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2004 SESSION

043909788
SENATE BILL NO. 157
Offered January 14, 2004
Prefiled January 12, 2004
A BILL to amend the Code of Virginia by adding a section numbered 51.1-142.4, relating to Virginia Retirement System; purchase of prior service credit.
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Patron-- Potts
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Referred to Committee on Finance
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Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding a section numbered 51.1-142.4 as follows:

§ 51.1-142.4. Purchase of additional prior service credit by certain local government chief executive officers.

A. Definitions.

For the purposes of this section:

As the context may require, "local government chief executive officer" shall be construed to mean (i) a county administrator appointed by a board of county supervisors pursuant to subsection A of § 15.2-406, (ii) a county executive appointed by a board of county supervisors pursuant to § 15.2-509, (iii) a county manager appointed by a board of county supervisors pursuant to § 15.2-609, (iv) a county manager appointed by a county board pursuant to § 15.2-706, (v) an urban county executive appointed by a board of county supervisors pursuant to § 15.2-804, or (vi) any other chief executive officer of a local government who is appointed by a governing body.

"Governing body" means the board of supervisors of a county, council of a city, or council of a town, as the context may require.

"Local government" shall be construed to mean a county, city or town as the context may require.

B. In addition to the four years of prior service credit that may be purchased under clause (ii) of subdivision B 1 of § 51.1-142.2, a local government chief executive officer with at least five years of creditable service in the Retirement System may purchase up to a maximum of 10 additional years of prior service credit for creditable service of another state or of a political subdivision, or public school system of this or another state, as certified by such state, political subdivision, or public school system. Except as otherwise required by Chapter 1223 of Title 10 of the United States Code, the service credit made available under this section may not be purchased if, before being purchased or at the time of such purchase pursuant to this section, the service to be purchased is service that is included in the calculation of any retirement allowance received or to be received by the member from this or any other retirement system.

The governing body that has appointed such local government chief executive officer may purchase such prior service credit on behalf of the local government chief executive officer.

C. The cost at the time of purchase for each additional year of service credit or, portion thereof, pursuant to this section, shall be 10 percent of the local government chief executive officer's creditable compensation or 10 percent of the local government chief executive officer's average final compensation, whichever is greater, provided that the service credit to be purchased is paid for in one lump-sum payment within one year after the local government chief executive officer first became eligible to purchase such service credit or by July 1, 2005, whichever is later.

A local government chief executive officer shall first become eligible to purchase prior service credit under this section as follows:

1. For members in service on June 30, 2004, and July 1, 2004, upon attaining five years of creditable service as a local government chief executive officer in the Retirement System;

2. For members in service on June 30, 2004, and July 1, 2004, who become a local government chief executive officer on or after July 1, 2004, upon attaining five years of creditable service as a local government chief executive officer in the Retirement System; and

3. For members not in service on June 30, 2004, upon the member earning five years of creditable service as local government chief executive officer in the Retirement System for service performed after June 30, 2004.

D. In any case in which prior service credit pursuant to this section has been purchased by or on behalf of a local government chief executive officer, if the local government chief executive officer, subsequent to the date of such purchase, does not remain in such position with the local government for at least the number of years purchased: (i) the Retirement System shall reduce the creditable service credited to the local government chief executive officer by an amount equivalent to the number of years of prior service purchased less the number of years served by the person as a local government chief executive officer with the local government subsequent to the date of such purchase. Such reduction in creditable service shall be deemed to be forfeited by the local government chief executive officer for purposes of this chapter and the contributions representing that forfeited service shall be refunded to the local government chief executive officer; and (ii) the local government chief executive officer shall be liable to the governing body for the amount paid by the governing body for purchasing the forfeited prior service credit.

E. If a local government chief executive officer does not purchase the prior service credit described in subsection B within the timeframe provided in subsection C, such prior service credit may be purchased at the actuarial equivalent cost, provided that in no case shall any person purchase more than 10 years of such prior service credit under this section.