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Committee backs 60-day separation rule for public retirement annuitants
Summary
The Senate Pensions Committee advanced Senate Bill 7 12, which would add a 60-day bona fide separation requirement to West Virginia retirement systems to preserve qualified tax status under federal law; the committee recommended referral to Finance and reported the bill to the full Senate.
The West Virginia Senate Pensions Committee voted to report Senate Bill 7 12 to the full Senate with a recommendation that it pass; the committee also asked that the bill be referred first to the Committee on Finance.
The bill would add to state law a 60-day separation requirement for retirees receiving an annuity from retirement systems administered by the Consolidated Public Retirement Board (CPRB). "Federal law dictates that retirees, that is members of the retirement system that are actually receiving an annuity, have to actually be separated from employment," counsel Philip Childs told the committee. "Failure to comply with this bona fide separation requirement can jeopardize the entire plan's qualified status and have penalties to the retirement."
The measure would formalize an existing practice that the counsel said already exists in the state's retirement systems but largely is not codified. "This changes that. This bill adds a requirement of a 60 day separation to all the retirement systems administered by the retirement board," Childs said, noting a similar 60-day separation requirement exists in chapter 5 for legislative per diems.
Childs told members there is no fiscal impact identified for the bill. The committee approved the measure by voice vote and recommended the double-reference to Finance be retained so Finance may consider the fiscal implications further.
The bill now goes to the full Senate, with first reference to the Committee on Finance under the committee's motion.
