SB339 HFIN AM
Chakmakian 3260
The Committee on Finance moves to amend the bill on page one, by striking out everything after the enacting clause and inserting in lieu thereof the following:
“article 16D. west virginia retirement health benefit trust fund.
§5-16D-1. Definitions.
As used in this article, the term:
(a) “Actuarial accrued
liability” means that portion, as determined by a particular actuarial cost
method, of the actuarial present value of fund obligations and administrative
expenses which is not provided by future normal costs
(b) (a) “Actuarial cost method” means a method for
determining the actuarial present value of the obligations and administrative
expenses of the fund and for developing an actuarially equivalent allocation of
the value to time periods, usually in the form of a normal cost and an
actuarial accrued liability a total other post-employment benefits
liability. Acceptable actuarial methods are the aggregate, attained age,
entry age, frozen attained age, frozen entry age and projected unit credit
methods.
(c) (b) “Actuarially sound” means that calculated
contributions to the fund are sufficient to pay the full actuarial cost of the
fund. The full actuarial cost includes both the normal cost of providing for
fund obligations as they accrue in the future and the cost of amortizing the
unfunded actuarial accrued liability total other post-employment
benefits liability over a period of no more than 30 years.
(d) (c) “Actuarial present value of total
projected benefits” means the present value, at the valuation date, of the cost
to finance benefits payable in the future, discounted to reflect the expected
effects of the time value of money and the probability of payment.
(e) (d) “Actuarial assumptions” means assumptions
regarding the occurrence of future events affecting the fund such as mortality,
withdrawal, disability and retirement; changes in compensation and offered
post-employment benefits; rates of investment earnings and other asset
appreciation or depreciation; procedures used to determine the actuarial value
of assets; and other relevant items.
(f) (e) “Actuarial valuation” means the
determination, as of a valuation date, of the normal cost, actuarial accrued
liability total other post-employment benefits liability, actuarial
value of assets and related actuarial present values for the fund.
(g) (f) “Administrative expenses” means all
expenses incurred in the operation of the fund, including all investment
expenses.
(h) “Annual required
contribution” means the amount employers must contribute in a given year to
fully fund the trust, as determined by the actuarial valuation in accordance
with requirements of generally accepted accounting principles. This amount
shall represent a level of funding that if paid on an ongoing basis is
projected to cover the normal cost each year and amortize any unfunded
actuarial liabilities of the plan over a period not to exceed thirty years
(i) (g) “Board” means the Public Employees
Insurance Agency Finance Board created in §5-16-4 of this code.
(h) “Collective net other post-employment benefits liability” means for any actuarial valuation, the excess of the plan’s total other post-employment benefits liability over the actuarial value of the assets of the fund under an actuarial cost method used by the fund for funding purposes.
(j) (i) “Cost-sharing multiple employer plan”
means a single plan with pooling (cost-sharing) arrangements for the
participating employers. All risk, rewards, and costs, including benefit costs,
are shared and not attributed individually to the employers. A single actuarial
valuation covers all plan members and the same contribution rate applies for
each employer.
(k) (j) “Covered health care expenses” means all
actual health care expenses paid by the health plan on behalf of fund
beneficiaries. Actual health care expenses include claims payments to providers
and premiums paid to intermediary entities and health care providers by the
health plan.
(l) (k) “Employer” means any employer as defined
by §5-16-2
of this code which has or will have retired employees in any Public Employees
Insurance Agency health plan.
(m) “Employer annual
required contribution” means the portion of the annual required contribution
which is the responsibility of that particular employer
(n) (l) “Fund” means the West Virginia Retiree
Health Benefit Trust Fund established under this article.
(o) (m) “Fund beneficiaries” means all persons
receiving post-employment health care benefits through the health plan.
(p) (n) “Health plan” means the health insurance
plan or plans established under §5-16-1 et seq. of this code.
(q) (o) “Minimum annual employer payment” means
the annual amount paid by employers which, when combined with the retirees’
contributions on their premiums that year, provide sufficient funds such that
the annual finance plan of the finance board will cover all projected retiree
covered health care expenses and related administrative costs for that year.
The finance board shall develop the minimum annual employer payment as part of
its financial plan each year as addressed in §5-16-5 of this code.
(r) (p) “Normal cost” means that portion of the
actuarial present value of the fund obligations and expenses which is allocated
to a valuation year by the actuarial cost method used for the fund.
(s) (q) “Obligations” means the administrative
expenses of the fund and the cost of covered health care expenses incurred on
behalf of fund beneficiaries.
(t) (r) “Other post-employment benefits” or
“retiree post-employment health care benefits” means those benefits as
addressed by governmental accounting standards board statement no. 43 or any
subsequent governmental standards board statement that may be applicable to the
fund.
(u) (s) “Plan for other post-employment benefits”
means the fiscal funding plan for retiree post-employment health care benefits
as it relates to governmental accounting standards board statement no. 43 or
any subsequent governmental accounting standards board statements that may be
applicable to the fund.
(t) “Proportionate share” means the portion of the collective net other post-employment benefits liability that is attributed to, and the responsibility of, a particular employer.
(v) (u) “Retiree” means retired employee as
defined by §5-16-2 of this code.
(w) (v) “Retirement system” or “system” means the
West Virginia Consolidated Public Retirement Board created and established by §5-10-1 et
seq. of this code and includes any retirement systems or funds administered
or overseen by the Consolidated Public Retirement Board.
