COMMITTEE SUBSTITUTE

FOR

H. B. 2511


(By Delegates Higgins, Reed and Ashley)


(Originating in the House Committee on Pensions and Retirement)


[April 2, 1993]




A BILL to amend and reenact sections twenty-nine and thirty-one, article ten, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to further amend said article ten by adding thereto a new section, designated section twenty-two-e, relating to the public employees retirement act; reductions in employer and employee contributions to the retirement fund; and providing supplemental benefits for retirees under specified conditions.

 Be it enacted by the Legislature of West Virginia:
That sections twenty-nine and thirty-one, article ten, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that said article ten be further amended by adding thereto a new section, designated section twenty-two-e, all to read as follows:
ARTICLE 10. WEST VIRGINIA PUBLIC EMPLOYEES RETIREMENT ACT.

§5-10-22e. Supplemental benefits for retirees effective July 1, 1993; calculation of benefits and conditions of payment.

A supplement to retirement benefits provided shall be paid prospectively to all eligible retirees who have been retired three years or more, as calculated herein, effective the first day of July, one thousand nine hundred ninety-three, and with recalculation of such supplement on every three-year anniversary date thereafter, and using the applicable percent for such anniversary date, both as set forth in the schedule in this section. Each survivor beneficiary shall receive that pro rata share of the deceased retiree's supplement, as recalculated on each anniversary date of such deceased retiree, as such survivor's benefit constitutes a percentage of the former total benefit of such deceased retiree.
The supplemental benefit shall be computed on the basis of the monthly benefit received at retirement and said triennial supplement shall be an additional five percent of the original monthly benefit. The initial supplemental benefit and each succeeding triennial five percent supplement shall be calculated as a percent increase of the original monthly retirement benefits, as provided in the schedule hereinafter set forth in this section.
The triennial five percent supplements shall only be calculated and paid on amounts up to, but not exceeding, the first five hundred dollars of original monthly retirement benefits. Each triennial increase shall not therefore exceedtwenty-five dollars monthly: Provided, That the supplements shall only be paid upon a finding by the consolidated public retirement board, in consultation with the state actuary, that, if paid in the subsequent fiscal year, the supplement will cause no unfunded liability to result in the retirement fund: Provided, however, That if the board finds that the payment of the supplement at the percentages provided by the schedule set forth herein will cause an unfunded liability in the retirement fund, the consolidated retirement board may reduce the amount of the supplement to be paid to all retirees on a pro rata basis so as to provide a supplement at a rate which will cause no unfunded liability to accrue to the retirement fund.

S C H E D U L E

Retirement AnniversarySupplemental Benefit to
of Retiree:Be Calculated on basis of
From Date of Retirement Original Monthly Benefit Check
3rd Anniversary of Retirement Five Percent (5%)
6th Anniversary of Retirement Ten Percent (10%)
9th Anniversary of Retirement Fifteen Percent (15%)
12th Anniversary of Retirement Twenty Percent (20%)
15th Anniversary of Retirement Twenty-five Percent (25%)
18th Anniversary of Retirement Thirty Percent (30%)
21st Anniversary of Retirement Thirty-five Percent (35%)
24th Anniversary of Retirement Forty Percent (40%)
27th Anniversary of Retirement Forty-five Percent (45%)
30th Anniversary of Retirement Fifty Percent (50%)
Any retiree who becomes reemployed and has his or herretirement suspended, and later retires with different benefits, shall have their supplemental benefits calculated from the year of their final retirement and on the basis of the new monthly benefit.
Except for the initial award of supplemental benefits on the first day of July, one thousand nine hundred ninety-three, the subsequent recalculated triennial supplemental annuities shall become effective the first month following the triennial month of eligibility.
All recalculated supplements for retirees who have been retired for more than thirty years shall use the percent set forth in the schedule for the thirtieth anniversary of retirement so that no retiree shall have an increase above the increase provided upon the thirtieth anniversary of retirement.
Eligible retirees may elect to receive the supplemental benefits provided under this section or may elect to receive the supplemental benefits provided in any other section of this article whichever may be the greater: Provided: That in no event may any retiree receive the supplemental benefit provided in this section and at the same time receive a supplemental retirement benefit under any other provision of this article.
This supplemental benefit shall go into force and effect on the first day of July, one thousand nine hundred ninety-three.
§5-10-29. Members' deposit fund; members' contributions.

