CHAPTER 5. GENERAL POWERS AND AUTHORITY OF THE GOVERNOR, SECRETARY OF STATE AND ATTORNEY GENERAL; BOARD OF PUBLIC WORKS; MISCELLANEOUS AGENCIES, COMMISSIONS, OFFICES, PROGRAMS, ETC.
ARTICLE 10B. GOVERNMENT EMPLOYEES DEFERRED COMPENSATION PLANS.
WVC 5 - 10 B- 1
§5-10B-1. Legislative purpose.
The legislative purpose of this enactment is to enable
employees of the state, its agencies, counties, municipalities and
political subdivisions of such governmental bodies to participate
in voluntary deferred compensation plans authorized by the United
States Internal Revenue Code as interpreted by the Internal Revenue
Service, thereby permitting such employees to obtain the advantages
inherent in such plans relative to the income tax treatment of the
contributions and disbursements made pursuant to such voluntary
income deferment plans. It is further the purpose of this
enactment to authorize the establishment of separate plans for the
state and its agencies and for counties, municipalities and
political subdivisions within the state and to authorize county,
municipal and political subdivision employees to participate in the
state deferred compensation plan if their employer does not have a
WVC 5 - 10 B- 2
Unless the context in which used clearly indicates a different
meaning, as used in this article:
(a) "Board" means the Consolidated Public Retirement Board
provided for in article ten of this chapter.
(b) "Deferred compensation" means the income and earnings on
that income an employee may legally defer for personal income tax
purposes pursuant to the Internal Revenue Code until distribution.
(c) "Deferred compensation plan" or "plan" means a trust
whereby the state employer or a public employer agrees with an
employee for the voluntary reduction in employee compensation for
the payment of benefits by the state employer or the public
employer to the employee at a later date pursuant to this article
and the federal laws and regulations relating to eligible state
deferred compensation plans as described in Section 457 of the
Internal Revenue Code.
(d) "Deferred compensation trust fund" or "trust" means the
fund in which deferred amounts and investment income of
participating employees are held.
(e) "Employee" means any person, whether appointed, elected or
under contract, providing services for the state employer or public
employer for which compensation is paid.
(f) "Internal Revenue Code" means the Internal Revenue Code of
1986, as it has been amended.
(g) "Investment product" means any fixed or variable rate annuity, life insurance contract, savings account, certificate of
deposit, money market account, bond, mutual fund or any other form
of investment not prohibited under the Internal Revenue Code and
authorized by the state employer or the public employer for the
purpose of receiving funds under a plan.
(h) "Public employer" means counties, municipalities or
political subdivisions of those governmental bodies which meet the
definition of "state" as described in Internal Revenue Code Section
457 (d)(1), but which do not meet the definition of "state
employer" as used in this article.
(i) "State employer" means the State of West Virginia, which
includes every state board, commission, agency and instrumentality.
(j) "Treasurer" means the State Treasurer.
(k) "Vendor" means a private entity that sells investment
products or provides goods and services.
WVC 5 - 10 B- 3
§5-10B-3. Powers; contracts; meetings.
(a) Notwithstanding any provision of this code to the
contrary, including, without limitation, this chapter and chapter
five-a of this code, the state employer and a public employer have
the power necessary or appropriate to carry out the provisions and
objectives of this article and to operate the trust, including,
without limitation, entering into contracts and executing and
delivering instruments; engaging consultants, auditors, counsel,
managers, advisors, trustees or any other contractors or
professionals; and charging and collecting administrative fees.
(b) The state employer or any public employer may, by
contract, agree with any of its employees to defer and hold in
trust any portion of that employee's compensation and may
subsequently purchase or acquire from vendors licensed to do
business in the State of West Virginia investment products for the
purpose of carrying out the objectives of the deferred compensation
plan as described in this article.
(c) Employees are authorized to attend meetings called by the
state employer or public employer for the purpose of explaining a
plan during regular working hours.
WVC 5 - 10 B- 3 A
§5-10B-3a. Automatic enrollment.
(a) Every state employee commencing work on and after the
first day of July, two thousand seven, shall have a minimum of ten
dollars per pay period of his or her salary deferred to the state
deferred compensation plan unless the state employee provides
written notice declining to participate in accordance with the
Treasurer's guidelines. A state employee may change the
contribution amount or cease participating at any time. An
employee declining participation in the state deferred compensation
plan may elect to participate at a later time.
(b) A political subdivision may establish an automatic
enrollment program in a deferred compensation plan pursuant to this
article. A political subdivision employee may elect to not
participate in the deferred compensation plan at any time and to
change the contribution amount.
