ENGROSSED
COMMITTEE SUBSTITUTE
FOR
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 94
(By Senators Bowman and Snyder)
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[Originating in the Committee on Finance;
reported March 4, 1998.]
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A BILL to amend and reenact section thirty-five-b, article
seven-a, chapter eighteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
raising the earnings cap from two thousand five hundred
dollars to seven thousand five hundred dollars per year for
appointed or elected officials receiving incentive
retirement benefits; and removing obsolete provisions.
Be it enacted by the Legislature of West Virginia:
That section thirty-five-b, article seven-a, chapter eighteen of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended and reenacted to read as
follows:
ARTICLE 7A. STATE TEACHERS RETIREMENT SYSTEM.
§18-7A-35b. Temporary early retirement incentives program;
legislative declarations and findings; termination date.
Under the prior enactment of this section, the Legislature
hereby finds and declares found and declared that a compelling
state interest exists existed in providing a temporary, early
retirement incentives program for encouraging the early,
voluntary retirement of those public employees who were current,
active, contributing members of this retirement system on the
first day of April, one thousand nine hundred eighty-eight, in
the reduction of the number of such the employees and in
reduction of governmental costs therefor for the employees. that
such program constitutes a public purpose; and that the special
classifications and differentiations provided in respect of such
program are reasonable and equitable ones for the accomplishment
of such purpose and program as enacted in Enrolled Committee
Substitute for House Bill No. 4672, regular session, one thousand
nine hundred eighty-eight, and as clarified and supplemented
herein, retroactive to such beginning date, aforesaid. The
Legislature further finds found that maintaining an actuarily sound retirement fund is essential and that the reemployment in
any manner, including reemployment on a contract basis, by the
state of any person who retires retired under this section is
contrary to the intent of the early retirement program and
severely threatens the fiscal integrity of the retirement fund.
The early retirement program under the prior enactment of this
section, offered employees three retirement incentive options.
Any person who retired under the provisions of the prior
enactment of this section are subject to the restrictions
contained in this section.
(a) For the purposes of this section: (1) "Contract" means
any personal service agreement, not involving the sale of
commodities, that cannot be performed within sixty days or for
which the total compensation exceeds two thousand five hundred
dollars seven thousand five hundred dollars in any twelve-month
period. The term "contract" does not include any agreement
obtained by a retirant through a bidding process and which is for
the furnishing of any commodity to a government agency; (2)
"governmental entity" means the state of West Virginia; a
constitutional branch or office of the state government, or any
subdivision thereof of state government; a county, city or town
in the state; a county board of education; a separate corporation
or instrumentality established pursuant to a state statute; any other entity currently permitted to participate in any state
public retirement system or the public employees insurance
agency; or any officer or official of any entity listed above in
this subsection who is acting in his or her official capacity;
(3) "substitute teacher" means a teacher, public school
librarian, registered professional nurse employed by the county
board of education or any other person employed for counselling
or instructional purposes in a public school in this state who is
temporarily fulfilling the duties of an existing real person
employed in a specific position who is temporarily absent from
that specific position; and (4) "part-time elected or appointed
office" means any elected or appointed office that compensates
its members in an amount less than two thousand five hundred
dollars or requires less than sixty days of service in any
twelve-month period.
(b) Beginning on the first day of April, one thousand nine
hundred eighty-eight, and continuing through the thirty-first day
of December, one thousand nine hundred eighty-eight (or as
extended by contract or by eligibility qualification requirement,
as hereinafter specified), eligible members, being those active,
contributing members actually and currently employed on such
beginning date, retiring pursuant to this section (except
disability retirees, but including those so employed on said beginning date and leaving the system during the incentive period
and who are eligible for deferred benefits), may elect to
participate in this incentive program and may elect any one of
the three following incentive options:
(1) Retirement incentive option one:
For the purpose of computing the member's annuity, the
normal final average salary shall be computed and one eighth
thereof shall be added thereto in arriving at the true final
average salary for use in actual computation of retirement
benefit.
(2) Retirement incentive option two:
A member may elect a lump sum payment, in addition to his
regular retirement annuity, equal to ten percent of his final
average salary not to exceed five thousand dollars, and in the
case of a deferred retirement electing this option, such lump sum
payment shall be receivable and deferred to the time of receipt
of such deferred retirement annuity.
(3) Retirement incentive option three:
A person shall be credited with an additional two years of
contributing service and an additional two years of age. The
years credited under this option shall in no way add to a
member's final average salary factor of computation.
(c) Eligible, active, contributing members, aforesaid, employed under agreement and rendering services during school
year one thousand nine hundred eighty-eight--eighty-nine shall,
if retiring pursuant to the provisions of this section and the
early retirement incentive program set forth herein, make
application for retirement, including choice of their respective
option, and give notice to their respective county boards of
education by the thirty-first day of December, one thousand nine
hundred eighty-eight, but shall be permitted to postpone actual
retirement until immediately after the close of such agreement
period and said school year; with proper credit to be granted for
such extended period.
