Chap. 309.—An ACT to amend and re-enact Sections 6, 8 and 18 of the Virginia
Retirement Act, Section 8 having been heretofore amended by an act approved
April 9, 1945, the said sections relating to membership, service retirement, and
management of funds, respectively. fH B 364]

Approved March 26, 1946

Be it enacted by the General Assembly of Virginia:

1. That sections six, eight and eighteen of the Virginia Retirement
Act, section eight having been heretofore amended by an act approved
April ninth, nineteen hundred forty-five, be amended and re-enacted, as
follows:

Section 6. Membership.—(a) Membership in the retirement sys-
tem shall consist of the following:

(1) All persons who become employees or who re-enter service
after the date of the establishment of the system ;

(2) All persons who are employees upon the date of the establish-
ment of the system; and

(3) All other persons who were teachers at any time during the
school year immediately preceding the date of the establishment of the
system.

(b) Any person who is an employee upon the date of the establish-
ment of the retirement system, and any person who was a teacher at any
time during the school year immediately preceding sych establishment,
within the period of one hundred and fifty days next succeeding such
establishment, and any person on leave from service at the time of such
establishment, within one hundred and fifty days next succeeding the
termination of such leave, may file with the Board, on forms prescribed
by it, a notice of his election not to be included in the membership of the
retirement system and a waiver of all present and prospective benefits
which would inure to him as a member, and in such case the Board shall
exclude him from membership. Any employee so excluded, however,
may thereafter become a member by making application for membership
to the Board, in which case he shall be included in the membership, but
no such employee shall receive prior service credit unless he makes his
application for membership within one hundred and fifty days after the
establishment of the system, or unless, in the case of a person on leave
from service at the time of establishment of the retirement system, he
makes his application for membership within one hundred and fifty days
after the termination of such leave; provided, however, the status of per-
sons who were in the armed forces of the United States on July first,
nineteen hundred forty-two shall be as declared by section six-a of this
act.

Any institution of higher education which, at the time of the estab-
lishment of the retirement system, has established, or which may there-
after establish, a retirement plan or arrangement covering in whole or in
part its employees engaged in the performance of teaching, administrative
or research duties, is hereby authorized to make contributions for the
benefit of its employees who elect to continue or be under such plan or
arrangement and elect to participate in such plan or arrangement rather
than in the retirement system established by this act. Any present or
future employee of such institution shall have the option of electing to
participate in either the retirement system established by this act or the
plan or arrangement provided by the institution employing him. The
election herein provided shall, as to any future employee, be exercised
not later than thirty days from the time of entry upon the performance
of his duties.

(c) The membership of any person in the retirement system shall
cease if he is continuously unemployed as a teacher or State employee for
a period of five years, or if in any ten-year period after he last became a
member he renders less than five years of service, or upon the withdrawal
by the member of his accumulated contributions, or upon retirement, or
upon death.

Section 8 Service retirement.—(a) Any member in service may
retire upon written notification to the Board, made by the member or by
his employer, setting forth at what time, not less than thirty nor more
than ninety days subsequent to the filing of such notification, the retire-
ment is to become effective, provided that such member at the time so
specified for his retirement has attained sixty-five years of age, or, in the
case of a teacher in service prior to July first, nineteen hundred forty-
two, has complied with the requirement for retirement set forth in chap-
ter thirty-six of the Code of Virginia as it existed immediately prior to
the passage of this act, notwithstanding that during such period of notifi-
cation he has separated from service. The words “any member in serv-
ice” as used in this paragraph shall not render ineligible for retirement
a member of the Virginia Retirement System who files his written notifi-
cation with the Board at a time subsequent to his being in service, pro-
vided that at the time he ended such service he was eligible for retirement
in all respects under this act and that before filing such notification he had
not withdrawn from the Virginia Retirement System and been paid his
accumulated contributions.

(b) Any member who has attained seventy years of age before the
date of establishment of the retirement system, or who attains seventy
years of age on or after such date, shall be retired forthwith; provided
that, upon the request of his employer in the case of a teacher, or the
head of the department, institution or agency by which he is employed,
in the case of a State employee, he may remain in service not longer than
the last day of the fiscal year during which he attains seventy years of
age, or if he is a State officer appointed by the Governor, he may, in the
discretion of the Governor, be retained in service during such period or
periods for which he may be appointed by the Governor. Notwithstand-
ing the foregoing provisions, however, until the conclusion of the war in
which the United States is engaged at the time of the enactment of this
act, upon the request of his employer, in the case of a teacher, or of the
head of the department, institution or agency by which he is employed,
in the case of a State employee, such member may remain in service for
such period or periods as may be determined by such employer or depart-
ment, institution or agency head, with the approval of the Board, if such
member is mentally and physically able to perform his duties efficiently,
but, upon conclusion of the said war, any member so remaining in service
shall be retired not later than the end of the fiscal year in which occurs
the conclusion of the war.

(c) Upon retirement as provided in this section a member shall
receive a service retirement allowance which shall consist of:

(1) An employee annuity which shall be the actuarial equivalent of
his accumulated contributions at the time of his retirement ;

(2) A State annuity of one-one hundred sixtieth (1/160) of his
average final compensation multiplied by the number of his years of mem-
bership service since he last became a member ;

(3) If the member has a prior service certificate in full force and
effect, an additional State annuity of one-eightieth (1/80) of his average
final compensation multiplied by the number of years of service certified
on his prior service certificate. This paragraph as hereby amended shall
apply to annuity payments due and payable subsequent to July first, nine-
teen hundred forty-five, to members of the Virginia Retirement System
who hereafter retire, and to former members of the Virginia Retirement
System who have heretofore retired, but no such retired former member
522 ACTS OF ASSEMBLY jVvA., 1946

of the Virginia Retirement System shall be entitled to any increased
payment because of this amendment for any period prior to July first,
nineteen hundred forty-five.

