West Virginia Code of State Rules Agency 211 - Municipal Pensions Oversight Board
1. Overview of the Municipal Pensions Oversight Board (MPOB)
The Municipal Pensions Oversight Board (MPOB) is established under West Virginia Code §8-22-1 et seq. and is part of Agency 211 in the West Virginia Code of State Rules. The MPOB was created to oversee and regulate the operations of municipal pension and retirement systems across the state of West Virginia.
Main Functions:
Monitoring Municipal Pension Systems: The MPOB ensures compliance with state pension laws and regulations.
Funding and Financial Reporting: The board oversees the actuarial soundness of pension funds.
Reviewing Annual Reports: Municipalities are required to submit pension fund reports to the MPOB.
Setting Standards for Municipal Pension Plans: It provides guidelines for municipalities in terms of fund investments, actuarial assumptions, and retirement benefit policies.
Disbursement Oversight: Ensures that funds are disbursed appropriately to eligible pensioners.
2. Board Structure and Authority (Agency 211 § 1.1 - § 1.6)
Board Composition
The MPOB consists of seven members:
Three appointed by the Governor: These members may include financial experts or individuals with knowledge of pension funds.
Two elected by municipalities: Typically, these members represent the municipalities in ensuring that local needs are taken into account.
Two members from municipal employee organizations: These are typically union representatives who ensure that the employees' interests are protected.
Board's Authority
The MPOB has the authority to establish regulations governing:
Minimum funding requirements for municipal pension plans.
Actuarial review procedures and the certification of plan solvency.
Disciplinary measures against non-complying municipalities, including financial penalties.
3. Requirements for Municipal Pension Plans (Agency 211 § 2.1 - § 2.9)
Pension Plan Design and Funding
Municipal pension plans must adhere to specific actuarial standards that ensure long-term sustainability.
Each municipality must submit an annual actuarial valuation to the MPOB, outlining the funding status of its pension plan and the recommended funding contribution.
Annual Reports and Audits
Municipalities are required to submit audited financial statements and an actuarial report by June 30th of each year. The MPOB reviews these reports to ensure that the pension funds are meeting required funding levels.
Failure to comply can result in penalties or the requirement to submit a corrective action plan.
Funding Requirements
The actuarial soundness of each municipal pension system is determined by the MPOB using standards set by the Governmental Accounting Standards Board (GASB) and state law. This ensures that municipalities meet the required actuarial funding ratio.
4. Actuarial Valuations and Funding Policies (Agency 211 § 3.1 - § 3.7)
Actuarial Reviews
Every two years, an independent actuary must perform an actuarial valuation of the pension fund. This valuation assesses:
The funding status (how much money is available vs. how much will be needed).
The funding policy, including recommended contributions from the municipality to ensure the plan remains solvent.
Funding Targets
Municipalities are encouraged to maintain a funding ratio of at least 80%. This means that for every dollar in pension obligations, 80 cents should be available in the pension fund.
Municipalities that fall below this target may face additional scrutiny or be required to take corrective action to increase contributions.
5. Administrative and Reporting Requirements (Agency 211 § 4.1 - § 4.9)
Municipal Pension Reporting
Municipalities must submit comprehensive pension plan reports, which should include the following:
Contributions by Municipality and Employees: This includes the total contributions made into the pension system from both the municipal government and employees.
Investment Performance: Details on how pension funds have been invested and the returns generated by those investments.
Liabilities and Benefit Payments: Information on the expected future pension obligations and benefit payouts.
MPOB Review Process
After receiving the annual reports, the MPOB evaluates:
Compliance with state pension laws.
Whether the funding ratio is adequate.
Potential risks that may impact the sustainability of the pension funds.
6. Corrective Action for Non-Compliance (Agency 211 § 5.1 - § 5.8)
Failure to Meet Funding Requirements
If a municipal pension plan does not meet the required funding standards or fails to submit required reports on time, the MPOB may take corrective action, including:
Requiring a corrective action plan from the municipality.
Fines or penalties for non-compliance.
Temporary suspension of benefits to members if the fund becomes significantly underfunded.
Corrective Action Plans
If a municipality is found to be significantly underfunded, it may be required to submit a plan outlining:
Steps to improve the funding ratio.
Increased contribution schedules from both the municipality and employees.
Revised investment strategies to improve returns.
7. Disciplinary Actions (Agency 211 § 6.1 - § 6.6)
The MPOB has the authority to impose disciplinary actions on municipalities or pension administrators who fail to comply with regulations. These actions can include:
Fines: If a municipality fails to submit required reports or does not meet actuarial funding requirements.
Suspension of Benefits: In extreme cases, if pension funds are not properly managed or become insolvent, the Board may temporarily halt pension disbursements.
Revocation of Plan Approval: If a municipality repeatedly fails to meet legal requirements, the MPOB may revoke its pension plan approval.
8. Case Law and Legal Precedents
Case Law Example 1:
City of Charleston v. Municipal Pension Oversight Board, 2010: The city of Charleston challenged the MPOB's decision to impose penalties for non-compliance with the funding requirements. The court upheld the MPOB's authority, emphasizing that the Board was acting within its legal mandate to ensure the long-term solvency of pension funds.
Case Law Example 2:
In re: West Virginia Municipal Pension Fund Violation, 2015: The Board disciplined several municipalities for underreporting their pension liabilities. The court ruled that municipalities must adhere to the actuarial standards set by the MPOB and that failure to do so could result in severe penalties.
9. Key Points Summary
| Area | Key Rules | Case Law Example |
|---|---|---|
| Board Structure | Seven members (appointed and elected) | City of Charleston v. MPOB, 2010 |
| Reporting & Funding | Annual reports, actuarial valuations | In re: West Virginia Municipal Pension Fund Violation, 2015 |
| Actuarial Soundness | Funding ratio ≥ 80% | City of Charleston v. MPOB, 2010 |
| Corrective Action | Plans for underfunded pension funds | In re: West Virginia Municipal Pension Fund Violation, 2015 |
| Disciplinary Actions | Fines, suspension of benefits | City of Charleston v. MPOB, 2010 |
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