member of the West Virginia Public Employees Retirement System who has been a contributing member for more than three years, for service previously credited by the Public Employees 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 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 interest paid shall be deposited in the reserve fund.(h) 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 during the first full year of current employment, 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 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) 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 Board that the member previously worked in CETA; and (3) the member shall pay to the 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 the thirty-first day of March, two thousand three: And provided further, That the Retirement Board shall exercise due diligence to notify affected employees of the provisions of this subsection. (j) If a member is not eligible for prior service credit or pension as provided in this article, then his or her prior service shall may not be considered a part of his or her total service. (k) 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) 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 may the prior service credit exceed forty years. (m) 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 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 herein 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 the first day of June, two thousand: Provided further, That any member to which the provisions of this subsection apply may elect to pay to the 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 utilizing using the provisions of this subsection is not required to pay interest on any contributions he or she may decide to make.
(n) The teachers Retirement Board 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 of six percent 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-23a. Terminal benefits.
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 period 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 each individual who has contributed, or will contribute in the future, to the teachers retirement system, including each retirant. (a) This section provides for the payment of the balance in the a retired member's account to paid in the manner described herein 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 at the occasion of later 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.
(b) In the event that all claims to 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 Retirement Board. of Trustees. If there be no designated person or persons surviving survive 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 shall be retroactive to all members who entered retirement status on or after the ninth day of June, two thousand.
§18-7A-25. Eligibility for retirement allowance.
(a) Any member who has attained the age of sixty years or who has had thirty-five years of total service as a teacher in West Virginia, regardless of age, shall be is eligible for an annuity. No new entrant nor present member shall be eligible for an annuity, however, if either has less than five years of service to his or her credit.
(b) Any member who has attained the age of fifty-five years and who has served thirty years as a teacher in West Virginia shall be 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, shall be is eligible for an annuity, but the same shall be the reduced actuarial equivalent of the annuity the member would have received if such the member were age fifty-five at the time such annuity was the member applied for the annuity.
(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 shall be is eligible for annuity for disability if he or she satisfies the conditions in either subdivision (a) or subdivision (b) and meets the conditions of subdivision (c) as follows:
(a) (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 disability annuity is approved.
(b) (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 said the disability is a direct and total result of an act of student violence directed toward the member.
(c) (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 such service as a teacher or nonteaching member the disability is total and likely to be permanent, and that he or she the member should be retired in consequence thereof.
(f) Continuance of the disability of the retired teacher member shall be established by medical examination, as prescribed in the preceding paragraph, annually for five years after retirement, and thereafter at such times as the retirement board may require. Effective the first day of July, one thousand nine hundred ninety-eight, 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 receives or would receive if the options under section twenty-eight of this article were not available and that no beneficiary or beneficiaries of the disability annuitant may receive a greater benefit, nor receive any benefit for a greater length of time, than such the beneficiary or beneficiaries would have received had the disability retiree not made any election of the options available under said section twenty-eight. 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 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 member no longer exists, or if the retired teacher member refuses to submit to medical examination as required by this section.
§18-7A-26. Computation of annuities.
(a) Annuitants whose annuities were approved by the Retirement Board effective before the first day of July, one thousand nine hundred eighty, shall be paid the annuities which were approved by the Retirement Board.
(b) Annuities approved by the Retirement Board effective after the thirtieth day of June, one thousand nine hundred eighty, shall be computed as provided herein.
(c) Upon establishment of eligibility for a retirement allowance, a member shall be granted an annuity which shall be the sum of the following:
(a) (1) Two percent of the member's average salary multiplied by his or her total service credit as a teacher member. In this paragraph "average salary" shall mean means the average of the highest annual salaries received by the member during any five 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 under the control of the West Virginia Higher Education Policy Commission under its control shall be four thousand eight hundred dollars, as provided by section fourteen-a of this article; and chapter; and
(b) (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 shall be based upon a disability table prepared by a competent actuary approved by the Retirement Board.
(e) Upon the death of an annuitant receiving permanent disability benefits or the death of an annuitant who qualified for an annuity as the surviving spouse of an active member, or because of permanent disability, designated beneficiary or 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 deemed are 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 became eligible under this article for the annuity granted; in no case, however, shall may an annuitant receive more than four monthly payments which are retroactive after the Board receives his or her application for annuity. Beginning with the first day of July, one thousand nine hundred ninety-four, 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 the eighteenth day of December. 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, the annuity shall be changed in accordance with the data, the change being effective with the payment for the month within which the 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 nonteaching member prior to the first day of July, one thousand nine hundred forty-one, shall be eligible for prior service credit and for prior service pensions as prescribed in this section.