(a) The members' deposit fund is hereby created continued. It shall be the fund in which shall be accumulated, at regular interest, the contributions deducted from the compensation of members, and from which refunds of accumulated contributionsshall be paid and transfers made as provided in this section.
(b) The contributions of a member to the retirement system (including any member of the Legislature, except as otherwise provided in subsection (g) of this section) shall be a sum of not less than three and five-tenths percent of his annual compensations but not more than four and five-tenths percent of his or her annual compensations, as determined by the board of trustees: Provided, That commencing on the first day of July, one thousand nine hundred ninety-three, the contributions of a member to the retirement system, including any member of the Legislature, except as otherwise provided in subsection (g) of this section, shall be a sum of not more than three and five-tenths percent of his or her annual compensations as determined by the consolidated retirement board. The said contributions shall be made notwithstanding that the minimum salary or wages provided by law for any member shall be thereby changed. Each member shall be deemed to consent and agree to the deductions made and provided for herein. Payment of a member's compensation less said deductions shall be a full and complete discharge and acquittance of all claims and demands whatsoever for services rendered by him or her to a participating public employer, except as to benefits provided by this article.
(c) The officer or officers responsible for making up the payrolls for payroll units of the state government and for each of the other participating public employers shall cause the contributions, provided for in subsection (b) above, to be deducted from the compensations of each member in the employ of the participating public employer, on each and every payroll, foreach and every payroll period, from the date the member enters the retirement system to the date his or her membership terminates. When deducted, each of said amounts shall be paid by the participating public employer to the retirement system; said payments to be made in such manner and form, and in such frequency, and shall be accompanied by such supporting data, as the board of trustees consolidated retirement board shall from time to time prescribe. When paid to the retirement system, each of said amounts shall be credited to the members' deposit fund account of the member from whose compensations said contributions were deducted.
(d) In addition to the contributions deducted from the compensations of a member, as heretofore provided, a member shall deposit in the members' deposit fund, by a single contribution or by an increased rate of contribution as approved by the board of trustees, the amounts he may have withdrawn therefrom and not repaid thereto, together with regular interest from the date of withdrawal to the date of repayment. In no case shall a member be given credit for service rendered prior to the date he withdrew his contributions or accumulated contributions, as the case may be, until he returns to the members' deposit fund all amounts due the said fund by him.
(e) Upon the retirement of a member, or if a survivor annuity becomes payable on account of his death, in either event his accumulated contributions standing to his credit in the members' deposit fund shall be transferred to the retirement reserve fund.
(f) In the event an employee's membership in the retirementsystem terminates and no annuity becomes or will become payable on his account, any accumulated contributions standing to his credit in the members' deposit fund, unclaimed by the said employee, or his legal representative, within three years from and after the date his membership terminated, shall be transferred to the income fund.
(g) Any member of the Legislature who is a member of the retirement system and with respect to whom the term "final average salary" includes a multiple of eight, pursuant to the provisions of subdivision (15), section two of this article, shall contribute to the retirement system on the basis of his legislative compensation the sum of five hundred forty dollars each year he participates in the retirement system as a member of the Legislature.
§5-10-31. Employers accumulation fund; employers contributions.

(a) The employers accumulation fund is hereby created continued. It shall be the fund in which shall be accumulated the contributions made by the participating public employers to the retirement system, and from which transfers shall be made as provided in this section.
(b) Based upon the provisions of section thirteen of this article, the participating public employers contributions to the retirement system for members' service, as determined by the consolidated public retirement board, shall be determined, according to subdivisions one, two, three and four below, for the state as the state division, and for the other participating public employers as the public employer division.
(1) The participating public employers contributions formembers' current service shall be a percent of the members' annual compensation which will equal an amount which if paid annually by the participating public employers during the members' future service will be sufficient to provide, for the normal cost at the time annuities will become payable on their account, of the annuity payable to such member and to amortize any unfunded liability over a forty year period. difference between the annuity reserves for the future service portions of the annuities to be paid and the present value of the members' future net contributions: Provided, That the participating public employers contribution rate shall not exceed eight and one half percent of each members' annual compensation. The consolidated public retirement board shall review the percentage of employer contributions at least once every three years and recommend to the Legislature any adjustments which may be required to maintain the actuarial soundness of the retirement fund.
(2) The participating public employers contributions for members' accrued service shall be a percent of the members' annual compensation which will equal an amount which if paid annually by the participating public employers over a period of years, to be determined by the board of trustees, will amortize, at regular interest, the unfunded annuity reserves for the accrued portions of the annuities to be paid on account of members.
(3) The participating public employers contributions for annuities being paid retirants and beneficiaries shall be a percent of the members' annual compensations which will equal anamount which if paid annually by the participating public employers over a period of years, to be determined by the board of trustees, will amortize, at regular interest, the unfunded annuity reserves for annuities being paid retirants and beneficiaries.
(4) In no year shall the total of the contributions, provided for in subdivisions one, two and three above, to be paid by any participating public employer exceed ten and five-tenths percent of the total payroll for the members in the employ of such participating public employer for the preceding fiscal year.