                                 CODE OF VIRGINIA

PROCEDURE WHEN EMPLOYER IN DEFAULT (§ 51.1-139)

An employer&#8217;s agreement to contribute on behalf of its employees who
become members shall be irrevocable. If an employer for any reason becomes
financially unable to make the contributions payable on behalf of the members,
the employer shall be deemed to be in default and the employees&#8217;
membership in the Retirement System shall be terminated. As of the date of the
default, (i) each member or beneficiary whose coverage under the Retirement
System is affected by such default shall become fully vested, (ii) the actuary
of the Retirement System shall determine by actuarial valuation the amount of
the reserves held on behalf of each then member and each then beneficiary, and
(iii) the Retirement System shall credit to each member and each beneficiary the
amount of reserve so held. The reserve so credited together with the amount of
the accumulated contributions of each member, shall be disbursed in a manner
prescribed by the Board consistent with the applicable tax qualification rules
of the Internal Revenue Code, whereupon the rights and privileges of the members
and beneficiaries shall terminate.

HISTORY: 1952, c. 157, § 51-111.38; 1960, c. 604; 1986, c. 474; 1990, c. 832;
2004, c. 207.