(4) In the case of a teacher, if the member has a prior service
certificate in full force and effect, an additional State annuity which shall
be the actuarial equivalent of the aggregate amount of all contributions
made by him, or on his behalf, under the provisions of chapter thirty-six
of the Code of Virginia as it existed immediately prior to the passage of
this act, as though such aggregate amount had been paid into the State
annuity accumulation fund on the date of establishment of the retire-
ment system and credited to the individual account of such member at
regular interest.

If a teacher retires after thirty years of creditable service and prior
to his attaining age sixty-five, in lieu of the State annuity and the addi-
tional State annuities which he would have received pursuant to this
section had he remained in service until attaining sixty-five years of age,
he shall receive a State annuity which shall be the actuarial equivalent of
the said State annuity and additional State annuities computed on the
basis of his attained age at the time of his retirement. In any event, how-
ever, a teacher shall receive, upon retirement under any of the provisions
of this section, a total State annuity which shall be at least sufficient to
provide, together with his employee annuity, a service retirement allow-
ance equal to the pension which he would receive were he pensioned un-
der the provisions of chapter thirty-six of the Code of Virginia as it ex-
isted immediately prior to the passage of this act, subject to the provisions
of the following paragraph.

In no event shall the total State annuity, in the case of any employee
who has a prior service certificate in full force and effect at the time of his
retirement, be more than sufficient to provide, together with his employee
annuity less any excess which he may have accumulated pursuant to the
provisions of section thirteen, subsection (h), a total service retirement
allowance of more than one-half of his average final compensation.

Section 18. Management of funds.—(a) The Board shall be the
trustee of the several funds created by this act and shall have full power
to invest and reinvest such funds, subject to the limitation that no invest-
ment shall be made except, upon the exercise of bona fide discretion, in
securities which, at the time of making the investment, are, by statute,
permitted for the investment of reserves of domestic life insurance com-
panies. Subject to such Itmitation, the Board shall have full power to
hold, purchase, sell, assign, transfer, or dispose of, any of the securities
or investments in which any of the funds created herein have been in-
vested, as well as of the proceeds of stich investments and any monies
belonging to said funds. The Board may also, in its discretion, invest
such trust funds in bonds, notes and other evidences of debt of the school
boards of the several counties, cities and towns of the State held in the
Literary Fund evidencing loans made from such Literary Fund by the
State Board of Education pursuant to the provisions of sections six
hundred thirty-two to six hundred forty-four, both inclusive, of the Code
of Virginia, and the State Board of Education is hereby authorized to
assign such bonds, notes and other evidences of debt to the Board when-
ever the Board desires to invest any of such trust funds therein and the

State Board of Education consents thereto: and when such bonds, notes

or other evidences of debt are so acquired by the Board the same may

not be sold or otherwise disposed of except to a State governmental
ency.

(b) The State Treasurer shall be the custodian of the several trust
funds of the retirement system. All payments from said funds shall be
made by him on warrants of the Comptroller issued upon vouchers signed
by such person as is designated by the Board. A duly attested copy ofa
resolution of the Board designating such person and bearing on its face
the specimen signature of such person shall be filed with the Comptroller
as his authority for issuing warrants upon such vouchers. No voucher
shall be drawn unless it has previously been authorized by resolution of
the Board.

(c) The Board annually shall allow to each fund of the retirement
system regular interest on the average amount credited for the preceding
year to each such fund, with the exception of the expense fund, from the
interest and dividends earned from investments. Any excess earnings
over the amount so credited may be used in reducing the amount of
contribution required of the State during the ensuing years and for ad-
ministrative expenses. Any deficiency shall be charged to the State an-
nuity accumulation fund.

(d) Regular interest shall mean such rate, compounded annually,
as shall be determined by the Board on the basis of the interest earnings
of the system for the preceding year and of the probable earnings to be
made, in the judgment of the Board, during the immediate future, such
rate to be limited to a minimum of two per centum and a maximum of
four per centum, but during the first year of operation of the retirement
system two per centum shall be treated as the regular interest rate.

(e) No member of the Board and no employee of the Board shall
have any interest, direct or indirect, in the gains or profits of any invest-
ment made by the Board, save in so far as any such member may be a
member or beneficiary of the retirement system, and no member of the
Board shall receive, directly or indirectly, any pay or emolument for his
services except as expressly provided in this act. No member of the
Board or employee thereof shall, directly or indirectly, for himself or as
an agent, in any manner use the funds or deposits of the retirement sys-
tem, except to make such payments therefrom as are authorized by the
Board; nor shall any member or employee of the Board become an en-
dorser or surety or in any manner an obligor for monies loaned by or
borrowed from the Board.

({) For the purpose of meeting disbursements for retirement allow-
ances and other payments, there may be kept available cash, not exceed-
ing ten per centum of the total amount in the several funds of the retire-
ment system, on deposit to the credit of the State Treasurer in one or
more banks or trust companies, located in Virginia, organized under the
laws of Virginia or of the United States, and qualified as State deposi-
tories.