COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 358
(By Senators Jenkins, Plymale, Chafin and McCabe)
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[Originating in the Committee on Pensions;
reported March 4, 2013.]
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A BILL to amend and reenact §8-22-18a, §8-22-19a and §8-22-25 of
the Code of West Virginia, 1931, as amended; to amend said
code by adding thereto a new section, designated §8-22-18c;
and to amend and reenact §8-22A-4 and §8-22A-9 of said code,
all relating to municipal policemen and firemen pensions;
providing additional investigatory and legal powers and duties
of the West Virginia Municipal Pensions Oversight Board;
liability for board acts or omissions concerning investigatory
or legal actions; requiring certain notice of lawsuit to the
West Virginia Municipal Pensions Oversight Board; limiting
certain court orders under certain circumstances; clarifying
refunds to members; clarifying circumstances in which a member
may retire when the member's service has been interrupted by
duty with the armed forces of the United States; extending the cut-off date for the
West Virginia Municipal Police Officers
and Firefighters Retirement System
plan to 2017;and continuing
the municipality's disability retirement purchase requirement
until 2017.
Be it enacted by the Legislature of West Virginia:
That §8-22-18a, §8-22-19a and §8-22-25 of the Code of West
Virginia, 1931, as amended, be amended and reenacted; that said
code be amended by adding thereto a new section, designated
§8-22-18c; and that §8-22A-4 and §8-22A-9 of said code be amended
and reenacted, all to read as follows:
ARTICLE 22. RETIREMENT BENEFITS GENERALLY; POLICEMEN'S PENSION
AND RELIEF FUND; FIREMEN'S PENSION AND RELIEF
FUND; PENSION PLANS FOR EMPLOYEES OF WATERWORKS
SYSTEM, SEWERAGE SYSTEM OR COMBINED WATERWORKS AND
SEWERAGE SYSTEM.
§8-22-18a. West Virginia Municipal Pensions Oversight Board
created; powers and duties; management;
composition; terms; quorum; expenses; reports.
(a) (1) There is established, on the effective date of the
enactment of this section during the fourth extraordinary session
of the Legislature in 2009, The West Virginia Municipal Pensions
Oversight Board, established in 2009, is hereby continued as a
public body corporate for the purpose of monitoring and improving
the performance of municipal policemen's and firemen's pension and relief funds to assure prudent administration, investment and
management of the funds. Management of the oversight board shall
be vested solely in the members of the oversight board. Duties of
the oversight board shall include, but not be limited to, assisting
municipal boards of trustees in performing their duties, assuring
the funds' compliance with applicable laws, providing for actuarial
studies, distributing tax revenues to the funds, initiating or
joining legal actions on behalf of active or retired pension fund
members or municipal boards of trustees to protect interests of the
members in the funds, and taking other actions as may be reasonably
necessary to provide for the security and fiscal integrity of the
pension funds. The oversight board's authority to initiate legal
action does not preempt the authority of municipalities; municipal
policemen's and firemen's boards of trustees; or pension fund
active members, beneficiaries or others to initiate legal action to
protect interests in the funds. Further, the oversight board may,
in its discretion, investigate the actions or practices of
municipal boards of trustees or of their administrators or
employees that, in the oversight board's judgment, have the
potential to threaten the security or fiscal integrity of the
pension funds and the boards of trustees, administrators and
employees shall cooperate with the oversight board in any
investigation. Regardless of whether it has previously conducted
an investigation, the oversight board may initiate or intervene in legal actions to challenge or prevent any action or practice which,
in the oversight board's judgment has the potential to threaten the
security or fiscal integrity of the pension funds.
The oversight
board is created as a public body corporate. Establishment of the
oversight board does not relieve the municipal funds' boards of
trustees from their fiduciary and other duties to the funds, nor
does it create any liability for the funds on the part of the
state. The failure of the oversight board to investigate or
initiate legal actions regarding the actions or practices of
municipal boards of trustees, their administrators or employees
does not render the oversight board liable for the actions or
practices. Members and employees of the oversight board are not
liable personally, either jointly or severally, for debts or
obligations of the municipal pension and relief funds. Except as
otherwise provided herein, members and employees of the oversight
board have a fiduciary duty toward the municipal pension and relief
funds and are liable for malfeasance or gross negligence.
Employees of the oversight board are nonclassified
classified-exempt state employees.
