Pension Protection Act – Tax Exemption Information Sheet

Under the guidelines of the federal Pension Protection Act (PPA) of 2006, eligible Public Safety Officers (PSO) may

annually exclude up to $3,000.00 of gross retirement income when it is distributed from a governmental defined

benefit plan and applied toward the payment of qualified insurance premiums. The West Virginia Legislature

extended this tax exclusion to West Virginia’s retired public safety officers during the 2007 Regular Legislative

Session. WV Code §5-10D-6a enables qualified PSO’s who are retired by any retirement plan administered by the

West Virginia Consolidated Public Retirement Board (CPRB) to elect to have a designated amount deducted from

their retirement benefits to pay for qualified insurance premiums.

The Pension Protection Act enables qualified public safety officers to exclude up to $3,000.00 of gross

retirement income each tax year.

This tax exclusion pertains to income distributed from a governmental defined benefit plan for payment of

qualified accident or health insurance premiums, including vision, dental and certain long-term care contracts.

To qualify for the tax exclusion, public safety officers must be separated from employment due to attainment of

normal retirement age or disability.

The amount of qualified insurance premiums excludable from gross income cannot exceed $3,000.00 per tax

year or the total amount of combined qualified insurance premiums paid in any taxable year.

The tax exclusion will become effective the first day of the month following CPRB’s receipt of completed

PSOA-form.

This tax exclusion program is available to qualified public safety officers as defined by the federal Omnibus Crime Control and Safe Streets Act of 1986 (42 U.S.C. 3796b(9)(A)):

Public Safety Officer means, individual serving a public agency in an official capacity, with or without compensation, as a law enforcement officer, firefighter, chaplain for a police or fire department, or member of a rescue squad or ambulance crew, corrections officer, probation officer, parole officer, judicial officer and any other individuals involved in crime and juvenile delinquency control or reduction or enforcement of the laws.

Should you wish to participate in this tax exclusion program in 2019, please complete the enclosed 2019 PSOA election form and return it along with your retirement packet. Please note that you are required to sign, date and return both pages of the PSOA form to the CPRB.

ELIGIBILITY

A PSOA FORM MUST BE COMPLETED AND RESUBMITTED TO THE CPRB EACH YEAR IN ORDER TO CONTINUE

ELIGIBILITY FOR THIS TAX EXCLUSION PROGRAM.

KEY PROVISIONS

LEGISLATIVE HISTORY

State of West Virginia Consolidated Public Retirement Board

4101 MacCorkle Avenue SE, Charleston, West Virginia 25304-1636 Telephone: 304-558-3570 or 800-654-4406 Fax: 304-558-1394 or 304-558-5455

CPRB@wv.gov www.wvretirement.com

Instructions: The purpose of this form is to elect to have qualified health insurance premiums paid directly to an insurance provider and the cost deducted from your monthly CPRB benefit. "Qualified health insurance premiums include certain accident or health insurance plans and certain long-term care insurance contracts administered by an insurance company regulated by a State or an employer’s self-funded plan.” (PEIA is covered under this definition.) Read “About PSOA -2019 Form” on page 2 before completing this form.

Retired Public Safety Officer Authorization For Insurance

Premium Deduction PSOA-2019

4101 MacCorkle Avenue, SECharleston, WV 25304

304-558-3570 or 800-654-4406www.wvretirement.com

Consolidated Public Retirement Board

Section 1: Retiree Information

Employer at the Time of Retirement - Agency Name Job or Position Title at the Time of Retirement Are you retired from more than one retirement system administered by CPRB?

Yes No

Mailing Address City State Zip Code

Retiree's Name Last 4 Digits of SSN Telephone Number

Section 2: Insurance Carrier Information

Change Previously Designated Payments Stop Previously Designated Payments

Insurance Company Name Group/Policy Number

City State Zip Code

Premium Payment Options (check one option only): I hereby authorize CPRB to: withhold entire monthly PEIA health insurance premium until $3,000 limit is met

withhold $_____________ monthly

CPRB may require proof of marriage and dependents

Coverage Type:

Daytime Telephone Number

Insurance Type: Vision Dental

Long-Term Care

Retiree Only Retiree and Spouse Retiree, Spouse and Dependents

withhold $_____________ as a one time payment

•

CPRB ID

Section 3: Retiree Acknowledgement I certify that I am eligible to have the designated insurance premiums excluded from taxable income, pursuant to Internal Revenue Code Section 402(l) and WV Code § 5-10D-6a.I authorize CPRB to pay the insurance premiums directly to the insurance carrier and deduct the cost from my monthly benefit. This will result in a decrease in my monthly pension annuity.I understand that the maximum amount of insurance premiums excludable from income from this retirement plan, as well as other qualified government retirement plans, 403(b) plans and 457(b) plans, is $3,000 per year total.I understand that it is my responsibility and obligation to inform CPRB of any change related to my qualified health insurance premium deduction including, but not limited to, coverage, insurance company, or premium changes.I understand that CPRB is performing an administrative function permitted by federal law in withholding insurance premiums from my pension benefits.I understand that any and all tax implications of my election are solely my responsibility, and I agree that I will make no claim against CPRB for consequences of my election.I understand that CPRB is not responsible for late fees, lapsed premiums or lapsed insurance policy coverage or any other coverage of benefit issues that may arise between my insurance carrier and myself.I understand this authorization is effective the first day of the month following CPRB’s receipt and expires December 31, 2019, providing ICA is on file. A new authorization must be completed annually. Sign and date in BLUE INK.NOTE: Once accepted by CPRB, this form supercedes all previously executed PSOA Forms under your retirement system.

