The Associated Press reports that West Virginia’s governor deposited $807.5 million from the recent sale of bonds backed by future tobacco settlement payments. West Virginia’s TRS was only 22% funded just three years ago, but the current bond proceeds should bring the funding level to 51%, the AP said.
Last year the San Diego City Employees Retirement System also used the sale of tobacco settlement bonds to decrease a $1.4 billion deficit (See San Diego Council Approves Tobacco Settlement Funds Use for Pension Deficit ).
Aside from funding issues, the West Virginia TRS has faced controversy over a planned merger of more than 20,000 teachers and school service employees enrolled in the state’s 401(k)-style Teachers Defined Contribution plan (TDC) into the TRS. A judge ruled the merger could not take place because it amounted to an illegal taking of the assets of participants in the TDC plan (See West Virginia Pension Board Appeals Plan Merger Ruling ).