ENGROSSED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 409
(By Senators Burdette, Mr. President, and Boley
By Request of the Executive)
____________
[Originating in the Committee on Finance;
reported March 3, 1994.]
____________
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 retirement plans for state teachers;
increasing the employers' contribution rate under the
teachers' defined contribution retirement system to
fifteen percent of employees' gross annual compensation
effective the first day of July, one thousand nine hundred
ninety-four; and establishing a constant seven and one-
half percent employers' contribution rate under the
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 hundredthirty-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 for contributions
of employers 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 the gross
compensation of each member whose employment commenced on or
after the first day of July, one thousand nine hundred ninety-
one. 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 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.