Senate Bill No. 694

(By Senator Helmick)

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[Introduced February 23, 1998; referred to the Committee on Pensions; and then to the Committee on Finance.]
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A BILL to amend and reenact section eighteen, article ten, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend and reenact section eleven, article seven-b, chapter eighteen of said code, all relating to the public employees retirement system; termination of membership; reentry; extending the time in which to make repayments for certain members; the teachers' defined contribution retirement system; and authorizing transfer of service credit and retirement account to the public employees retirement system if a teacher's employment is terminated with a participating employer and the person is later employed by a state agency.

Be it enacted by the Legislature of West Virginia:
That section eighteen, article ten, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that section eleven, article seven-b, chapter eighteen of said code be amended and reenacted, all to read as follows:
CHAPTER 5. GENERAL POWERS AND AUTHORITY OF THE GOVERNOR,SECRETARY OF STATE AND ATTORNEY GENERAL; BOARD OF PUBLIC WORKS; MISCELLANEOUS AGENCIES, COMMISSIONS, OFFICES, PROGRAMS, ETC.

ARTICLE 10. WEST VIRGINIA PUBLIC EMPLOYEES RETIREMENT ACT.
§5-10-18. Termination of membership; reentry.
(a) When a member of the retirement system retires or dies, he or she ceases to be a member. When a member leaves the employ of a participating public employer for any other reason, he or she ceases to be a member and forfeits service credited to him or her at that time. If he or she becomes reemployed by a participating public employer he or she shall be reinstated as a member of the retirement system and his or her credited service last forfeited by him or her shall be restored to his or her credit: Provided, That he or she must be reemployed for a period of one year or longer to have the service restored: Provided, however, That he or she returns to the members' deposit fund the amount, if any, he or she withdrew from the fund, together with regular interest on the withdrawn amount from the date of withdrawal to the date of repayment, and that the repayment begins within two years of the return to employment and that the full amount is repaid within five years of the return to employment: Provided further, That any member who withdrew from the fund before the thirty-first day of December, one thousand nine hundred sixty-nine, and has reentered the system may repay the full amount on or before the thirty-first day of December, one thousand nine hundred ninety-nine.
(b) Effective on the first day of July, one thousand nine hundred ninety-seven, and continuing through the first day of July, one thousand nine hundred ninety-eight, any employee of the Prestera center for mental health services, valley comprehensive mental health center, Westbrook health services and eastern panhandle mental health center who is a member of the retirement system may elect to withdraw from membership without forfeiting service credited to him or her.
(c) The Prestera center for mental health services, valley comprehensive mental health center, Westbrook health services and eastern panhandle mental health center, and their successors in interest, shall provide for their employees a pension plan in lieu of the public employees retirement system on or before the first day of July, one thousand nine hundred ninety-seven, and continuing thereafter during the existence of the named mental health centers and their successors in interest.
(d) The administrative bodies of the Prestera center for mental health services, valley comprehensive mental health center, Westbrook health services and eastern panhandle mental health center shall, on or before the first day of May, one thousand nine hundred ninety-seven, give written notice to each employee who is a member of the public employees retirement system of the option to withdraw from or remain in the system. The notice shall include a copy of this section and a statement explaining the member's options regarding membership. The notice shall include a statement in plain language giving a full explanation and actuarial projection figures in support of the explanation regarding the individual member's current account balance, vested and nonvested, and his or her projected return upon remaining in the public employees retirement system until retirement, disability or death, in comparison with the projected return upon withdrawing from the public employees retirement system and joining a private pension plan provided by the community mental health center and remaining therein until retirement, disability or death. The administrative bodies shall keep in their respective records a permanent record of each employee's signature confirming receipt of the notice.
CHAPTER 18. EDUCATION.

ARTICLE 7B. TEACHERS' DEFINED CONTRIBUTION RETIREMENT SYSTEM.

§18-7B-11. Termination of membership.

Any member whose employment with a participating employer terminates after the completion of six complete years of employment service shall be eligible to terminate his or her annuity account and receive a distribution from the member's annuity account, in an amount equal to the member's contribution plus one third of the employer contributions and any earnings thereon. Any member whose employment with a participating employer terminates after the completion of nine complete years of employment service shall be eligible to terminate his or her annuity account and receive a distribution from the member's annuity account, in an amount equal to the member's contribution plus two thirds of the employer's contributions and any earnings thereon. Any member whose employment with a participating employer terminates after the completion of twelve complete years of employment service shall be eligible to terminate his or her annuity account and receive a distribution of all funds contributed and accumulated in his or her annuity account. Any member whose employment with a participating employer terminates prior to the completion of six complete years of employment service shall be eligible to terminate his or her annuity account and receive a distribution from the member's annuity account, in an amount equal to the member's contribution plus any earnings thereon: Provided, That on the death or permanent, total disability of any member, that member shall be eligible to terminate his or her annuity account and receive all funds contributed to or accumulated in his or her annuity account.
The remaining balance, if any, in the member's account after the distribution shall be remitted and paid into a suspension account, hereby created, to be administered by the board. The board shall promulgate rules regarding the distribution of any balance in the special account created by this section: Provided, That any funds in the account shall be used solely for the purpose of reducing employer contributions in future years.
Any account balances remitted to the suspension account herein shall be maintained by the board in said the suspension account in the name of the terminated employee for a period of five years following initial remittance to the suspension account. For each said terminated employee at the culmination of the aforesaid five-year period, the board shall certify in writing to each contributing employer the amount of the account balances plus earnings thereon attributable to each separate contributing employers previously terminated employees' accounts which have been irrevocably forfeited due to the elapse of a five-year period since termination pursuant to section sixteen of this article.
Upon certification to the several contributing employers of the aggregate account balances plus earnings thereon which have been irrevocably forfeited pursuant to this section, the several contributing employers shall be permitted in the next succeeding fiscal year or years to reduce their total aggregate contribution requirements pursuant to section seventeen of this article, for the then current fiscal year by an amount equal to the aggregate amounts irrevocably forfeited and certified as such to each contributing employer.
Upon the utilization of the amounts irrevocably forfeited to any contributing employer as a reduction in the then current fiscal year contribution obligation and upon notification provided by the several contributing employers to the board of their intention to utilize irrevocably forfeited amounts, the board shall direct the distribution of said the irrevocably forfeited amounts from the suspension account to be deposited on behalf of the contributing employer to the member annuity accounts of its then current employees pursuant to section seventeen of this article.
If a member's employment terminates within the time periods provided for in this section and the member is then later employed by a state agency, the member may transfer the service time and retirement account, including all contributions made to that account by both the member and employer, from the defined contribution system to the public employees retirement system and shall receive full credit towards retirement for the service earned as a teacher.


NOTE: The purpose of this bill is to extend the time in which certain members of the retirement system have to repay contributions that were withdrawn, when the member reenters the retirement system. If the person withdrew from the system before December 31, 1969, and reenters the system, that person may pay back funds withdrawn, together with interest, on or before December 31, 1999, in order to get credit for retirement. It also permits the transfer of service credit and retirement account to the public employees retirement system from the teachers' defined contribution retirement system if a teacher's employment is terminated with a participating employer in the defined contribution system and that person is later employed by a state agency.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.