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Compromise

Pension proposal meets key test

March 18, 2008
Parkersburg News and Sentinel
Thousands of public school teachers who want help with their retirement programs will get it if the West Virginia Legislature goes along with a plan crafted by Gov. Joe Manchin’s office.

Based on what we have learned about the plan, we believe it is a responsible one that should be approved by lawmakers.

Two key concerns appear to have been addressed in the proposal:

First, educators in the Teachers Defined Contribution pension program who have been disappointed in performance of their investments would be given an opportunity to transfer to the Teachers Retirement System. Pension amounts are guaranteed under the TRS, but not under the TDC.

Second, taxpayers would not be hit with massive new unfunded liabilities for the TRS, according to actuarial studies of the proposal. That is of critical importance; the last thing West Virginians need is to add to the approximately $3 billion in TRS unfunded liabilities.

During the 60-day regular session of the Legislature, several proposals regarding pensions for teachers were offered. The governor’s office, House of Delegates and state Senate all offered bills, each differing in details. When the session ended last weekend, there was no agreement on what plan to pursue.

But on Friday and Saturday, a recommendation that appears to be satisfactory was hammered out by Manchin’s office.

Providing that at least 65 percent of the 19,100 TDC members agree to transfer to the TRS, they would be allowed to make the switch. They would be entitled to pensions at 75 percent of the level paid to existing TRS enrollees.

To receive full TRS benefits, the TDC transferees would have to provide “make-up payments” that would reflect the difference in how much they have contributed to their retirement program, compared to what existing TRS members pay. TDC enrollees pay 4.5 percent of their salaries to their retirement plan, while those in the TRS pay in 6 percent.

Details of the proposal were just beginning to trickle out to legislators on Saturday afternoon, with some saying that a vote on it could come as early as today. Some lawmakers reportedly were concerned that they did not know enough about the proposal to make informed decisions and might have to wait until later in the week to deal with it.

However, information available Saturday on the recommendation sounded good — both from the standpoint of helping thousands of educators and that of safeguarding West Virginia taxpayers. In appearing to meet both of those tests, the governor’s proposal merits support from legislators.
 
 
 

 

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