(2) The oversight board shall consist of nine members. The
executive director of the state's Investment Management Board and
the executive director of the state's Consolidated Public
Retirement Board, or their designees, shall serve as voting ex
officio members. The other seven members shall be citizens of the state who have been qualified electors of the state for a period of
at least one year next preceding their appointment and shall be as
follows: An active or retired member of a Municipal Policemen's
Pension and Relief Fund chosen from a list of three persons
submitted to the Governor by the state's largest professional
municipal police officers organization, an active or retired member
of a Municipal Firemen's Pension and Relief Fund chosen from a list
of three persons submitted to the Governor by the state's largest
professional firefighters organization, an attorney experienced in
finance and investment matters related to pensions management, two
persons experienced in pension funds management, one person who is
a certified public accountant experienced in auditing and one
person chosen from a list of three persons submitted to the
Governor by the state's largest association of municipalities.
(3) On the effective date of the enactment of this section as
amended during the fourth extraordinary session of the Legislature
in 2009, the Governor shall forthwith appoint the members, with the
advice and consent of the Senate. The Governor may remove any
member from the oversight board for neglect of duty, incompetency
or official misconduct.
(b) The oversight board has the power to:
(1) Enter into contracts, to sue and be sued, to implead and
be impleaded;
(2) Promulgate and enforce bylaws and rules for the management and conduct of its affairs;
(3) Maintain accounts and invest those funds which the
oversight board is charged with receiving and distributing;
(4) Make, amend and repeal bylaws, rules and procedures
consistent with the provisions of this article and chapter
thirty-three of this code;
(5) Notwithstanding any other provision of law, retain or
employ, fix compensation, prescribe duties and pay expenses of
legal, accounting, financial, investment, management and other
staff, advisors or consultants as it considers necessary, including
the hiring of legal counsel and actuary; and
(6) Do all things necessary and appropriate to implement and
operate the board in performance of its duties. Expenses shall be
paid from the moneys in the Municipal Pensions Security Fund
created in section eighteen-b of this article or, prior to the
transition provided in section eighteen-b of this article, the
Municipal Pensions and Protection Fund: Provided, That the board
may request special appropriation for special projects. The
oversight board is exempt from provisions of article three, chapter
five-a of this code for the purpose of contracting for actuarial
services, including the services of a reviewing actuary.
(c) Except for ex officio members, the terms of oversight
board members shall be staggered initially from January 1, 2010.
The Governor shall appoint initially one member for a term of one year, one member for a term of two years, two members for terms of
three years, one member for a term of four years and two members
for terms of five years. Subsequent appointments shall be for
terms of five years. A member serving two full consecutive terms
may not be reappointed for one year after completion of his or her
second full-term. Each member shall serve until that member's
successor is appointed and qualified. Any member may be removed by
the Governor in case of incompetency, neglect of duty, gross
immorality or malfeasance in office. Any vacancy on the oversight
board shall be filled by appointment by the Governor for the
balance of the unexpired term.
(d) A majority of the full authorized membership of the
oversight board constitutes a quorum. The board shall meet at
least quarterly each year, but more often as duties require, at
times and places that it determines. The oversight board shall
elect a chairperson and a vice chairperson from their membership
who shall serve for terms of two years and shall select annually a
secretary/treasurer who may be either a member or employee of the
board. The oversight board shall employ an executive director and
other staff as needed and shall fix their duties and compensation.
The compensation of the executive director shall be subject to
approval of the Governor. Except for any special appropriation as
provided in subsection (b) of this section, all personnel and other
expenses of the board shall be paid from revenue collected and allocated for municipal policemen's or municipal firemen's pension
and relief funds pursuant to section fourteen-d, article three,
chapter thirty-three of this code and distributed through the
Municipal Pensions and Protection Fund or the Municipal Pensions
Security Fund created in section eighteen-b of this article.
Expenses during the initial year of the board's operation shall be
from proceeds of the allocation for the municipal pensions and
relief funds. Expenditures in years thereafter shall be by
appropriation from the Municipal Pensions Security Fund. Money
allocated for municipal policemen's and firemen's pension and
relief funds to be distributed from the Municipal Pensions and
Protection Fund or the Municipal Pensions Security Fund shall be
first allocated to pay expenses of the oversight board and the
remainder in the fund distributed among the various municipal
pension and relief funds as provided in section fourteen-d, article
three, chapter thirty-three of this code. The board is exempt from
the provisions of sections seven and eleven, article three, chapter
twelve of this code relating to compensation and expenses of
members, including travel expenses.