Also, eligible, active, contributing members employed, not
under agreement, who desire to retire under this section but who
are unable to retire by the thirty-first day of December, one
thousand nine hundred eighty-eight, because an element of
eligibility for retirement, such as age or other element, will
not be met until a date after the thirty-first day of December,
one thousand nine hundred eighty-eight, and before the first day
of July, one thousand nine hundred eighty-nine, shall be
permitted to postpone actual retirement until the date of
fulfilling such element of eligibility and shall retire on such
date, before the temporary retirement incentive program ends on
the thirtieth day of June, one thousand nine hundred eighty-nine; with proper credit to be granted for such extended period:
Provided, That members eligible under the preceding paragraph and
this paragraph shall have made application for retirement,
including choice of their respective option, and given notice to
their respective employer by the thirty-first day of December,
one thousand nine hundred eighty-eight, although postponing
actual retirement, as aforesaid: Provided, however, That an
application for retirement under the provisions of the preceding
paragraph and this paragraph shall be binding upon a member
unless the member provides the retirement system and the local
board of education or other educational agency with written
notification of his or her decision not to retire by the first
day of April, one thousand nine hundred eighty-nine: Provided
further, That an eligible member under this paragraph or the
preceding paragraph who has a grievance or court proceeding which
is pending on the passage date of this bill, shall be required to
give final notice of decision not to retire by the thirtieth day
of June, one thousand nine hundred eighty-nine: And provided
further, That the state teachers retirement board on or before
the twenty-fourth day of March, one thousand nine hundred eighty- nine, shall provide calculations of anticipated retirement
benefits to those members who intend to retire pursuant to the
provisions of this section.
Eligible members, other than those covered under the
provisions of the two preceding paragraphs, desiring to retire
under this incentive program shall make their option election
prior to and take their respective retirement by the close of the
thirty-first day of December, one thousand nine hundred eighty- eight.
Any eligible member who retires hereunder during the school
year (after the first day of July, one thousand nine hundred
eighty-eight, and on any date prior to the thirtieth day of June,
one thousand nine hundred eighty-nine) shall have included such
months of such school year and the salary in respect thereof, if
ones of higher salary, in place of and for any like number of
months in his or her five-year period for computation of
annuities as provided for in section twenty-six of this article.
(d) (b) Any member participating in this who participated in
the retirement incentive program under the prior enactment of
this section is not eligible to accept further employment or
accept, directly or indirectly, work on a contract basis from a
governmental entity: Provided, That nothing in this section
shall effect any contract entered into prior to the effective
date of this section: Provided, however That the executive
director may approve, upon written request for good cause shown,
an exception allowing a retirant to perform work on a contract basis: Provided, further however, That a person may retire under
this section and thereafter serve in an elective office: And
Provided further, That he or she shall not receive an the
incentive option he or she elected under the prior enactment of
this section during the term of service in said that office for
which the total compensation exceeds seven thousand five hundred
dollars, but shall receive his or her annuity calculated on
regular basis, as if originally taken not under the prior
enactment of this section but on such a regular basis. At the
end of such the term and cessation of service in such the office,
such the incentive option shall resume resumes. In respect of an
appointive office, as distinguished from an elective office, any
person retiring under this section and thereafter serving in such
the appointive office for which the total compensation exceeds
seven thousand five hundred dollars shall not receive an the
incentive option he or she elected under the prior enactment of
this section during the term of service in said that office, but
the same incentive option shall be suspended resumes during such
that period: And provided further, That at the end of such the
term and cessation of service in such the appointive office the
incentive option provided for under the prior enactment of this
section shall be resumed resumes: And provided further, That any
person elected or appointed to office by the state or any of its political subdivisions who waives whatever salary, wage or per
diem compensation he or she may be entitled to by virtue of
service in such that office and who does not receive any income
therefrom from service in that office except such the
reimbursement of out-of-pocket costs and expenses as may be that
are permitted by the statutes governing such the office shall
continue to receive an the incentive option he or she elected
under this section. Such The service shall may not be counted as
contributed or credited service for purposes of computing
retirement benefits.
(c) If such the elected or appointed office is a part-time
elected or appointed office, a person electing retirement under
this section may serve in such the elective or appointive office
with no loss of the benefits provided under the prior enactment
of this section.
