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2010 Session

Budget Amendments - HB29 (Floor Approved)

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Transitional Retirement Benefit for Local Employees (language only)

Item 472.10 #1h

Item 472.10 #1h

Central Appropriations
Central Appropriations

Language
Page 262, strike lines 27 through 54, and insert:
"F. The purpose of this paragraph is to provide a transitional retirement benefit, under the conditions specified, to eligible city, county, school division or other political subdivision employees who are involuntarily separated from employment with their employer.

1.a. "Involuntary separation" includes, but is not limited to, terminations and layoffs from employment with the employer, or being placed on leave without pay-layoff or equivalent status, due to budget reductions, employer reorganizations, workforce downsizings, or other causes not related to the job performance or misconduct of the employee, but shall not include voluntary resignations. As used in this paragraph, a "terminated employee" shall mean an employee who is involuntarily separated from employment with his employer.
b. The governing authority of a city, county, school division or other political subdivision electing to cover its employees under the provisions of this paragraph shall adopt a resolution, as prescribed by the Board of Trustees of the Virginia Retirement System, to that effect. An election by a school division shall be evidenced by a resolution approved by the Board of such school division and its local governing authority.
2.a. For purposes of this paragraph “eligible employee” shall mean any (i) “eligible employee” as defined in § 51.1-132, Code of Virginia, (ii) “teacher” as defined in § 51.1-124.3, Code of Virginia, and (iii) any “local officer” as defined in § 51.1.124.3, Code of Virginia, except for the treasurer, commissioner of the revenue, attorney for the Commonwealth, clerk of a circuit court, or sheriff of any county or city, and (a) for whom reemployment with his employer is not possible because there is no available position for which the employee is qualified or the position offered to the employee requires relocation or a reduction in salary and (b) whose involuntary separation was due to causes other than job performance or misconduct, (c) who is a vested member of the Virginia Retirement System, including a member eligible for the benefits described in subsection B of § 51.1-138, Code of Virginia, and at least 50 years of age, and (d) whose actual age and creditable service when combined with the added benefits provided by subparagraph 4 below qualify such member for retirement benefits under Chapter 1 of § 51.1, Code of Virginia,  shall be eligible, under the conditions specified, for the transitional retirement benefit conferred by this paragraph. The date of involuntary separation shall mean the date an employee was terminated from employment or placed on leave without pay-layoff or equivalent status.  
b. Eligibility shall commence on the date of involuntary separation.
3.a. On his date of involuntary separation, an eligible employee with (i) two years' service or less to the employer shall be entitled to receive a transitional retirement benefit equivalent to four weeks of salary; (ii) three years through and including nine years of consecutive service to the employer shall be entitled to receive a transitional retirement benefit equivalent to four weeks of salary plus one additional week of salary for every year of service over two years; (iii) 10 years through and including 14 years of consecutive service to the employer shall be entitled to receive a transitional retirement benefit equivalent to 12 weeks of salary plus two additional weeks of salary for every year of service over nine years; or (iv) 15 years or more of consecutive service to the employer shall be entitled to receive a transitional retirement benefit equivalent to two weeks of salary for every year of service, not to exceed 36 weeks of salary.
b. Transitional retirement benefits shall be computed by the terminating employer’s payroll department. Partial years of service shall be rounded up to the next highest year of service.
c. The amount of the transitional retirement  benefit shall be increased by the equivalent cost of 12 months’ coverage under the (i) health insurance plan administered by the employer for its employees, if he participated in such plan prior to his date of involuntary separation, and (ii) group life insurance plan administered by the Virginia Retirement System pursuant to Chapter 5 (§ 51.1-500 et seq.), Title 51.1, Code of Virginia, or such other group life insurance plan as may be administered by the employer.
4.a.  The employer shall purchase on each eligible employee’s behalf years to be credited to either his age or creditable service or a combination of age and creditable service, except that any years of credit purchased on behalf of a member of the Virginia Retirement System, including a member eligible for the benefits described in subsection B of § 51.1-138, Code of Virginia, who is eligible for unreduced retirement shall be added to his creditable service and not his age. The cost of each year of age or creditable service purchased by the employer shall be equal to 15 percent of the employee's present annual compensation. The number of years of age or creditable service to be purchased by the employer shall be equal to the quotient obtained by dividing (i) the present value of the transitional retirement benefit as determined under subparagraphs 3.a. and 3.c. by (ii) the cost of each year of age or creditable service. Partial years shall be rounded up to the next highest year. Deferred retirement under the provisions of subsections C of §§ 51.1-153 and 51.1-205, Code of Virginia, and disability retirement under the provisions of § 51.1-156 et seq., Code of Virginia, shall not be available under this paragraph.
b. In lieu of the transitional retirement benefit provided in this subsection, any employee who is otherwise eligible may take immediate retirement pursuant to §§ 51.1-155.1 or 51.1-155.2, Code of Virginia.
c. The retirement allowance for any employee electing to retire under this paragraph who, by adding years to his age, is between ages 55 and 65, shall be reduced on the actuarial basis provided in subdivision A. 2. of § 51.1-155, Code of Virginia.
d. The retirement program provided in this subparagraph shall be otherwise governed by policies and procedures developed by the Virginia Retirement System.
e. Costs associated with the provisions of this subparagraph shall be factored into the employer contribution rates paid to the Virginia Retirement System beginning with the June 30, 2011 actuarial evaluation."
Page 263, strike line 1 through 56.
Page 264, strike line 1 through 6.


Explanation
(This amendment replaces language included in the introduced budget authorizing the provision of WTA benefits to employees of local school divisions and local governments who are subject to layoffs with language giving school boards and localities the option of offering transitional retirement benefit.)