WVC 5 - 10 B- 4
§5-10B-4. Responsibility for implementing plans -- Payroll
reductions -- Billing and administration.
(a) The responsibility for implementing the deferred
compensation plan for employees of the state employer shall be
delegated to the board of trustees through the thirtieth day of
June, two thousand six. On the first day of July, two thousand
six, the Treasurer shall manage any deferred compensation plan for
state employees. Any and all records, moneys, contracts, property
and other matters involving deferred compensation plans for state
employees shall transfer on the first day of July, two thousand
six, to the Treasurer.
(b) The responsibility for implementing the deferred
compensation plan for employees of a public employer is delegated
to the county commission of a county, the governing body of a
municipality, as that term is defined in section two, article one,
chapter eight of this code, and, in the case of any other political
subdivision, the board, commission or other similar body
responsible for determining the policy of such political
subdivision. A county commission or a governing body of another
public employer may request the Treasurer authorize its employees
to participate in the state plan instead of implementing its own
(c) If the governing body has adopted more than one plan, an
employee electing to participate shall also elect the plan or plans
in which he or she desires to participate. When a public employer has not implemented a plan, its employees may participate in the
(d) Payroll reductions shall be remitted as specified by the
state employer or public employer for deposit in the trust, in each
instance, by the appropriate payroll officer. The board of
trustees, the Treasurer or appropriately designated local officer,
board or committee of deferred compensation plan may contract with
one or more vendors to provide consolidated billing and all or any
other goods and services needed for a plan.
(e) Plans shall operate without cost to or contribution from
the state employer or public employer except for the incidental
expense of administering the payroll salary reductions and the
(f) The state employer and the public employers may charge
fees on plan contributions, total assets, total return or other
selected method as necessary to provide for the administrative
expenses of a plan.
WVC 5 - 10 B- 5
§5-10B-5. Investment of funds.
Notwithstanding any other provision of law to the contrary,
the board, or the Treasurer beginning the first day of July, two
thousand six, as well as the appropriate local officer, board or
committee, designated as responsible for implementing a deferred
compensation plan, is hereby authorized to invest compensation held
pursuant to a deferred compensation plan in investment products.
§5-10B-6. Program supplemental.
The deferred compensation plan or plans established pursuant
to this article shall exist and serve in addition to other
retirement, pension or benefit systems established by the state
employer and any public employer. The deferred compensation plan
or plans established by this article shall not supersede, make
inoperative or reduce any benefits provided by the consolidated
retirement system or programs established by the state employer or
any public employer, or any other retirement, pension or benefit
program established by law for the benefit of employees.
§5-10B-7. Other benefits unaffected by deferred compensation
Notwithstanding any other provision of law to the contrary,
any compensation deferred under this article shall be considered
part of an employee's compensation for purposes of any other
employee retirement, pension or benefit program. No deferral of
compensation under any deferred compensation plan shall effect a
reduction of any retirement, pension or other benefit program
provided by law.
§5-10B-8. Federal and state income tax.
Notwithstanding any other provision of this article or any
other provision of law to the contrary, any compensation deferred
under any deferred compensation plan shall not be subject to any
federal, state or municipal income tax nor shall any amount of
compensation deferred be included for the purposes of computation
of any such income tax withheld on behalf of any employee.
WVC 5 - 10 B- 9
§5-10B-9. Liabilities of State of West Virginia or political
The state employer and the public employers shall not incur
any liability for losses suffered or change in value of an
investment product. The financial liability of the state employer
or public employer under any deferred compensation plan shall be
limited in each instance to amounts paid over to the trust but not
WVC 5 - 10 B- 10
§5-10B-10. Deferred compensation plan funds held in trust.
(a) Notwithstanding anything herein to the contrary, as of the
first day of January, one thousand nine hundred ninety-eight, all
assets and income of all deferred compensation plans created or
administered pursuant to this article shall be held in trust for
the exclusive benefit of participants and their beneficiaries.
(b) The West Virginia Deferred Compensation Trust Fund is
created within the accounts held by the Treasurer or with one or
more financial institutions, vendors or any other entities selected
by the Treasurer for the purpose of managing and investing the
trust. A public employer managing a trust shall create a trust
fund and select one or more financial institutions, vendors or
other entities to hold the trust.
(c) The corpus, assets and earnings of the trust do not
constitute public funds of the state or public employer and are
available solely for carrying out the purposes of this article.
Any contract entered into by or any obligation of the state
employer or a public employer in connection with a plan does not
create or constitute a debt, but is solely an obligation of the
WVC 5 - 10 B- 10 A
§5-10B-10a. Matching contribution program.
