Current through Register Vol. XLI, No. 24, June 14, 2024
Section 162-4-8 - Loan Repayment8.1. In order to comply with the provisions of section 72(p) of the United States Internal Revenue Code of 1986 as required by W. Va. Code § 18-7A-34, upon the retirement of a member including retirement for disability or withdrawal prior to retirement, any unpaid loan balance including any compounded interest due shall be repaid in full by the member prior to retirement or withdrawal in one of the following manners:8.1.1. Payment in full with personal funds;8.1.2. Offset by means of lump sum deduction from the member's refund of accumulated contributions; or8.1.3. Offset by means of an actuarial reduction of the member's monthly benefit. The reduction of the member's monthly benefit shall be determined by deducting from the actuarial reserve for the accrued benefit the lump sum amount of the unpaid loan balance including any compounded interest due and then converting the remainder of the reserve to a monthly benefit payable in the form elected by the member.8.2. If, after the cessation of covered service and prior to a withdrawal of accumulated contributions or the commencement of an annuity, a member's membership in the Retirement System terminates as a result of the outstanding balance of any loan obtained by the member, plus accrued interest, equaling or exceeding the member's accumulated contributions, then as of the date of the membership termination the member will be considered to have requested a distribution from the Retirement System in the form of a withdrawal of accumulated contributions, so that offset of the outstanding loan balance may be made at that time pursuant to W. Va. Code § 18-7A-34.8.3. If a member dies prior to full repayment of any unpaid loan balance including any compounded interest due, the loan amount due shall be offset in a lump sum from either the refund benefit payable to the refund beneficiary or the annuity or death benefit otherwise payable to the survivor beneficiary, whichever is applicable. The reduction of a survivor beneficiary's monthly benefit shall be determined by deducting from the actuarial reserve for the benefit the lump sum amount of the unpaid loan balance including any compounded interest due and then converting the remainder of the reserve to a monthly benefit payable in the applicable form.8.4. If a member's refund of accumulated contributions or the actuarial reserve for the accrued benefit, whichever is applicable, is not sufficient to repay the unpaid loan balance in full including any compounded interest, the member (or the member's estate, if deceased) shall pay the amount necessary to fully repay the amount due.8.5. All loan payments remitted by an employer are due the Retirement System within fifteen (15) days following the end of the calendar month for which the payment is made.8.6. All loan payments remitted by personal payment, if permitted, are due the Retirement System by the last day of the calendar month for which the payment is due.8.7. Any term used in this section shall have the same meaning as when used in a comparable context in the laws of the United States, unless a different meaning is clearly required.