Strong Returns Help WVA Pensions Funding Gap

July 29, 2005 (PLANSPONSOR.com) - Funding gaps in West Virginia's pension plans were slightly narrowed by greater than expected investment returns for the year ended June 30, 2005.

The Associated Press reports that all six state pension plans that invest in the stock market realized double digit returns during the budget year.   The Teachers Retirement System enjoyed a 10% return, and both the public employees and judicial pension plans realized a 10.7% return.   The estimated return for all plans was 7.5%.

The strong returns are welcome help after the state’s proposed legislation to sell $5.5 billion in bonds to help fund the plans was rejected by voters (See  West Virginia Governor Vows Door Knocking Campaign for Pension Bond Initiative ).  

West Virginia’s judicial pension plan has a $22 million unfunded pension liability, the state troopers’ unfunded pension liability is over $344 million, and the state’s Teachers Retirement System (TRS) has a shortfall of over $5 billion.  

The TRS is reported to be the worst-funded state plan in the country.   Earlier in the year, a measure was approved to close the teachers’ defined contribution plan, established in 1991 due to funding problems of the TRS defined benefit plan, and restore the DB plan (See  Proposal for West Virginia DC to DB Conversion Passes House Panel ).

According to the Associated Press, the funding growth attributable to the strong investment earnings for the year include $311 million for the Public Employees Retirement System and $205 million for TRS.

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