H.
B.
4560
(By Mr. Speaker, Mr. Chambers, and Delegate Burk)
(By Request of the Executive)
[Introduced February 22, 1994; referred to the
Committee on Education then Finance.]
A BILL to amend and reenact section eighteen, article seven-a, chapter eighteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend and reenact section ten, article seven-b of said chapter, all relating to increasing employer contribution to teachers retirement system.
Be
it
enacted
by
the
Legislature
of
West
Virginia:
That section eighteen, article seven-a, chapter eighteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that section ten, article seven-b of said chapter be amended and reenacted, all to read as follows:
ARTICLE 7A. STATE TEACHERS RETIREMENT SYSTEM.
§
18-7A-18.
Funds created; fund transfers.
The funds created are the teachers accumulation fund, the employers accumulation fund, the benefit fund, the reserve fund and the expense fund. Each fund shall constitute a separate trust.
(a) The teachers accumulation fund shall be the fund in which the contributions of members shall be accumulated. The accumulated contributions of a member returned to the member upon that member's withdrawal, or paid to that member's estate or designated beneficiary in the event of death, shall be paid from the teachers accumulation fund. Any accumulated contributions forfeited by failure to claim such contributions shall be transferred from the teachers accumulation fund to the reserve fund.
(b) Beginning on the first day of July, one thousand nine hundred eighty-four, contributions of employers, shall be deposited in the employers accumulation fund through state appropriations, and such amounts shall be included in the budget bill submitted annually by the governor.
Beginning on the first day of July, one thousand nine hundred ninety-two and ninety-three, each county shall deposit in the employers accumulation fund an amount equal to six percent of all salary paid in excess of that authorized for minimum salaries in sections two and eight-a, article four, chapter eighteen-a of this code and any salary equity authorized in section five of said article or any county supplement equal to the amount distributed for salary equity among the counties; and beginning on 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.
(c) The benefit fund shall be the fund from which annuities shall be paid. Upon the retirement of a member, that member's accumulated contributions shall be transferred from the teachers accumulation fund to the benefit fund; the accumulated employers' contribution shall be transferred from the employers accumulation fund to the benefit fund; and annually a sum for prior service pension and disability credits, if needed, shall be transferred from the reserve fund to the benefit fund. Any deficit occurring in the benefit fund which is not automatically met by payments to that fund, as provided for by this article, shall be met by additional transfers from the employers accumulation fund and, if necessary, by transfers from the teachers accumulation fund.
(d) The retirement board is hereby authorized to accept gifts and bequests. All gifts, bequests and interest earnings from investments received by the board shall be deposited in the reserve fund. Any funds that may come into possession of the retirement system in this manner or which may be transferred from the teachers accumulation fund by reason of the lack of a claimant or because of a surplus in any of the funds, or any other moneys the disposition of which is not otherwise provided for, shall be credited to the reserve fund. The retirement board shall allow interest on the contributions in the teachers accumulation fund. Such interest shall be paid from the reserve fund and credited to the teachers accumulation fund. Any deficit occurring in any fund which would not be automatically covered by the payments to that fund as otherwise provided by this article shall be met by transfers from the reserve fund to such fund. In the reserve fund shall be accumulated moneys from retirement board appropriations to pay the accrued liabilities of the system, caused by the granting of prior service, ad hoc increases granted prior to the first day of July, one thousand nine hundred eighty, and disability pensions. Costs associated with board investments, such as premiums, accrued interest and commissions, shall be paid from the reserve fund.
(e) The expense fund shall be the fund from which shall be paid the expense incurred in the administration of the retirement system. The retirement board is herewith authorized to pay, from the expense fund, membership fees in such voluntary organizations as the national council on teacher retirement, anything in this code to the contrary notwithstanding. Interest on loans to members shall be deposited in the expense fund.
The retirement board is herewith given sole authority to direct and approve the making of any and all fund transfers as provided herein, anything in this code to the contrary notwithstanding.
ARTICLE 7B. TEACHERS' DEFINED CONTRIBUTION RETIREMENT SYSTEM.
§
18-7B-10.
Employer contributions.
Each participating employer shall annually make a contribution equal to seven and one-half percent of each member's gross compensation whose employment commenced on or after the first day of July, one thousand nine hundred ninety-one:
Provided,
That beginning on the first day of July, one thousand nine hundred ninety-five, ninety-four, 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. The pro rata share of this amount shall be paid upon each date that a member contribution is made and shall be remitted as provided for in section nine of this article for credit to the member's annuity account. Each participating employer has a fiduciary duty to its employees to ensure that the employer contributions are timely made. In the case of an officer or employee of the state, any unpaid contribution shall be a state debt, contracted as a result of a casual deficit in state revenues, to be accorded preferred status over other expenditures.
In the event that any payment is not timely made, the participating employer shall immediately give to the employee and the state auditor notice in writing of the nonpayment, in such form and accompanied by such documentation as may be required by the auditor. Notice to the auditor shall operate in the manner of a requisition, and the auditor shall transmit a warrant to the treasurer. At such time as funds are available in the appropriate account, the treasurer shall pay the employer contribution, together with appropriate daily interest.
NOTE: The purpose of this bill is to increase employers' contributions to the defined contribution system from seven and one-half percent to fifteen percent and to increase employers' contributions to payrolls of federal, state and county supplemental employees participating in the state teachers retirement system from six percent to fifteen percent.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.