Compliance March 10, 2008

WVA Pension Transfer Bill Delayed for Cost Analysis

March 10, 2008 (PLANSPONSOR.com) - A decision on a bill allowing West Virginia teachers to move their retirement savings from a state defined contribution system to the prior defined benefit system was delayed at the request of Governor Joe Manchin on Saturday.
Reported by

The Charleston Gazette reported that Manchin wants to take this week to have experts from the Consolidated Public Retirement Board and financial advisers from the Public Research Advisory Group verify that the proposed plan will not cause a serious unfunded liability for the Teachers’ Retirement System (TRS) or hurt the state’s bond ratings on Wall Street.

The compromise bill in the Senate, HB4496, would have adopted the House’s version of benefits for Teachers Defined Contribution plan participants (See WVA House Passes Pension Transfer Bill ), but estimates showed that though the House proposal would have no cost to the state if 85% or more of TDC participants switched, it could cost as much as $78 million in a “worst-case scenario,” the Gazette said.

The first proposal allowing the move required participants to pay into the TRS to make up for lost years of service in the plan in order to receive full benefits. The house bill provided state help for those payments.

Legislators have hopes they can resume discussion on the bill as soon as this week in a brief special session following passage of the budget bill, according to the news report.

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