COMMITTEE SUBSTITUTE

FOR

H. B. 2495

(By Delegate Warner)

[Originating in the Committee on Finance]

[February 27, 1998]




A BILL to amend and reenact sections twenty-four and forty-six, article ten, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to the West Virginia public employees retirement act; providing annuity options at retirement and upon the death or divorce of a spouse; requiring proof by a preponderance of the evidence regarding re-election of options upon death or divorce of a spouse; providing annuity options where a qualified domestic relations order is in effect as to the benefits allotted the member under such order; and establishing that public employees retirement benefits are subject to qualified domestic relations orders.

Be it enacted by the Legislature of West Virginia:
That sections twenty-four and forty-six, article ten, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted, all to read as follows:
ARTICLE 10. WEST VIRGINIA PUBLIC EMPLOYEES RETIREMENT ACT.
§5-10-24. Annuity options.
Prior to the effective date of his or her retirement, but not and thereafter except upon the death or divorce of a spouse as set forth in this section, a member may elect to receive his or her annuity as a straight life annuity payable throughout his or her life, or he or she may elect to receive the actuarial equivalent, at the time, of his or her straight life annuity in a reduced annuity payable throughout his or her life, and nominate a beneficiary, in accordance with option A or B set forth below:
Option A -- Joint and survivor annuity. -- Upon the death of a retirant, who elected option A, his or her reduced annuity shall be continued throughout the life of and paid to the beneficiary, having an insurable interest in the retirant's life, whom the retirant nominated by written designation duly executed and filed with the board of trustees prior to the effective date of his or her retirement; or
Option B -- Modified joint and survivor annuity. -- Upon the death of a retirant who elected option B, one half of his or her reduced annuity shall be continued throughout the life of and paid to the beneficiary, having an insurable interest in the retirant's life, whom the retirant nominated by written designation duly executed and filed with the board of trustees prior to the effective date of his or her retirement.
Upon the death of a spouse, a retirant may elect any of the retirement options option offered by the provisions of this section in an amount adjusted on a fair basis to be of equal actuarial value as the annuity prospectively in effect relative to the surviving member at the time the new option is elected. under which benefits shall be paid in an amount which makes the newly elected annuity the actuarial equivalent of the previously elected annuity.
A member who divorces after initial annuity selection may thereafter elect any retirement option provided by this section, under which benefits shall be paid in an amount which makes the newly elected annuity the actuarial equivalent of the previously elected annuity, where a divorced member proves by a preponderance of the evidence at a hearing before the consolidated public retirement board:
(a) That a qualified domestic relations order is in effect and excludes public employees retirement system benefits from marital distribution to the divorced member's former spouse, or;
(b) That the member's divorce order includes a waiver of the member's former spouse's rights to public employees retirement system benefits, or;
(c) That a divorced spouse cannot be located, and that due diligence has been applied in a search of at least three years, and that publication has been made by Class III legal advertisement as defined in section two, article three, chapter fifty-nine of this code, within one calendar year of election of the new annuity option, in the county having jurisdiction of the divorce action.
Where a qualified domestic relations order is in effect, a member who divorces thereafter elect any retirement option provided by this section as to his or her remaining benefits, as provided in the qualified domestic relations order: Provided, That in any such election the benefits shall be paid in an amount which makes the newly elected annuity the actuarial equivalent of the previously elected annuity: Provided, however, That the elections set forth in this section may only be made by a member: Provided further, That in no event may the board pay any benefits to the divorced spouse of a member until such time as the member begins receiving benefits.
§5-10-46. Right to benefits not subject to execution, etc.; assignments prohibited; subject to qualified domestic relations order; deductions for group insurance; setoffs for fraud.

The right of a person to any benefit provided for in this article shall not be subject to execution, attachment, garnishment, the operation of bankruptcy or insolvency laws, or other process whatsoever, nor shall any assignment thereof be enforceable in any court, with the exception that such benefits are subject to a qualified domestic relations order as that term is defined in section 414 (p) of the Internal Revenue Code: Provided, That should a member be covered by a group insurance or prepayment plan participated in by a participating public employer, and should he or she be permitted to, and elect to, continue such coverage as a retirant, he may authorize the board of trustees to have deducted from his or her annuity the payments required of him to continue coverage under such group insurance or prepayment plan: Provided, however, That a participating public employer shall have the right of setoff for any claim arising from embezzlement by, or fraud of, a member, retirant or beneficiary.