Benefits June 3, 2008

WV Teachers' DC to DB Switch Gets Required Educator Vote

June 3, 2008 (PLANSPONSOR.com) - A group of West Virginia teachers will get the chance to transfer out of their defined contribution program and into the state's defined benefit pension plan, officials announced Tuesday.
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Some 15,512 or 78.3% the teachers enrolled in the Teachers’ Defined Contribution (TDC) plan voted to transfer, according to the state’s Consolidated Public Retirement Board Web site. Because of the balloting results, those TDC participants will now receive an estimated $24.5 million in state funds to ease the DC to DB transfer, the Associated Press reported.

The traditional pension plan requires members to contribute 6% of pay, compared to 4 1/2% for the TDC plan. The vote broke the 75% approval threshold needed to trigger the state subsidy that pays the difference in contribution rates.

TDC participants had complained that they could not retire on the earnings from their individual investment accounts under the plan (See WVA House Passes Pension Transfer Bill ).

Those who did not elect to transfer can keep their TDC accounts.

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