Senate Bill No. 409
(By Senators Burdette, Mr. President, and Boley
By Request of the Executive)
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[Introduced February 21, 1994; referred to the Committee
on Pensions; and then to the Committee on Finance.]
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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 separatetrust.
(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, therate 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 transferredfrom 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 asprovided 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 preferredstatus 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.