(a) For a period commencing the first day of July, two
thousand seven, and continuing through the thirtieth day of
September, two thousand twelve, the Treasurer is authorized to
establish and operate a savings incentive program pursuant to
section 401(a) of the Internal Revenue Code of 1986, as amended, in
which a state employee participating in the deferred compensation
plan authorized in this article may receive certain matching
contributions pursuant to this section. The Treasurer shall
establish matching program guidelines in accordance with this
(b) To qualify for participation in the matching program, a
state employee shall have contributed to his or her deferred
compensation account not less than ten dollars every pay period
during a fiscal year.
(c) (1) Subject to the limitations provided by subdivision (2)
of this subsection and subsections (e) and (f) of this section, the
Treasurer shall allocate and credit a matching sum of up to
twenty-five percent of the contributions a qualified state employee
made to his or her deferred compensation account during a fiscal
year for a period of up to five fiscal years, which contributions
shall be at least ten dollars in every pay period during the fiscal
year and which matching contributions for any employee shall not
exceed one hundred dollars in any one fiscal year and four hundred
dollars total over the life of the matching program.
(2) The Treasurer shall set the amount of funds a qualified
state employee may receive as a match in accordance with this
section in an amount not to exceed the amount of funds authorized
by the Legislature for this purpose.
(d) The matching contribution shall be remitted annually by
the Treasurer from the West Virginia Deferred Compensation Matching
Fund, which is hereby created, to the employee's account in the
West Virginia Deferred Compensation Trust Fund no later than the
thirtieth day of September each year for the prior fiscal year.
(e) The Treasurer shall not obligate, authorize or pay any
match for which funds are not available in the West Virginia
Deferred Compensation Matching Fund.
(f) Operation of the matching program is contingent upon
funding made available by the West Virginia Legislature and may be
changed or discontinued at any time for a time certain or
indefinitely, as determined by the Legislature or the Treasurer.
The maximum amount of funds that may be expended from the Deferred
Compensation Matching Fund in any one fiscal year is one million
(g) On or before the first day of June, two thousand eight,
the unclaimed property administrator shall transfer the amount of
one million dollars from the Unclaimed Property Trust Fund to the
Deferred Compensation Matching Fund for operation of the matching
(h) Moneys in the Deferred Compensation Matching Fund may be invested, in whole or in part, with the West Virginia Board of
Treasury Investments or any other entity the Treasurer selects and
all earnings shall accrue to and be retained by the fund.
(i) The State of West Virginia, the Treasurer and his or her
employees, agents and representatives shall not be liable for any
losses incurred by the Deferred Compensation Matching Fund.
(j) Any moneys remaining in the Deferred Compensation Matching
Fund at the termination of the matching program shall be
transferred to the General Revenue Fund of the state no later than
the thirty-first day of December, two thousand twelve.
(k) Any public employer may elect to operate its own matching
WVC 5 - 10 B- 11
§5-10B-11. Deferred Compensation Administrative Account.
The Deferred Compensation Administrative Account is created in
the accounts of the Treasurer for the purposes of implementing,
operating and maintaining the trust and plan. The account shall
receive all fees charged and collected by the Treasurer under this
WVC 5 - 10 B- 12
§5-10B-12. Confidential information exempt from disclosure.
All information contained in the records maintained pursuant
to this article that would tend to disclose the identity of a
participating employee, including, without limitation, social
security number, account number, address, telephone number, e-mail
address, amounts invested, selected investments, returns and
medical or disability information, are confidential and exempt from
disclosure under the provisions of article one, chapter
twenty-nine-b of this code. Employees and persons authorized by
employees are permitted access to their own information.
WVC 5 - 10 B- 12 A
§5-10B-12a. Disclosure of information to the Treasurer for
operation of the plan.
For purposes of this article, any person or entity with
information pertaining to an employee participating in the state
plan shall disclose to the Treasurer any payroll related
information the Treasurer determines he or she needs for the
operation of the state deferred compensation plan. Disclosure of
the information shall begin upon enactment of this section on a
schedule and under arrangements required by the Treasurer.
Information disclosed pursuant to this section shall be used by the
Treasurer only for the operation of the state plan. The Treasurer
shall treat the information obtained as confidential and shall not
disclose the information except to a vendor providing goods or
services for the plan, who shall also treat the information as
confidential, or as required by law.
WVC 5 - 10 B- 13
§5-10B-13. Moneys not subject to legal process.
No account, benefit or right, created pursuant to this
article, accrued or accruing, is subject to execution, garnishment,
attachment, sale to satisfy a judgment or order, the operation of
bankruptcy or insolvency laws, or other process of law and shall be
Note: WV Code updated with legislation passed through the 2012 1st Special Session