(d) Prior to the initiation or renewal of any contract for
which the total compensation exceeds seven thousand five hundred
dollars and entered into pursuant to this section or the
acceptance of any elective or appointive office for which the
total compensation exceeds seven thousand five hundred dollars,
a person who has elected to retire under the early retirement
provisions of the prior enactment of this article section shall
complete a disclosure and waiver statement executed under oath and acknowledged by a notary public. The board shall promulgate
propose rules for promulgation, pursuant to article three,
chapter twenty-nine-a of this code, regarding the form and
contents of the waiver and disclosure statement. The disclosure
and waiver statement shall be forwarded to the appropriate state
public retirement system administrator who shall take action to
ensure that the early retirement incentive option benefit is
reduced in accordance with the provisions of this section. The
administrator shall then certify such that action in writing to
the appropriate governmental entity.
(e) In any event, an eligible member may retire who retired
under the prior enactment of this section and thereafter may
continue to receive his or her incentive annuity and be employed
as a substitute teacher, as adjunct faculty, as a school service
personnel substitute, or as a part-time member of the faculty of
southern West Virginia community college or West Virginia
northern community college: Provided, That the board of
directors determines that the part-time employment is in
accordance with policies to be adopted by the board regarding
adjunct faculty. For purposes of this section, a "part-time
member of the faculty" means an individual employed solely to
provide instruction for not more than twelve college credits per
semester.
(f) Any such incentive retirants, under the prior enactment
of this section, may not thereafter receive such an annuity and
enter or reenter any governmental retirement system established
or authorized to be established by the state, notwithstanding any
provision of the code to the contrary, unless required by
constitutional provision.
(g) The additional annuity allowed for temporary early
retirement under these options is intended to be paid from the
retirement incentive account hereby created as a special account
in the state treasury and from the funds therein in the special
account established with moneys required to be applied or
transferred by heads of spending units from the unused portion of
salary and fringe benefits in their budgets accruing in respect
to such the positions vacated and subsequently canceled under
this temporary early retirement program. Salary and fringe
benefit moneys actually saved in a particular fiscal year shall
constitute the fund source. No such additional annuity shall be
disallowed even though initial receipts may not be sufficient,
with funds of the system to be applied for such the purpose, as
for the base annuity.
(e) The executive secretary of the retirement system shall
provide forms for applicants. Such forms shall include a
detailed description of the incentive plan options.
(h) The executive secretary of the retirement system shall
file a quarterly report to the Legislature no later than the
fifteenth day of February, one thousand nine hundred eighty-nine,
and quarterly thereafter, detailing the number of retirees who
have elected to accept early retirement incentive options, the
dollar cost to date by option selected, and the projected annual
cost through the year two thousand.
(f) Within every spending unit, department, board,
corporation, commission, or any other agency or entity wherein
two or multiples of two members elect to retire either under the
temporary early retirement incentives set forth above, or under
regular, voluntary retirement, and countable on an agency-wide or
entity-wide basis, no more than one of such vacated positions may
be filled, with the second position being abolished upon the
effective day of the member's retirement: Provided, That county
boards of education in replacing employees leaving under this
temporary early retirement incentive program shall be eligible to
replace in that number as authorized by the basic school aid
formula and pursuant to those guidelines in respect of number of
positions lost or projected to be lost due to declining
enrollment, changes in statutes, changes in state appropriations
and the other guidelines set forth and contained within said
basic school aid formula. The vacant position abolishment requirement shall not apply to elective positions or appointed
public officers whose positions are established by state
constitutional or statutory provision. The retirant's employing
entity shall decide as to which of the vacated positions made
available through special early retirement or through regular,
voluntary retirement are to be abolished and the head of such
spending unit shall immediately notify the state auditor, the
legislative auditor, and the commissioner of the department of
finance and administration of the decisions and shall then apply
and/or transfer, as aforesaid, the remaining salary and fringe
benefit appropriations: Provided, however, That this vacant
position abolishment provision shall not apply to any county
position, other than those under the authority of county boards
of education, nor to any position or positions, whether
designated by spending unit, department, agency, commission,
entity or otherwise, which the governor may exempt or amend under
such abolishment provision upon his recommendation that such
exemption or amendment is necessary to preserve the health,
welfare or safety of the people of West Virginia, and with the
prior concurrence of the joint committee on government and
finance in such recommendation, after the chairmen thereof shall
cause such committee to meet.
(g) Special rule of eighty. -- Any active, contributing member of the retirement system as of the first day of April, one
thousand nine hundred eighty-eight, who selects one of the
incentive options in this section, may retire under the special
early retirement provisions with full pension rights, without
reduction of benefits if the sum of such member's age plus years
of contributing service equals or exceeds eighty: Provided, That
such person has at least twenty years of contributing service, up
to two years of which may be military service, or prior service,
or already paid and credited out-of-state service (if so paid and
credited by the first day of April, one thousand nine hundred
eighty-eight) or any combination thereof not exceeding an
aggregate of two years.
(h) (i) Termination of temporary retirement incentives
program. -- The right to elect, choose, select or use any of the
options, special rule of eighty or other benefits set forth in
retire under this section shall terminate terminated on the
thirtieth day of June, one thousand nine hundred eighty-nine.