WEST VIRGINIA CODE
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.
WVC 5 - 16 D-
ARTICLE 16D. WEST VIRGINIA RETIREMENT HEALTH BENEFIT TRUST FUND.
WVC 5 - 16 D- 1
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) "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. Acceptable
actuarial methods are the aggregate, attained age, entry age,
frozen attained age, frozen entry age and projected unit credit
(c) "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 over a period
of no more than thirty years.
(d) "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
(e) "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) "Actuarial valuation" means the determination, as of a
valuation date, of the normal cost, actuarial accrued liability,
actuarial value of assets and related actuarial present values for
(g) "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) "Board" means the Public Employees Insurance Agency
Finance Board created in section four, article sixteen of this
(j) "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) "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) "Employer" means any employer as defined by section two,
article sixteen of this chapter 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) "Fund" means the West Virginia Retiree Health Benefit
Trust Fund established under this article.
(o) "Fund beneficiaries" means all persons receiving
post-employment health care benefits through the health plan.
(p) "Health plan" means the health insurance plan or plans
established under article sixteen of this chapter.
(q) "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 section five, article
sixteen of this chapter.
(r) "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) "Obligations" means the administrative expenses of the
fund and the cost of covered health care expenses incurred on
behalf of fund beneficiaries.
(t) "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) "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.
(v) "Retiree" means retired employee as defined by section
two, article sixteen of this chapter.
(w) "Retirement system" or "system" means the West Virginia
Consolidated Public Retirement Board created and established by article ten of this chapter and includes any retirement systems or
funds administered or overseen by the Consolidated Public
(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.
WVC 5 - 16 D- 2
§5-16D-2. Creation of West Virginia Retiree Health Benefit Trust
The Legislature declares that certain dedicated revenues
should be preserved in trust for the purpose of funding other
There is hereby created the West Virginia Retiree Health
Benefit Trust Fund for the purpose of providing for and
administering retiree post-employment health care benefits, and the
respective revenues and costs of those benefits as a cost sharing
multiple employer plan.
The fund shall be available without fiscal year limitations
for covered health care expenses and administration costs. All
contributions, appropriations, earnings, and reserves for the
payment of obligations under this article shall be credited to the
fund and are irrevocable.
The amounts remaining in the fund, if any, after covered
health care expenses and administration costs have been paid shall
be retained in the fund as a special reserve for adverse
fluctuation. All assets of the fund shall be used solely for the
payment of fund obligations and for no other purpose.
WVC 5 - 16 D- 3
§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 sufficient to maintain the fund in accordance with the state
plan for other post-employment benefits.
(d) The board may promulgate, in accordance with chapter
twenty-nine-a of this code, any rules it finds necessary to
properly administer the fund. The board may promulgate emergency
rules pursuant to the provisions of section fifteen, article three,
chapter twenty-nine-a 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
(f) The Secretary of the Department of Administration, as
chairman 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
(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
(k) The Public Employees Insurance Agency, on the board's behalf, shall prepare an annual report of fund activities. Such
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
(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.
WVC 5 - 16 D- 4
(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 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
WVC 5 - 16 D- 5
§5-16D-5. Operational control of trust fund.
(a) The Public Employees Insurance Agency shall have
operational control over the fund. The obligations provided in
this article and all related administrative expenses shall be paid
from the fund. The Public Employees Insurance Agency may expend
moneys from the fund for any purpose authorized by this article.
(b) Notwithstanding any provision of this code or any
legislative rule to the contrary, all assets of the fund shall be
held in trust. The Public Employees Insurance Agency, on behalf of
the board, shall have full power to invest and reinvest the fund's
assets via the West Virginia Investment Management Board, subject
to all of the terms, conditions, limitations, and restrictions
imposed by article six, chapter twelve of this code. Subject to
the terms, conditions, limitations and restrictions, and consistent
with this article, the Public Employees Insurance Agency shall have
full power to hold, purchase, sell, assign, transfer, and dispose
of any securities and investments in which any of the moneys are
invested, including the proceeds of any investments and other
moneys belonging to the fund.
(c) Except as otherwise provided in this chapter, no member of
the board or employee of the Public Employees Insurance Agency
shall have any personal interest in the gains or profits from any
investment made by the board or use the assets of the fund in any
manner, except to make such payments as may be authorized by the
board or by the Secretary of the Department of Administration as the chairman of the board in accordance with this article.
WVC 5 - 16 D- 6
§5-16D-6. Mandatory employer contributions.
(a) The board shall annually set the total annual required
contribution sufficient to maintain the fund in an actuarially
sound manner in accordance with generally accepted accounting
(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
(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) 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) 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 amount not
satisfied by the respective employer shall remain the liability of
that employer until fully paid.
WVC 5 - 16 D- 7
§5-16D-7. Select Committee on Other Post-Employment Benefits.
(a) Pursuant to the authority contained in section one,
article one, chapter four of this code, the presiding officers of
each house of the Legislature may appoint a joint committee to be
known at the Select Committee on Other Post-Employment Benefits to
study other post-employment benefits, including the effects of the
amendments to this code relating to other post-employment benefits
made during the 2012 regular session of the Legislature.
(b) The Select Committee on Other Post-Employment Benefits in
consultation with the Director of the Public Employees Insurance
Agency and the Finance Board of the Public Employees Insurance
Agency is also authorized to study and propose to the Joint
Committee on Government and Finance an incentive for those retirees
who were hired on or after July 1, 2010. The committee shall
consider the funding available in the Post-July 1, 2010, Employee
Trust Fund created pursuant to section five-b, article sixteen of
Note: WV Code updated with legislation passed through the 2015 Regular Session
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