Kanawha Circuit Judge Paul Zakaib granted a preliminary injunction after learning that the Consolidated Public Retirement Board did not object, according to an Associated Press news report. The agency oversees both funds and is in charge of the merger, which had faced a July 1 deadline.
“The board recognizes that it could become an administrative nightmare to accomplish this at this time, if the plaintiffs were then to prevail,” said Anne Werum Lambright, the board’s general counsel, according to the news report.
Charlestonlawyer Jim Lees had requested the ruling on behalf of about 1,000 public education workers who want to keep personal control of their investment earnings from the state’s 401(k)-style retirement program. Lees also predicted that pouring the program’s assets, estimated at $645 million at the end of the last fiscal year, into the other fund would prove a “bookkeeping nightmare” for the state if later found unconstitutional.
Zakaib set a July 26 hearing for the legal challenge.
The Teachers’ Retirement System (TRS) takes 6.5% of an enrollee’s pay, while the 401(k)-style plan had a 4% contribution rate. The plaintiffs object to having to back-pay the difference in order to receive the maximum benefit under TRS. The state has offered low-interest loans for that purpose. It has also promised that enrollees in the now-closed plan will receive all investment earnings, as benefits upon retirement.