Date SignedPage 1 of 2

Address

Medical

Is the Group Insurance Coverage/Policy Number or prepayment plan named above offered by your employer to Retirees? Yes No

•

•

•

•

•

•

•

Retiree Signature

The qualified health insurance premiums authorized to be paid will be deducted after all current deductions are withheld.

Check all that apply: New Designation

PSOA-2016 WVAF0008 - Jan 2016

1. Complete Sections 1 and 2 of the PSOA-2019 Form.2. Attach a copy of the invoice for all qualifi ed health insurance payments, except PEIA.3. Sign the form in blue ink and mail it to CPRB.Note: Resubmit the PSOA-2019 Form if you have changes to a previously designated insurance provider or premium amount or to stop insurance premium paymen ts.

About the PSOA-2019 Form

RETAIN A COPY FOR YOUR RECORDS Page 2 of 2

Retiree Signature Date Signed

By signing this form, I agree that I will not make any legal claim of any kind against CPRB, its staff and advisors should my participation in this program result in unexpected tax liability to me, including interest and penalties. I understand that my ability to participate in this program is a valuable benefit for which I am willing to agree to this waiver of all claims. I further release CPRB, its staff and advisors from any liability arising from the administration of payments to any insurer.

▪

▪

▪

▪

▪

This is a benefit enacted by congress and the IRS has not provided guidance to date on the application of this program. CPRB is proceeding with implementation of the program based on its understanding of the information currently available, with the anticipation that the program might require revisions and adjustments as the provisions of the Pension Protection Act of 2006 are interpreted and clarified. By participating in the program, you acknowledge that changes may be required and that changes could affect your eligibility or the eligibility of your insurance carrier or policy. It may also result in reversal of some transactions. You agree that any benefit or privilege granted under this program is subject to change or revocation, that you will cooperate with any adjustments, and that CPRB is not responsible for any consequence of any change to the program, including unexpected tax liability, interest and penalties.

Important Legal Notice

Instructions

Waiver of Claims

Eligibility for Tax-Free Distributions for Health and Long-Term Care Insurance

Notes About Tax-Free Distributions For Insurance Premiums

Public Safety Officer means an individual serving a public agency in an official capacity, with or without compensation, as a law enforcement officer, firefighter, chaplain for a police or fire department, or member of a rescue squad or ambulance crew, correction officers, probation officers, parole officers, judicial officers, and any other individuals involved in crime and juvenile delinquency control or reduction or enforcement of the laws.Eligible Retired Public Safety Officer means an individual who, by reason of disability or attainment of normal retirement age, is separated from service as a public safety officer with the employer who maintains the eligible retirement plan from which distributions are made.Upon the death of a Public Safety Officer, IRC 402(l) does not allow a surviving spouse or other beneficiaries to receive this tax-free distribution.

Section 845 of the Pension Protection Act of 2006 allows public safety officers to elect to exclude up to $3,000 of distributions from a governmental qualified retirement plan from taxable income as long as the payments are made directly to an insurer to purchase health or long-term care insurance for the officer or the officer’s spouse and/or dependents.

▪

▪

Internal Revenue Code Section 402(l) and WV Code § 5-10D-6a authorize CPRB to offer this voluntary election, but only with insurance carriers that have completed and filed the Retired Public Safety Officer Insurance Carrier Agreement (ICA) with the CPRB. Requests from members for payment of premiums to insurance carriers who have not filed the ICA form will be referred to the insurance carrier. CPRB may provide members a list of insurance carriers that have filed the ICA form upon request to determine whether or not they will participate.

▪

▪▪

▪

▪

You must submit a separate copy of this form for each insurance policy you are designating for direct payment by CPRB. The insurance premiums you designate on this form will be paid directly to the named insurance company by CPRB and the cost will be deducted from your monthly benefit.The cost of insurance premiums, up to $3,000, is excluded from your taxable income for federal withholding purposes.You can use income from more than one retirement plan to pay insurance premiums, but the maximum income exclusion the I.R.S. allows for all plans combined is $3,000 per year. You are responsible for complying with this federal limit and for consequences if your designated insurance premiums exceed the limit.Premium payments will begin upon the CPRB’s approval of your insurance carrier and after CPRB receives a completed and signed PSOA-2019 Form. Incomplete and unsigned forms will not be processed and you will be notified that you must resubmit the form.You are responsible for contacting your insurance carrier should an over/underpayment of premiums occur due to CPRB not being notified of premium changes or policy cancellations.

The form must be signed and dated to be valid. I have read and I understand the information in “About the 2019 PSOA Form” and agree to all of the conditions for this election including the Waiver of Claims.

Normal retrirement age for determination of eligibility means a member who has retired with an unreduced benefit.

Insurance Carrier Participation

PSOA-2016 WVAF0008 - Jan 2016