Senate Bill No. 537
(By Senator Schoonover)
[Introduced February 19, 1996; referred to the Committee
on Pensions; and then to the Committee on Finance.]
A BILL to amend article ten, chapter five of the code of West
Virginia, one thousand nine hundred thirty-one, as amended,
by adding thereto a new section, designated section fifty-
five, relating to the West Virginia public employees
retirement act; and permitting members to borrow money from
their individual accounts.
Be it enacted by the Legislature of West Virginia:
That article ten, chapter five of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new section, designated section fifty-five, to
read as follows:
ARTICLE 10. WEST VIRGINIA PUBLIC EMPLOYEES RETIREMENT ACT.
§5-10-55. Loans to members.
A member of the retirement system upon written application
may borrow from the member's individual account in the members'
deposit fund, subject to these restrictions:
(1) Loans shall be made in multiples of ten dollars, the
minimal loan being one hundred dollars and the maximum being
eight thousand dollars except if the total amount of loaned money
outstanding exceeds forty million dollars, the maximum will be
three thousand dollars until the board of trustees determines
that loans outstanding have been reduced to an extent that eight
thousand dollar loans are again authorized.
(2) Loans to any one member may not exceed one half of the
member's contributions to his or her individual account in the
members' deposit fund.
(3) Interest charged on the amount of the loan shall be six
percent per annum, or a higher rate as set by the board of
trustees. If repayable in installments, the interest may not
exceed the annual rate so established upon the principal amount
of the loan, for the entire period of the loan, and the charge
shall be added to the principal amount of the loan. The minimal
interest charge shall be for six months.
(4) No member may be eligible for more than one loan in any
(5) If a refund or benefit is payable to the borrower or the
borrower's beneficiary before repayment of the loan with
interest, the balance due with interest to date shall be deducted
from the benefit or refund.
(6) The member shall pay the loan and interest by deductions
from the member's monthly salary which will pay the loan and
interest in not more than sixty nor less than six months. Upon
notice of loan granted and payment due, the employer shall be
responsible for making the salary deductions and reporting them
to the board. At the option of the board, loan deductions may be
collected as prescribed herein for the collection of members'
contribution, or may be collected through issuance of warrant by
employer. If the borrower decides to make loan payments while
not paid for service as an employee, the board must accept the
NOTE: The purpose of this bill is to permit members of the
West Virginia Public Employees Retirement System to borrow money
on their individual accounts.
§5-10-55 is new; therefore, strike-throughs and underscoring
have been omitted.