H. B. 2607
(By Delegates Staton, Varner
and Pino)
[Introduced March 1, 2001; referred to the
Committee on
Pensions and Retirement.]
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 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.