H. B. 2065
(By Delegates Hubbard, Damron, Tucker and Caputo)
[Introduced January 13, 1999; referred to the
Committee on Pensions and Retirement.]
A BILL to amend and reenact sections seven and nine, article
seven-b, chapter eighteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, all relating
to reentry into the teacher retirement system and additional
voluntary contributions to the defined contribution
retirement system; and consolidated public employees
retirement board to conduct study of feasibility of allowing
employee contributions to defined contribution system in
addition to statutory required contributions.
Be it enacted by the Legislature of West Virginia:
That sections seven and nine, article seven-b, chapter
eighteen of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended and reenacted, all to read as
follows:
ARTICLE 7B. TEACHERS' DEFINED CONTRIBUTION RETIREMENT SYSTEM.
§18-7B-7. Participation in teachers' defined contribution retirement system; limiting participation in existing teachers' retirement system.
Beginning the first day of July, one thousand nine hundred
ninety-one, the teachers' defined contribution retirement system
shall be the single retirement program for all new employees
whose employment commences on or after that date. No additional
new employees except as may be provided herein may be admitted to
the existing retirement system. Members of the existing
retirement system whose employment continues beyond the first day
of July, one thousand nine hundred ninety-one, are not affected
by this article and shall continue to contribute and participate
in the existing system without change in provisions or benefits.
Notwithstanding the provisions of section twenty-three,
article seven-a of this chapter, any employee whose employment
terminates after the thirtieth day of June, one thousand nine
hundred ninety-one, who is later reemployed by an employer shall
be eligible for membership only in the teachers' defined
contribution system: Provided, That if such reemployment with an
existing employer occurs not more than six months after the
employee's previous employment, he or she shall be entitled to
readmission to the existing retirement system in which he or she was originally a member: Provided, however, That if such the
employee has five or more years of credited service in the
existing retirement system, he or she shall be entitled to
readmission into the existing retirement system in which he or
she was originally a member so long as he or she has not
withdrawn his or her contributions from the existing retirement
system: Provided further, That if such the employee has
withdrawn his or her contribution from the existing retirement
system, then readmission shall not be permitted and the employee
will be entitled only to the defined contribution system. Any
employee reemployed with an employer on or after the first day of
July, one thousand nine hundred ninety-one, who had five or more
years credited service in the existing teachers' retirement
system may elect readmission to the existing teachers' retirement
system in which he or she was originally a member. Any employee
reemployed with an employer between the first day of July, one
thousand nine hundred ninety-one, and the first day of July, one
thousand nine hundred ninety-five, and who was required upon
reemployment to participate in the teachers' defined contribution
system but now elects pursuant to the provisions of this
paragraph readmission to the existing teachers' retirement system
in which he or she was originally a member shall pay an
additional contribution equal to one and one-half percent of his or her annual gross compensation earned for each year he or she
participated in the teachers' defined contribution system and
transfer all contributions from the teachers' defined
contribution system to the existing teachers' retirement system
and shall receive service credit for the time the employee
participated in the defined contribution system as if that
participation had been in the existing teachers retirement
system.
An employee whose employment with an employer was suspended or
terminated while he or she served as an officer with a statewide
professional teaching association is eligible for readmission to
the existing retirement system in which he or she was a member.
Any employee reemployed with an employer on or after the first
day of July, one thousand nine hundred ninety-one, who had five
or more years credited service in the teachers' defined benefit
retirement system may elect readmission to the teachers' defined
benefit retirement system in which he or she was originally a
member. Any employee reemployed between the first day of July,
one thousand nine hundred ninety-one, and the first day of July,
one thousand nine hundred ninety-five, and who was required to
participate in the teachers' defined contribution system but now
elects, pursuant to the provisions of this section, readmission
to the teachers' defined benefit retirement system shall pay an
additional contribution to the teachers' defined benefit retirement system equal to one and one-half percent of his or her
annual gross compensation earned for each year he or she
participated in the teachers' defined contribution system and
shall transfer all member and employer contributions and
investment earnings therefrom from the teachers' defined
contribution system to the teachers' defined benefit retirement
system and shall receive service credit for the time the member
participated in the defined contribution system as if that
participation had been in the teachers' defined benefit
retirement system. Any member making an election under the
provisions of this section to reenter the teachers' defined
benefit retirement system who is currently a member of the
defined contribution retirement system must do so on or before
the first day of January, one thousand nine hundred ninety-six.
Any other member reemployed must make the election as to the
retirement system that he or she will be a member of at the time
he or she is reemployed.
An employee whose employment with an employer or an existing
employer is suspended as a result of an approved leave of
absence, approved maternity or paternity break in service, or any
other approved break in service authorized by the board, is
eligible for readmission to the existing retirement system in
which he or she was a member.
In all cases where a question exists as to readmission to membership in the existing retirement system, the board shall
decide the question.
§18-7B-9. Members' contributions; annuity account established.
Each employee who is a member of the defined contribution
system shall contribute four and one-half percent of his or her
gross compensation by salary reduction. Such salary reductions
shall be made by the employer at the normal payroll intervals and
shall be remitted within five working days to the private
pension, insurance, annuity, mutual fund, or other qualified
company or companies designated by the board to administer the
day-to-day operations of the system.
The consolidated public employees retirement board shall study
the feasibility of employees making personal contributions to the
defined contribution system in addition to those required by this
section and the impact of the United States Internal Revenue Code
upon such contributions. The results of the study and
recommendations for legislation to authorize such additional
payments shall be presented to the committee on pensions and
retirement of each house of the Legislature on or before the
first day of October, one thousand nine hundred ninety-nine.
All member contributions shall be immediately deposited to an
account or accounts established in the name of the member and
held in trust for the benefit of the member. An account
agreement shall be issued to each member setting forth the terms and conditions under which contributions are received, and the
investment and retirement options available to the member. The
board shall promulgate by the thirtieth day of June, one thousand
nine hundred ninety-one, pursuant to section six of this article,
rules defining the minimum requirements for the investment and
retirement options to be provided to the members.
The consolidated public employees retirement board shall study
the feasibility of employees making personal contributions to the
defined contribution system in addition to those required by this
section and the impact of the United States Internal Revenue Code
of one thousand nine hundred eighty-six, as amended, upon such
the contributions. The results of said study and recommendations
for legislation to authorize such additional payments shall be
presented to the committee on pensions and retirement of each
house of the Legislature on or before the first day of October,
one thousand nine hundred ninety-six.
Such Rules, to the extent not inconsistent with the applicable
provisions of the Internal Revenue Code of the United States,
shall provide for varied retirement options including, but not
limited to:
(1) Lump sum distributions;
(2) Joint and survivor annuities;
(3) Other annuity forms in the discretion of the board;
(4) Variable annuities which gradually increase monthly retirement payments: Provided, That said increased payments are
funded solely by the existing current value of the member's
account at the time the member's retirement payments commencement
and not, to any extent, in a manner which would require
additional employer or employee contributions to any member's
account after retirement or after the cessation of employment;
and
(5) The instances in which, if any, distributions or loans can
be made to members from their annuity account balances prior to
having attained the age of fifty-five.
NOTE: The purpose of this bill is to allow employees who were
employed on or after July 1, 1991, who had five or more years of
credited service in the teachers' retirement system to return to
the original retirement system upon reemployment and to require
the Consolidated Public Retirement Board to study the feasibility
of allowing members of the defined contribution system to make
voluntary additional contributions annually.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that
would be added.