Senate Bill No. 480
(By Senator Plymale)
[Introduced February 19, 1996; referred to the Committee on
Pensions; and then to the Committee on Finance.]
A BILL to amend and reenact section one-d, article one, chapter
eighteen-b of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to changing the cap
on retirement incentives for higher education employees.
Be it enacted by the Legislature of West Virginia:
That section one-d, article one, chapter eighteen-b of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
CHAPTER 18B. HIGHER EDUCATION.
ARTICLE 1. GOVERNANCE.
§18B-1-1d. Increasing flexibility and capacity for change.
(a) Retirement and separation incentives. -- Notwithstanding any other provisions of this code to the contrary, each state
institution of higher education may include in their strategic
plans, pursuant to section one-c of this article, policies that
offer various incentives for voluntary, early or phased
retirement of employees, or voluntary separation from employment,
when necessary to implement programmatic changes effectively
pursuant to the findings, directives, goals and objectives of
this article: Provided, That such incentives for voluntary, early
or phased retirement of employees, or voluntary separation from
employment must be submitted by the governing board to the
legislative joint committee on pensions and retirement and
approved before such policies are adopted as part of the
institution's strategic plan. The policies may include the
following provisions:
(1) Payment of a lump sum to an employee to resign or
retire;
(2) Continuation of full salary to an employee for a
predetermined period of time prior to the employee's resignation
or retirement and a reduction in the employee's hours of
employment during the predetermined period of time;
(3) Continuation of insurance coverage pursuant to the
provisions of article sixteen, chapter five of this code for a
predetermined period;
(4) Continuation of full employer contributions to an employee's retirement plan during a phased retirement period; and
(5) That an employee retiring pursuant to an early or phased
retirement plan may begin collecting an annuity from the
employee's retirement plan prior to the statutorily designated
retirement date without terminating their service with the
institution.
No incentive provided for in this section shall be granted
except in furtherance of programmatic changes undertaken pursuant
to the findings, directives, goals and objectives set forth in
this article.
No incentive proposed by an institution pursuant to this
section shall become a part of the institution's approved
strategic plan or be implemented without approval of the
legislative joint committee on pensions and retirement.
Any costs associated with any incentive adopted or
implemented in accordance with this section shall be borne
entirely by the institutions and no incentive shall be granted
that imposes costs on the retirement systems of the state or the
public employees insurance agency unless those costs are paid
entirely by the institutions.
The Legislature further finds and declares that there is a
compelling state interest in restricting the availability and
application of these incentives to individual employees
determined by the institutions to be in furtherance of the aims of this section and nothing herein shall be interpreted as
granting a right or entitlement of any such incentive to any
individual or group of individuals. Any employee granted
incentives shall be ineligible for reemployment by the
institutions during or after the negotiated period of their
incentive concludes including contract employment in excess of
eight thousand one hundred sixty dollars per fiscal year for
retirees under age sixty-five; in excess of eleven thousand two
hundred eighty dollars per fiscal year for retirees ages sixty-
five to sixty-nine; and retirees seventy and above may earn any
amount per fiscal year agreed upon by the parties to the
employment contract. five thousand dollars per fiscal year.
(b) Pilot flexibility initiative. -- The board of directors
is directed to submit a plan for a pilot flexibility initiative
to the legislative oversight commission on education
accountability on or before the first day of October, one
thousand nine hundred ninety-five. The plan shall include at
least the following: (1) A system whereby the state institutions
of higher education in the state college system may apply to the
board of directors for a waiver of board policies and rules; (2)
A detailed application for institutions seeking to participate in
the pilot flexibility initiative which shall set forth at a
minimum: (i) A statement of the specific goals and objectives
that the institution proposes to accomplish if the application is approved; (ii) the specific board policies and rules which the
institution seeks to have waived for all or a portion of the
waiver period; and (iii) proposed rules and policies under which
the institution would operate during the period of waiver; (3)
The process by which the board of directors will review the
application; (4) The person or body who shall have the final
authority to approve the application of not more than two
institutions; (5) The time period for which the waiver will be
granted; (6) The specific board policies and rules which the
institution may request to have waived; (7) The process by which
the rules and policies of the institutions participating in the
pilot flexibility initiative may modify its rules and policies;
and (8) The person or body to whom the institutions shall be
reporting during the period of waiver.
(c) It is the intent of this Legislature to review the pilot
flexibility plan and after such review to establish a pilot
flexibility initiative in the legislative session of one thousand
nine hundred ninety-six.
NOTE: The purpose of this bill is to match the allowable
earnings from reemployment with state institutions of higher
education for employees who retire under an early retirement
incentive program with the Social Security Administration
Earnings Test. This change will remove a disincentive for such
retirees to remain in West Virginia following retirement. Based
on estimates from the White House Conference on Aging, one
million dollars per year in local economic activity is generated
for every three retired persons based on retirement assets, purchases, property, etc.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.