(e) Members of the oversight board shall serve the board
without compensation for their services: Provided, That no public
employee member may suffer any loss of salary or wages on account
of his or her service on the board. Each member of the board shall
be reimbursed, on approval of the board, for any necessary expenses actually incurred by the member in carrying out his or her duties.
All reimbursement of expenses shall be paid out of the Municipal
Pensions Security Fund.
(f) The board may contract with other state boards or state
agencies to share offices, personnel and other administrative
functions as authorized under this article: Provided, That no
provision of this subsection may be construed to authorize the
board to contract with other state boards or state agencies to
otherwise perform the duties or exercise the responsibilities
imposed on the board by this code.
(g) The board shall propose rules for legislative approval in
accordance with the provisions of article three, chapter
twenty-nine-a of this code as necessary to implement the provisions
of this article, and may initially promulgate emergency rules
pursuant to the provisions of section fifteen, article three,
chapter twenty-nine-a of this code.
(h) The oversight board shall report annually to the
Legislature's Joint Committee on Government and Finance and the
Joint Committee on Pensions and Retirement concerning the status of
municipal policemen's and firemen's pension and relief funds and
shall present recommendations for strengthening and protecting the
funds and the benefit interests of the funds' members.
(i) The oversight board shall cooperate with the West Virginia
Investment Management Board and the Board of Treasury Investments to educate members of the local pension boards of trustees on the
services offered by the two state investment boards. No later than
October 31, 2013, the board shall report to the Joint Committee on
Government and Finance and the Joint Committee on Pensions and
Retirement a detailed comparison of returns on long-term
investments of moneys held by or allocated to municipal pension and
relief funds managed by the West Virginia Investment Management
Board and those managed by others than the Investment Management
Board. The oversight board shall also report at that time on
short-term investment returns by local pension boards using the
West Virginia Board of Treasury Investments compared to short-term
investment returns by those local boards of trustees not using the
Board of Treasury Investments.
(j) The oversight board shall establish minimum requirements
for training to be completed by each member of the board of
trustees of a Municipal Policemen's or Firemen's Pension and Relief
Fund. The requirements should include, but not be limited to,
training in ethics, fiduciary duty and investment responsibilities.
§8-22-18c. Notice of legal actions by or against municipal
policemen's and firemen's pension funds.
In any legal action in which a municipal policemen's or
firemen's pension and relief fund, or the fund's board of trustees,
employee or administrator, is named as a party, the plaintiff or
petitioner shall serve a copy of the complaint or petition upon the oversight board by certified mail, return receipt requested, within
seven days of filing the legal action. Until proof of service is
filed with the clerk of the court in which the action was filed,
and for sixty days after the filing of the proof of service, no
order may be entered by the court that directly or indirectly
requires the expenditure or other disposition of pension funds or
that determines the eligibility or entitlement of any member to any
pension benefit payable from the pension and relief fund: Provided,
That the court may enter such temporary or interim orders as may be
needed to preserve and protect the assets of the fund. In any legal
action involving a municipal policemen's or firemen's pension and
relief fund the oversight board is entitled to intervene for the
purpose of preserving the security or fiscal integrity of the
pension fund.
§8-22-19a. Refunds of member contributions.
After January 1, 2010, any member of a paid police department
or fire department who is removed or discharged or who before
retirement on any retirement pension or disability pension severs
his or her connection with said department, whether or not
consecutive, shall, upon request, be refunded all pension and
relief fund deductions made from his the member's salary or
compensation, but without interest from the fund. The refund shall
come from the accounts which originally received the member
deductions. For municipalities using the conservation method of funding, the member contributions are to be refunded from both the
Municipal Pension and Relief Fund and the city benefit account, in
the exact percentages that were initially deposited to the
respective accounts. Any member who receives such a refund and
such member subsequently wishes to reenter the his or her
department, such police officer or fire fighter shall not be
allowed to reenter the department unless such the police officer or
fire fighter repays to the pension and relief fund all sums
refunded to him or her in a lump sum at the date of reentry, or by
monthly payroll deductions within thirty-six months from the date
he or she reenters the department, with interest at the rate of
eight percent per annum. In the event such refund is made prior to
January 1, 1981, and such member subsequently reenters the
department such police officer or firefighter shall be allowed
membership in such pension and relief fund; however, no credit may
be allowed such member for any former service, unless such member
repays to the pension and relief fund all sums refunded to him the
member within one year from the date he the member reenters the
department with interest at the rate of eight percent per annum:
Provided, That any member who, on or before June 3, 1955, reentered
the paid police or fire department shall be allowed credit for any
former service in the same department reentered if he, within one
year from said June 3, 1955, repaid all sums withdrawn or refunded
to him with interest at the rate of six percent per annum, but for such member who receives such refund prior to January 1, 1980,
interest may not be charged for more than three years. Any
probationary member of a paid police or fire department who is not
given an absolute appointment at the end of his the member's
probationary period shall, upon request, be refunded all pension
and relief fund deductions made from his the member's salary or
compensation, but without interest. Any member contribution made
in fiscal years beginning on July 1, 1981 and thereafter by any
members of such fund, which is in excess of the percentages,
required in section nineteen of this article of such member's
salary or compensation as defined in section sixteen of this
article shall be refunded with eight percent interest to such
member upon completion of the calculation of his the member's
retirement benefit.
