WEST VIRGINIA CODE











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WVC 5-

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

§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) "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

methods.

(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

payment.

(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

the fund.

(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

chapter.

(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

Retirement Board.

(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

Fund.

The Legislature declares that certain dedicated revenues

should be preserved in trust for the purpose of funding other

post-employment benefits.

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

appropriate.

(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

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

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.







WVC 5 - 16 D- 4

§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 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.







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

principles.

(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".

(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

this chapter.





Note: WV Code updated with legislation passed through the 2015 Regular Session

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