WV County School Boards File Suit over OPEB Funding

February 23, 2010 (PLANSPONSOR.com) - A lawsuit has been filed on behalf of 50 of West Virginia’s 55 county boards of education regarding the reporting and funding of Other Post Employment Benefits (OPEB).

A report on news station WBOY’s Web site said the boards argue in the suit that they should not be obligated to contribute more to the West Virginia Retiree Health Benefit Trust Fund than the amount of funding they receive from the state to take care of those OPEB costs.

The suit was filed against the Public Employee Insurance Agency (PEIA), the PEIA Finance Board, and the West Virginia State Auditor’s Office. PEIA created a health plan for state employees, and according to court documents, it is mandatory that the boards participate in that plan, the news report said.

Following the Government Accounting Standards Board’s regulation on reporting OPEB liabilities, West Virginia law says a small portion of the boards’ annual required contribution, known as the Minimum Annual Employer Payment (MAEP), is funded through the state’s Public School Support Program (PSSP), and the rest is paid by the boards. According to the news report, the lawsuit calls the PSSP and West Virginia Code Section 18-9-A-24(a) unconstitutional, and claims that they prevent the boards from meeting their obligation to provide a thorough and efficient system of free schools.

The boards say they cannot pay the total OPEB liability, and that funding that liability could result in a long list of harms, including reductions in staff, elimination of educational programs, and reduction in availability of matching funds for School Building Authority grants.

It also says the formula for the PSSP’s portion of the liability is inconsistent and doesn’t match up with some of the state code, according to the news report.