H. B. 4407
(By Delegate Pino)
[Introduced February 4, 2000; referred to the
Committee on Pensions and Retirement then Finance.]
A BILL to amend and reenact section twenty-two-c, article ten,
chapter five of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to public employees
retirement; deleting certain restrictions on persons who
exercised early retirement options and setting forth an
effective date.
Be it enacted by the Legislature of West Virginia:
That section twenty-two-c, article ten, chapter five of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 10. WEST VIRGINIA PUBLIC EMPLOYEES RETIREMENT ACT.
§5-10-22c. Temporary early retirement incentives program;
legislative declaration and finding of
compelling state interest and public purpose;
specifying eligible and ineligible members for
incentives program; options, conditions, and exceptions; certain positions abolished;
special rule of eighty; effective, termination,
and notice dates.
The Legislature hereby finds and declares that a compelling
state interest exists 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 employees and in reduction of
governmental costs therefor; 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 H. B. 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 that maintaining an actuarily actuarially sound
retirement fund is a necessity and that the reemployment of
persons who retire under this section in any manner, including
reemployment on a contract basis, is contrary to the intent of
the early retirement program and severely threatens the fiscal
integrity of the retirement fund.
(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 that
exceeds two 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 and that
term does not include any person who retired under this section
who works as a contract employee for the Legislature for less
than two hundred days per calendar year when such employment
commences after the thirty-first day of December, one thousand
nine hundred ninety-nine; (2) "governmental entity" means the
state of West Virginia; a constitutional branch or office of the
state government, or any subdivision thereof; 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 who is acting in his or her official capacity; (3) "part-
time elected or appointed office" means any elected or appointed
office that pays annual compensation of less than two thousand
five hundred dollars or requires less than sixty days of service
in any twelve-month period; (4) "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 counseling 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 specified position.
(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 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, and from any state, county or
municipal position, covered under the two divisions of this
retirement system (the state division and the public employer,
nonstate division) including those so employed on said beginning
date and leaving the system during the incentive period and who
are eligible for taking deferred retirement (but not disability
retirees) 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.
Active, contributing members 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, and make use of
the incentive retirement program 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 they 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.
(c) Any member participating in this retirement incentive
program is not eligible to accept further employment or accept,
directly or indirectly, work on a contract basis from any
governmental entity: Provided, That nothing in this section
shall affect any contract entered into prior to the effective
date of this section: Provided, however, That the executive
director may approve, upon written request and for good cause
shown, an exception allowing a retirant to perform work on a
contract basis. The executive director shall report all approved
exceptions to the board of trustees: Provided further, That a
person may retire under this section and thereafter serve in an
elective office: And provided further, That he shall not receive
an incentive option under this section during the term of service
in said office, but shall receive his or her annuity calculated
on regular basis, as if originally taken not under this section
but on such regular basis. At the end of such term and cessation
of service in such office during which the member shall rejoin
and reenter the retirement system and pay contributions therefor,
such regular annuity shall be recalculated and an increased
annuity due to such additional employment shall be granted and
computed on regular basis and in similar manner as under section forty-eight of this article. In respect of an appointive office,
as distinguished from an elective office, any person retiring
under this section and thereafter serving in such appointive
office shall not receive an incentive option under this section
during the term of service in said office, but the same shall be
suspended during such period: And provided further, That at the
end of such term and cessation of service in such appointive
office the incentive option provided for under this section shall
be resumed: 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 may be entitled to by virtue of service in such
office and who does not receive any income therefrom except such
reimbursement of out-of-pocket costs and expenses as may be
permitted by the statutes governing such office shall continue to
receive an incentive option under this section. Such service
shall not be counted as contributed or credited service for
purposes of computing retirement benefits.
If such elected or appointed office is a part-time elected
or appointed office, a person electing retirement under this
section may serve in such elected or appointed office without a
loss of the benefits provided under this section.
Prior to the initiation or renewal of any contract entered
into pursuant to the provisions of this section or the acceptance
of any elective or appointive office by a person who has elected to retire under the early retirement provisions of this article,
such person shall complete a disclosure and waiver statement
executed under oath and acknowledged by a notary public. The
board shall promulgate rules, pursuant to chapter twenty-nine-a,
of this code regarding the form and contents of the disclosure
and waiver 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 benefits are reduced in accordance with the
provisions of this section. The administrator shall then certify
such action in writing to the appropriate governmental entity.
In any event, an eligible member may retire under this
section and thereafter continue to receive his incentive annuity
and be employed as a substitute teacher or as adjunct faculty.
Any such incentive retirants, under this section, may not
thereafter receive such 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
or as hereby specifically permitted to those retiring and
thereafter serving in elective office, as aforesaid.
The additional annuity allowed for temporary early
retirement under these options, in respect of state division
retirants of this system, 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 established with
moneys required to be transferred by heads of spending units from
the unused portion of salary and fringe benefits in their budgets
accruing in respect of such 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 for payment of such
additional annuity, the funds of the retirement system to be used
for payment of the base annuity under the early retirement
incentive program: Provided, That such additional annuity shall
be paid from the unused portion of both salary and fringe
benefits and with any remainder of any fringe benefit moneys, as
such, to remain with the spending unit and any remainder of
salary, as such, to be directed as additional funding to the
teachers retirement system and as a part of the assets thereof.
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 purpose, as for the base annuity. With
respect to public employer division retirants (nonstate division
retirants of the system), such incentive annuity shall be paid
from the nonstate division funds of the system.
(d) The executive secretary of the retirement system shall
provide forms for applicants. Such forms shall include a
detailed description of the incentive plan options.
The executive secretary of the retirement system shall file a 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.
(e) 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. 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 the remaining salary and fringe
benefits as aforesaid: Provided, That this vacant position abolishment provision shall not apply to any county or municipal
position except those under the authority of a county board of
education, nor to any position or positions, whether designated
by spending unit, department, agency, commission, entity or
otherwise, which the governor in respect of the executive branch,
or the chief justice of the supreme court of appeals in respect
of the judicial branch, or the president of the Senate or speaker
of the House of Delegates, in respect of the legislative branch,
may exempt or amend, under such abolishment provision, upon his
respective recommendation that such exemption or amendment is
necessary to provide for continuity of governmental operation or
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.
(f) 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 any combination thereof not exceeding an aggregate of two years.
(g) 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 this
section shall terminate on the thirtieth day of June, one
thousand nine hundred eighty-nine.
(h) The board shall promulgate rules and regulations in
accordance with the provisions of article three, chapter
twenty-nine of this code regarding the calculation of the amount
of incentive option that may be forfeited pursuant to the
provisions of subsection (b) of this section.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.