H. B. 2668
(By Delegates Schadler, Leggett,
Manuel, Mezzatesta and Evans)
[Introduced February 5, 1999; referred to the
Committee on Pensions and Retirement then Finance.]
A BILL to amend and reenact section twenty-eight, article
seven-a, chapter eighteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, and to amend
and reenact section nine, article seven-b of said chapter
relating to providing for retirement annuity survivor
beneficiary options that allow members to designate someone
other than a spouse as a primary beneficiary.
Be it enacted by the Legislature of West Virginia:
That section twenty-eight, article seven-a, chapter eighteen
of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended and reenacted, and that
section nine, article seven-b of said chapter be amended and
reenacted, to read as follows:
ARTICLE 7A. STATE TEACHERS RETIREMENT SYSTEM.
§18-7A-28. Options to members; joint and survivor annuity;
modified joint and survivor annuity.
(a) The retirement board is hereby authorized to offer
plans, optional with the beneficiary, for the payment of
allowances due such beneficiary for retirement, withdrawal or
prior service pensions under the retirement system. No plans
shall be offered, however, which are not approved by competent
actuaries.
When a beneficiary and his spouse have been approved for a
retirement plan which provides for them a joint life annuity, and
their marriage is subsequently dissolved, the board shall permit
such beneficiary to convert to the maximum life annuity plan
approved by the board: Provided, That the beneficiary shall
furnish to the board proof of entry of a final decree of divorce
or annulment: Provided, however, That a beneficiary who qualifies
for the change of retirement plans afforded by this section shall
be permitted only one such change: Provided further, That the
recalculated monthly benefits, independently of increases granted
by law after the beneficiary's retirement, shall not exceed the
monthly benefits which would have been applicable under the
maximum life annuity plan a the time the beneficiary retired; and
with such recalculation to be effective on the first day of the
month following submission to the board by the beneficiary of
proof of entry of a final decree of divorce or annulment.
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 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.
ARTICLE 7B. TEACHERS' DEFINED CONTRIBUTION RETIREMENT SYSTEM.
§18-7B-9. Members' contributions; annuity account established; annuity options.
(a) 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.
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 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.
(b) Prior to the effective date of his or her retirement,
but not thereafter except upon the death of a spouse, 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 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.
NOTE: The purpose of this bill is to provide for a
retirement annuity survivor beneficiary option that allows a
member to designate someone other than a spouse as a primary
beneficiary.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.