West Virginia Metro News reports a previous bill from Governor Joe Manchin requires members of the Defined Contribution Retirement Plan to pay 25% of their years of service to receive a 100% benefit after going back to the older retirement plan. The House bill requires only a 1.5% payback from teachers and service personnel and the state would pay $78 million to make up the difference.
In addition, under the House bill employees could choose not to pay into the older plan and receive an amount equal to 75% of their years of service, the news report said. The House bill also would allow employees to borrow up to $20,000 to pay their share.
The proposed bill requires 75% of current members of 401(k)-type retirement plan to agree to transfer to the Teachers Retirement System, while the governor’s bill requires 70% to do so.
The state Supreme Court upheld a lower court ruling that legislation allowing for a merger of the two plans was unconstitutional because it amounted to an illegal taking of property of participants in the Teachers Defined Contribution plan That legislation also closed the DC plan to new enrollees and reopened the older plan to future hires (See WV Retirement Board Loses Appeal for Teacher Plans Merger ).