§8-22-25. Retirement pensions.
(a) Any member of a paid police or fire department who is
entitled to a retirement pension hereunder, and who has been in the
honorable service of such department for twenty years, may, upon
written application to the board of trustees, be retired from all
service in such department without medical examination or
disability. On such retirement the board of trustees shall
authorize the payment of annual retirement pension benefits
commencing upon his the member's retirement or upon his the
member's attaining the age of fifty years, whichever is later, payable in twelve monthly installments for each year of the
remainder of his the member's life, in an amount equal to sixty
percent of such member's average annual salary or compensation
received during the three twelve-consecutive-month periods of
employment with such department in which such member received his
the member's highest salary or compensation while a member of the
department, or an amount of $500 per month, whichever is greater.
(b) Any member of any such department who is entitled to a
retirement pension under the provisions of subsection (a) of this
section and who has been in the honorable service of such
department for more than twenty years at the time of his the
member's retirement shall receive, in addition to the sixty percent
authorized in said subsection (a):
(1) Two additional percent, to be added to the sixty percent
for each of the first five additional years of service completed at
the time of retirement in excess of twenty years of service up to
a maximum of seventy percent; and
(2) One additional percent, to be added to such maximum of
seventy percent, for each of the first five additional years of
service completed at the time of retirement in excess of
twenty-five years of service up to a maximum of seventy-five
percent.
The total additional credit provided for in this subsection
may not exceed fifteen additional percent.
(c) Any member of any such department whose service has been
interrupted by duty with the Armed Forces of the United States as
provided in section twenty-seven of this article prior to July 1,
1981, shall be eligible for retirement pension benefits immediately
upon retirement, regardless of his the member's age, if he the
member shall otherwise be eligible for such retirement pension
benefits. In no event are provisions of this subsection to be
interpreted to permit retirement before age fifty unless the
interruption of the member's service by duty with the Armed Forces
of the United States actually occurred before July 1, 1981. The
amendment made to this subsection during the 2013 Regular Session
of the Legislature is not for the purpose of changing the existing
law regarding benefits provided to veterans for military service
prior to July 1, 1981, but to further clarify that the provisions
of this section and any previous enactments of this section do not
make a member eligible for retirement before age fifty for a
member's service with the Armed Forces of the United States after
to July 1, 1981.
Any member or previously retired member of any such department
who has served in active duty with the Armed Forces of the United
States as described in section twenty-seven of this article,
whether prior to or subsequent to becoming a member of a paid
police or fire department covered by the provisions of this
article, shall receive, in addition to the sixty percent authorized in subsection (a) of this section and the additional percent credit
authorized in subsection (b) of this section, one additional
percent for each year so served in active military duty, up to a
maximum of four additional percent. In no event, however, may the
total benefit granted to any member exceed seventy-five percent of
the member's annual average salary calculated in accordance with
subsection (a) of this section.
(d) Any member of a paid police for fire department shall be
retired at the age of sixty-five years in the manner provided in
this subsection. When a member of the paid police or fire
department reaches the age of sixty-five years, the said board of
trustees shall notify the mayor of this fact, within thirty days of
such member's sixty-fifth birthday. The mayor shall cause such
sixty-five-year-old member of the paid police or fire department to
retire within a period of not more than thirty additional days.
Upon retirement under the provisions of this subsection, such
member shall receive retirement pension benefits payable in twelve
monthly installments for each year of the remainder of his the
member's life in an amount equal to sixty percent of such member's
average annual salary or compensation received during the three
twelve-consecutive-month periods of employment with such department
in which such member received his the member's highest salary or
compensation while a member of the department, or an amount of $500
per month, whichever is greater. If such member has been employed in said department for more than twenty years, the provisions of
subsection (b) of this section shall apply.
