ENROLLED

H. B. 4227

(By Delegates Jenkins, Hubbard and Michael)



[Passed March 14, 1998; in effect from passage.]
AN ACT to amend and reenact section forty-one, article ten, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended; to amend and reenact sections two, three and five, article ten-b of said chapter; to further amend said article by adding thereto a new section, designated section ten; and to amend article ten-d of said chapter by adding thereto a new section, designated section seven, all relating to the West Virginia Public Employees Retirement Act; providing that the interest rate calculation be performed on a calender year basis; incorporating federal tax law limitations on the maximum compensation that can be taken into account for the purpose of determining retirement benefits and contributions to retirement plans; and incorporating federal requirements that all assets of government deferred pension plans be held in trust for the benefit of members and their beneficiaries.

 Be it enacted by the Legislature of West Virginia:
That section forty-one, article ten, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; that sections two, three and five, article ten-b of said chapter be amended and reenacted; that said article be further amended by adding thereto a new section, designated section ten; and that article ten-d of said chapter be amended by adding thereto a new section, designated section seven, all to read as follows:
ARTICLE 10. WEST VIRGINIA PUBLIC EMPLOYEES RETIREMENT ACT.
 §5-10-41. Allowance of regular interest on balances in funds.
The board of trustees shall, at the end of each calendar year, allow and credit regular interest on the balance at the beginning of the said fiscal year in each member's individual account in the members deposit fund, and on the mean balances in the employers accumulation fund and the retirement reserve fund. The interest so allowed and credited shall be charged to the income fund.
ARTICLE 10B. GOVERNMENT EMPLOYEES DEFERRED COMPENSATION PLANS.
 §5-10B-2. Definitions.
Unless the context in which used clearly indicates a different meaning, as used in this article:
(a) "Board" means the consolidated public retirement board provided for in article ten of this chapter.
(b) "Deferred compensation plan" means a trust whereby the state of West Virginia, as the public employer, or a public employer agrees with an employee for the voluntary reduction in employee compensation for the payment of benefits by the state employer or the public employer to the employee at a later date pursuant to this article and the federal laws and regulations relating to eligible state deferred compensation plans as described in Section 457 of the Internal Revenue Code.
(c) "Employee" means any person, whether appointed, elected, or under contract, providing services for the state employer or public employer, for which compensation is paid.
(d) "Public employer" means counties, municipalities or political subdivisions of such governmental bodies which meet the definition of "state" as described in Internal Revenue Code Section 457 (d) (1), but which do not meet the definition of "state employer" as used in this article.
(e) "State employer" means the state of West Virginia and any state agency or instrumentality of the state.
 §5-10B-3. Contracts for deferred compensation plans -- Approval
of plans -- Approval of companies providing
investments.
The state employer or any public employer may, by contract, agree with any of its employees to defer and hold in trust any portion of that employee's compensation and may subsequently purchase or acquire from any company licensed to do business in the state of West Virginia fixed or variable annuities, insurance, endowment, or savings account for the purpose of carrying out the objectives of the deferred compensation plan as described in this article.
 §5-10B-5. Investment of funds.
Notwithstanding any other provision of law to the contrary, the board, as well as the appropriate local officer, board or committee, designated as responsible for implementing a deferred compensation plan, is hereby authorized to invest compensation held pursuant to any such deferred compensation plan in fixed and variable annuities, mutual funds, insurance, endowment or savings accounts from any company duly authorized to contract such business in the state.
§5-10B-10. Deferred compensation plan funds held in trust.
Notwithstanding anything herein to the contrary, as of the first day of January, one thousand nine hundred ninety-eight, all assets and income of all deferred compensation plans created or administered pursuant to this article shall be held in trust for the exclusive benefit of participants and their beneficiaries.
ARTICLE 10D. CONSOLIDATED PUBLIC RETIREMENT BOARD.
§5-10D-7. Compensation limitations; effective dates.
Effective for plan years beginning after the thirty-first day of December, one thousand nine hundred ninety-five, the annual compensation of a participant taken into account in determining benefits or contributions under any of the public retirement plans administered by the board and which are qualified plans under section 401(a) of the Internal Revenue Code may not exceed one hundred fifty thousand dollars. This provision shall apply notwithstanding any other provision to the contrary in this code and not withstanding any provisions of any legislative rule.