The West Virginia Senate has passed a measure that would include certain public charter schools under state public retirement system coverage.
Sen. Eric Nelson (R-Kanawah) introduced the bill, SB 449, on Jan. 24. It passed in that chamber on Feb. 9 in a 33-0 vote.
What the Bill Would Do
The bill would expand the definition of “participating public employer” for purposes of government employee retirement plans under state law to include any public charter school which chooses to participate in, and cover its employees under, either the State Teachers Retirement System or the Teachers’ Defined Contribution Retirement System.
Public employer role. For eligible charter school employees, the participating public employer would pick up and pay their contributions, which, although designated by statute as employee contributions, would be treated as employer contributions in determining their tax treatment and would not be included in the employee’s gross income in determining his or her tax treatment until they are distributed or made available to the employee or his or her beneficiary.
It also means that for eligible charter school employees, the participating public employer would pay the employee contributions from the same source of funds used in paying compensation to the employee, by (1) effecting an equal cash reduction in the gross salary of the employee, (2) an off-set against future salary increases, or (3) a combination of the two.
Participating public employers would not have the right to opt out of pick-up or to elect to receive the picked-up and contributed amounts directly instead of having them paid into the retirement system.
Contributions. Employee contributions that would be picked up and paid by the participating public employer, would be treated by the board of trustees in the same manner and to the same extent as employee contributions made before the date on which the participating public employer employee picks up the contributions.
The amount of employee contributions picked up by the participating public employer would be paid to the retirement system (1) in the manner and form, and (2) in the frequency required by the board of trustees and (3) shall be accompanied by supporting data that the board of trustees may prescribe. When paid to the retirement system, each of these amounts would be credited to the deposit fund account of the member for whom the contribution was picked up and paid by the participating public employer.
The bill is now before the state House of Delegates, where it has been referred to that chamber’s Pensions and Retirement Committee and then will be sent to its Finance Committee.
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