The CPRB’s move to appeal the January 29 decision by Kanawha Circuit Judge Paul Zakaib (See W. Va Teachers’ Retirement Plan Merger Unconstitutional) came after an hour-long closed-door session, according to a Charleston Gazette news report.
Zakaib asserted that the planned merger of more than 20,000 teachers and school service employees enrolled in the 401(k)-style Teachers Defined Contribution plan (TDC) into the larger Teachers Retirement System plan (TRS) could not take place because it amounted to an illegal taking of the assets of participants in the TDC plan.
He ruled it would be unconstitutional, since the proposal called for “sweeping” about $750 million of assets in the TDC accounts into the TRS, the severely underfunded defined benefit pension plan.
In 2005, the Legislature passed a bill to authorize TDC participants to vote on whether to go into the defined benefits plan, after representatives of state teachers’ unions complained that a vast majority of TDC participants have woefully under-funded accounts.
The ruling comes nearly nine months after Zakaib temporarily blocked the plan to combine the two retirement funds to wait for a ruling in a case led by high school teacher Anthony Barberio. Barberio had argued that he was satisfied with the investments he made in his 401(k)-style account and that the move to merge the funds would cost him money (See Court Blocks W. Va. Pension Merger ).