(e) It shall be the duty of each member of a paid police or
fire department at the time a fund is hereafter established to
furnish the necessary proof of his the member's date of birth to
the said board of trustees, as specified in section twenty-three of
this article, within a reasonable length of time, said length of
time to be determined by the said board of trustees. Then the
board of trustees and the mayor shall proceed to act in the manner
provided in subsection (d) of this section and shall cause all
members of the paid police or fire department who are over the age
of sixty-five years to retire in not less than sixty days from the
date the fund is established. Upon retirement under the provisions
of this subsection (e), such member, whether he the member has been
employed in said department for twenty years or not, shall receive
retirement pension benefits payable in twelve monthly installments
for each year of the remainder of his the member's life in an
amount equal to sixty percent of such member's average annual
salary or compensation received during the three
twelve-consecutive-month periods of employment with such department
in which such member received his the member's highest salary or
compensation while a member of the department, or an amount of $500
per month, whichever is greater. If such member has been employed
in said department for more than twenty years, the provisions of subsection (b) of this section shall apply.
ARTICLE 22A. WEST VIRGINIA MUNICIPAL POLICE OFFICERS AND
FIREFIGHTERS RETIREMENT SYSTEM.
§8-22A-4. Creation and administration of West Virginia Municipal
Police Officers and Firefighters Retirement System;
specification of actuarial assumptions.
There is hereby created the West Virginia Municipal Police
Officers and Firefighters Retirement System. The purpose of this
system is to provide for the orderly retirement of certain police
officers and firefighters who become superannuated because of age
or permanent disability and to provide certain survivor death
benefits. Substantially all of the members of the retirement
system shall be qualified public safety employees as defined in
section two of this article. The retirement system shall come into
effect January 1, 2010: Provided, That if the number of members in
the system are fewer than one hundred on January 1, 2014 2017, then
all of the provisions of this article are void and of no force and
effect, and memberships in the system will be merged into the
Emergency Medical Services Retirement System created in article
five-v, chapter sixteen of this code. If merger is required, the
board shall take all necessary steps to see that the voluntary
transfers of persons and assets authorized by this article do not
affect the qualified status with the Internal Revenue Service of
either retirement plan. All business of the system shall be transacted in the name of the West Virginia Municipal Police
Officers and Firefighters Retirement System. The board shall
specify and adopt all actuarial assumptions for the plan at its
first meeting of every calendar year or as soon thereafter as may
be practicable, which assumptions shall become part of the plan.
§8-22A-9. Retirement; commencement of benefits; insurance
requirements during early period.
(a) To ensure the fiscal integrity of the retirement system
during the start-up phase, no member is entitled to retirement,
disability or death benefits under this retirement system until
January 1, 2013 2017. Participating municipalities shall purchase
insurance for their new plan members to provide coverage in an
amount equal to disability coverage otherwise provided in sections
seventeen and eighteen of this article and death benefits otherwise
provided in sections twenty, twenty-two and twenty-three of this
article for claims arising before January 1, 2013: Provided, That
pursuant to the amendments made to this subsection during the two
thousand thirteen regular session of the Legislature, participating
municipalities shall reinstate or purchase the insurance coverage
for all plan members no later than July 1, 2013 and continue
coverage through January 1, 2017.
(b) A member may retire and commence to receive retirement
income payments on the first day of the calendar month following
written application for his or her voluntary petition for retirement coincident with or next following the later of the date
the member ceases employment, or the date the member attains early
or normal retirement age, in an amount as provided under this
article: Provided, That retirement income payments under this plan
are subject to the provisions of this article. On receipt of the
petition, the board shall promptly provide the member with an
explanation of his or her optional forms of retirement benefits and
on receipt of properly executed forms from the member, the board
shall process a member's request for and commence payments as soon
as administratively feasible.
NOTE: This purpose of this bill is to grant additional
investigatory and legal powers and duties of the West Virginia
Municipal Pensions Oversight Board and expressly creates no
liability for board acts or omissions under these new powers and
duties. The bill requires certain notices of lawsuits to the West
Virginia Municipal Pensions Oversight Board. The bill limits
certain court orders under certain circumstances. The bill
clarifies that a member may retire when the member's service has
been interrupted by duty with the Armed Forces of the United
States. The bill extends the cut-off date for the
West Virginia
Municipal Police Officers and Firefighters Retirement System
plan
from 2014 to 2017 and requires the municipalities to continue
disability insurance coverage through January 1, 2017.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§8-22-18c is new; therefore, strike-throughs and underscoring
have been omitted.