§18-7A-34. Loans to members.
(a) A An actively contributing member of the retirement system upon written application may borrow from his or her individual account in the teachers accumulation fund, subject to these restrictions:
(1) Loans shall be made in multiples of ten dollars, the minimal loan being one hundred dollars and the maximum being eight thousand dollars: Provided, That the maximum amount of any loan when added to the outstanding balance of all other loans shall not exceed the lesser of the following: (a) Fifty Eight thousand dollars reduced by the excess (if any) of the highest outstanding balance of loans during the one-year period ending on the day before the date on which the loan is made, over the outstanding balance of loans to the member on the date on which the loan is made; or (b) fifty percent of the member's contributions to his or her individual account in the teachers accumulations fund: Provided, however, That if the total amount of loaned money outstanding exceeds forty million dollars, the maximum shall not exceed three thousand dollars until the Retirement Board determines that loans outstanding have been reduced to an extent that additional loan amounts are again authorized.
(2) Interest charged on the amount of the loan shall be six percent per annum, or a higher rate as set by the Retirement Board: Provided, That interest charged shall be commercially reasonable in accordance with the provisions of Section 72(p)(2) of the Internal Revenue Code, and the federal regulations issued thereunder. If repayable in installments, the interest shall may not exceed the annual rate so established upon the principal amount of the loan, for the entire period of the loan, and such the charge shall be added to the principal amount of the loan. The minimal interest charge shall be for six months.
(3) No member shall be is eligible for more than one outstanding loan at any time.
(4) If a refund is payable to the borrower or his or her beneficiary before he or she the borrower repays the loan with interest, the balance due with interest to date shall be deducted from such the refund.
(5) From his or her monthly salary as a teacher or a nonteacher the member shall pay the loan and interest by deductions which will pay the loan and interest in substantially level payments in not more than sixty nor less than six months. Upon notice of loan granted and payment due, the employer shall be responsible for making such salary deductions and reporting them to the Retirement Board. At the option of the Retirement Board, loan deductions may be collected as prescribed herein for the collection of members' contribution, or may be collected through issuance of warrant by employer. If the borrower decides to make loan payments while not paid for service as a teacher, is no longer employed as a teacher or nonteaching member, the borrower must make monthly loan payments directly to the Consolidated Public Retirement Board and the Retirement Board must accept such the payments.
(6) The entire unpaid balance of any loan, and interest due thereon, shall, at the option of the Retirement Board, become due and payable without further notice or demand upon the occurrence with respect to the borrowing member of any of the following events of default: (A) Any payment of principal and accrued interest on a loan remains unpaid after the same becomes due and payable under the terms of the loan or after such grace period as may be established in the discretion of the Retirement Board; (B) the borrowing member attempts to make an assignment for the benefit of creditors of his or her refund or benefit under the retirement system; or (C) any other event of default set forth in rules promulgated by the Retirement Board in accordance with the authority granted pursuant to section one, article ten-d, chapter five of this code: Provided, That any refund or offset of an unpaid loan balance shall be made only at the time the member is entitled to receive a distribution under the Retirement System.
(7) Loans shall be evidenced by such form of obligations and shall be made upon such additional terms as to default, prepayment, security and otherwise as the Retirement Board may determine.
(8) Notwithstanding anything herein to the contrary, the loan program authorized by this section shall comply with the provisions of Section 72(p)(2) and Section 401 of the Internal Revenue Code, and the federal regulations issued thereunder, and accordingly, the Retirement Board is authorized to: (A) Apply and construe the provisions of this section and administer the plan loan program in such a manner as to comply with the provisions of Section 72(p)(2) and Section 401 of the Internal Revenue Code and the federal regulations issued thereunder; (B) adopt plan loan policies or procedures consistent with these federal law provisions; and (C) take such actions as it deems necessary or appropriate to administer the plan loan program created hereunder in accordance with these federal law provisions. The Retirement Board is further authorized in connection with the plan loan program to take any actions that may at any time be required by the Internal Revenue Service regarding compliance with the
requirements of Section 72(p)(2) or section 401 of the Internal Revenue Code, and the federal regulations issued thereunder, notwithstanding any provision in this article to the contrary.


NOTE: The purpose of this bill is for technical corrections, to provide that interest be included in terminal benefits payable to retired member's named beneficiary, clarify maximum loan amount, to
establish the limited use of qualifying military service, to alphabetize, amend and add certain definitions and to clarify the repayment and amount of loans.

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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