(w) “Total other post-employment benefits liability” means that portion, as determined by a particular actuarial cost method, of the actuarial present value of fund obligations and administrative expenses which is not provided by future normal costs.
(x) “Unfunded actuarial
accrued liability” means for any actuarial valuation the excess of the
actuarial accrued liability over the actuarial value of the assets of the fund
under an actuarial cost method used by the fund for funding purposes
§5-16D-3. Operation of trust fund.
(a) Responsibility for the rules and policies for the proper operation of the fund is vested in the board.
(b) The board shall adopt actuarial assumptions as it deems necessary and prudent.
(c) The board shall
determine the annual required contribution rates in an actuarially
sound manner and each employer’s proportionate share sufficient to maintain
the fund in accordance with the state plan for other post-employment benefits.
(d) The board may promulgate, in accordance with §29A-1-1 et seq. of this code, any rules it finds necessary to properly administer the fund. The board may promulgate emergency rules pursuant to the provisions of §29A-3-15 of this code.
(e) The Public Employees Insurance Agency shall furnish reports to the board at each of the board’s regularly scheduled meetings. The reports shall contain the most recent information reasonably available to the Public Employees Insurance Agency reflecting the obligations of the fund, earnings on investments, and such other information as the board deems necessary and appropriate.
(f) The Secretary of the
Department of Administration, as chairman chair of the board,
shall cause to be employed within the Public Employees Insurance Agency such
personnel as may be needed to carry out the provisions of this article. The pro
rata share of the costs to the Public Employees Insurance Agency of operating
the fund shall be part of the administrative costs of the fund and shall be
reimbursed to the Public Employees Insurance Agency.
(g) The Public Employees Insurance Agency, on the board’s behalf, shall be responsible for the day-to-day operation of the fund and may employ or contract for the services of actuaries and other professionals as required to carry out the duties established by this article.
(h) The board shall contract with the West Virginia Investment Management Board for any necessary services with respect to fund investments.
(i) The Public Employees Insurance Agency, on the board’s behalf, shall maintain all necessary records regarding the fund in accordance with generally accepted accounting principles.
(j) The Public Employees Insurance Agency, on the board’s behalf, shall collect all moneys due to the fund and shall pay current post-employment healthcare costs and any administrative expenses necessary and appropriate for the operation of the fund from the fund. The fund’s assets shall be maintained and accounted for in state funds. The state funds shall be: (1) The Other Post-Employment Benefit Contribution Accumulation Fund; (2) the Other Post-Employment Benefit Investment Fund; and (3) the Other Post-Employment Benefit Expense Fund. These funds will be maintained by the Public Employees Insurance Agency on the board’s behalf.
(k) The Public Employees
Insurance Agency, on the board’s behalf, shall prepare an annual report of fund
activities. Such The report shall include, but not be limited to,
independently audited financial statements in accordance with generally
accepted accounting principles. The financial statements must be independently
audited in accordance with auditing standards generally accepted in the United
States and the standards applicable to financial audits contained in government
auditing standards as issued by the Comptroller General of the United States.
(l) Notwithstanding any other provision of law to the contrary, the Public Employees Insurance Agency shall be entitled to request and receive any information that it deems necessary and appropriate from any relevant retirement system in order that the provisions of this article may be carried out.
§5-16D-4. Actuary.
(a) The actuary employed or retained by the Public Employees Insurance Agency shall provide technical advice to the Public Employees Insurance Agency and to the board regarding the operation of the fund.
(b) Using the actuarial
assumptions most recently adopted by the board, the actuary shall, on a
biannual basis, or as frequently as the board or generally accepted
accounting principles deems determines necessary, set actuarial
valuations of normal cost, actuarial liability, actuarial value of assets, and
related actuarial present values for the state plan for other post-employment
benefits.
§5-16D-6. Mandatory employer contributions.
(a) The board shall
annually set the total annual required contribution minimum annual
employer payment sufficient to maintain the fund in an actuarially sound
manner in accordance with generally accepted accounting principles and the
annual finance plan.
(b) The board shall
annually allocate to the respective employers the employer's portion of the
annual required contribution, which allocated amount is the “employer annual
required contribution” proportionate share of the collective net other
post-employment liability as determined by the actuarial valuation in
accordance with generally accepted accounting principles.
(c) The board may apportion the annual required
contribution into various components. These components may include the
amortized unfunded actuarial accrued liability, the total normal cost, the
employer annual required contribution and the lesser included minimum annual employer
payment. In the board's annual apportionment of the annual required
contribution, any amounts of the minimum annual employer payment apportioned to
reduce the amortized unfunded actuarial accrued liability shall not be treated
as premium by the board in the finance plan but, rather, shall be treated as
contributions to prefund other post-employment benefits
(d) (c) Employers shall make annual contributions
to the fund in, at least, the amount of the minimum annual employer payment
rates established by the board.
(e) (d) The Public Employees Insurance Agency
shall bill each employer for the employer annual required contribution and
the included minimum annual employer payment. The Public Employees
Insurance Agency shall annually collect the minimum annual employer payment. The
Public Employees Insurance Agency shall, in addition to the minimum annual
employer payment, collect any amounts the employer elects to pay toward the
employer annual required contribution. Any employer annual required
contribution employer’s proportionate share of the collective net other
post-employment amount not satisfied by the respective employer shall
remain the liability of that employer until fully paid or otherwise
amortized.”