WVA House Passes Pension Transfer Bill

February 22, 2008 (PLANSPONSOR.COM) - The West Virginia House of Delegates has approved a $78-million pension reform measure allowing teachers and other school employees to move from a 401(k)-style plan to the state's defined benefit pension plan for education employees.

A Charleston Gazette news report said the $78 million in the House bill will be used to subsidize the employees’ underfunded contributions to allow them to get full benefits in the Teachers’ Retirement System (TRS) (See  WV Legislators Vote to Help Teachers Move to Old Plan ). Under the House plan, which passed the chamber on an 86-8 vote, Teachers Defined Contribution (TDC) participants would have the choice to get 100% percent of TRS benefits by paying 1.5% of past earnings – a few thousand dollars for most teachers, the news account said.

Governor Joe Manchin’s original proposal had no taxpayer cost but required TDC participants to pay the full cost of their buy-ins, which would top $20,000 for many teachers,  according to the news report. Under both proposals, participants who switch to the TRS but do not pay a buy-in would receive pensions equal to 75% of the normal TRS benefits.

Meanwhile, the Senate, which now takes up the bill, is discussing a third option. Senate Finance Chairman Walt Helmick told the newspaper the Senate is looking at a $20-million plan – enough to subsidize contributions for teachers who are currently at retirement age.

«