Senate Bill No. 533
(By Senator Craigo, Unger, Dawson, Love, Ross, Oliverio, Kessler,
Fanning, Helmick, Prezioso, Minard, Bowman, Plymale, Jackson,
Anderson, Ball, Dittmar, Edgell, McKenzie, Sharpe, Hunter, Redd,
McCabe, Sprouse, Minear, Deem, Boley, Snyder, Bailey, Wooton and
Tomblin, Mr. President)
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[Introduced February 17, 2000; referred to the Committee on
Pensions; and then to the Committee on Finance.]
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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 increasing from
two thousand five hundred dollars to five thousand dollars the
amount of money a retiree under early retirement may earn in
any twelve-month period without imposition of a penalty.
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 the employees and in reduction of governmental costs
therefor; that such the program constitutes a public purpose; and
that the special classifications and differentiations provided in
respect of such the program are reasonable and equitable ones for
the accomplishment of such that 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 in this section, retroactive to such beginning
date, aforesaid the first day of April, one thousand nine hundred
eighty-eight. The Legislature further finds that maintaining an
actuarily 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 five thousand 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 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 five thousand
dollars or requires less than sixty days of service in any
twelve-month period; and (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
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 the 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 the 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 or
her regular retirement annuity, equal to ten percent of his or her
final average salary not to exceed five thousand dollars and in the
case of a deferred retirement electing this option, such the lump
sum payment shall be receivable and deferred to the time of receipt
of such the 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 may
postpone actual retirement until the date of fulfilling such the
element of eligibility and shall retire on such that 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 the 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 or she shall not receive an incentive
option under this section during the term of service in said the
office, but shall receive his or her annuity calculated on regular
basis, as if originally taken not under this section but on such a
regular basis. At the end of such the term and cessation of
service in such the office during which the member shall rejoin and
reenter the retirement system and pay contributions therefor, such
the regular annuity shall be recalculated and an increased annuity
due to such the 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 an appointive office
shall not receive an incentive option under this section during the
term of service in said the office, but the same shall be suspended during such the 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 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 or she may be entitled to by virtue of service in
such the office and who does not receive any income therefrom from
the office except such reimbursement of out-of-pocket costs and
expenses as may be permitted by the statutes governing such the
office shall continue to receive an incentive option under this
section. Such The service shall not be counted as contributed or
credited service for purposes of computing retirement benefits.
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 an 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
the 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 the 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 or her 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 the 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 as set forth in this
section.
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 in the special account 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 the 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 the 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 the purpose, as for the
base annuity. With respect to public employer division retirants
(nonstate division retirants of the system), such the 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 The forms shall include a
detailed description of the incentive plan options.
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.
(e) Within every spending unit, department, board,
corporation, commission or any other agency or entity wherein in
which two or multiples of two members elect to retire either under
the temporary early retirement incentives set forth above in this
section, or under regular, voluntary retirement, and countable on
an agency-wide or entity-wide basis, no more than one of such the
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 the 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 the abolishment provision, upon his or her
respective recommendation that such the 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 the recommendation, after the chairmen thereof shall cause such the 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 the member's age plus years of contributing
service equals or exceeds eighty: Provided, That such the 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 terminated 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.
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(NOTE: The purpose of this bill is to raise the amount of
money a retiree under early retirement may earn in any twelve-month
period.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.)