SB 339 — Relating to WV Retirement Health Benefit Trust Fund within PEIA

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Red = new code to be enacted WEST virginia Legislature regular session IntroducedENROLLED Senate Bill 339 By Senators Gaunch and Blair [Introduced[Passed JanuaryMarch 23,10, 2018;

Referredin effect 90 days from passage] AN ACT to amend and reenact §5-16D-1, §5-16D-3, §5-16D-4, and §5-16D-6 of the CommitteeCode onof Pensions;West Virginia, 1931, as amended, all relating to the West Virginia Retirement Health Benefit Trust Fund within the Public Employees Insurance Agency;

and then to the Committee on Finance] A BILL to amend and reenact §5-16D-1, §5-16D-3, §5-16D-4, and §5-16D-6 of the Code of West Virginia, 1931, as amended, all relating to the West Virginia Retirement Health Benefit Trust Fund within the Public Employees Insurance Agency;

ARTICLE article 16D.

WESTwest VIRGINIAvirginia RETIREMENTretirement HEALTHhealth BENEFITbenefit TRUSTtrust FUND.fund.

(a) “Actuarial accruedcost liability”method” means that portion, as determined by a particularmethod actuarialfor costdetermining method, of the actuarial present value of fundthe obligations and administrative expenses whichof isthe notfund providedand byfor futuredeveloping an actuarially equivalent allocation of the value to time periods, usually in the form of a normal costs.cost and a total other post-employment benefits liability.

(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 actuarial accrued liability a total other post-employment benefits liability.

(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;

(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)(g) “Annual“Board” required contribution” means the amountPublic employersEmployees mustInsurance contributeAgency inFinance aBoard givencreated year to fully fund the trust, as determined by the actuarial valuation in accordance§5-16-4 with requirements of generallythis acceptedcode. accounting principles.

This(h) amount“Collective shallnet representother apost-employment levelbenefits ofliability” fundingmeans thatfor ifany paidactuarial onvaluation, anthe ongoingexcess basisof isthe projectedplan’s tototal coverother thepost-employment normalbenefits costliability eachover yearthe andactuarial amortizevalue anyof unfundedthe actuarialassets liabilities of the planfund overunder aan periodactuarial notcost tomethod exceedused 30by years.the fund for funding purposes.

(i) “Board”“Cost-sharing meansmultiple theemployer Publicplan” Employeesmeans Insurancea Agencysingle Financeplan Boardwith createdpooling in(cost-sharing) §5-16-4arrangements offor thisthe code.participating employers.

“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) “Cost-sharing multiple employer plan” means a single plan with pooling (cost-sharing) arrangements for the participating employers.

(k)(j) “Covered health care expenses” means all actual health care expenses paid by the health plan on behalf of fund beneficiaries.

(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)(l) “Employer“Fund” annual required contribution” means the portionWest ofVirginia theRetiree annualHealth requiredBenefit contributionTrust whichFund isestablished theunder responsibilitythis ofarticle. that particular employer.

(n)(m) “Fund”“Fund beneficiaries” means theall Westpersons Virginiareceiving Retireepost-employment Healthhealth Benefitcare Trustbenefits Fundthrough establishedthe underhealth thisplan. article.

(o)(n) “Fund“Health beneficiaries”plan” means allthe personshealth receivinginsurance post-employmentplan healthor careplans benefitsestablished throughunder the§5-16-1 healthet plan.seq.

(p) “Health plan” means the health insurance plan or plans established under §5-16-1 et seq.

(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.

(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.

(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.

(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.

(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 chapter§29A-1-1 29Aet ofseq. this code, any rules it finds necessary to properly administer the fund.

of this code, any rules it finds necessary to properly administer the fund.

(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.