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OPINIONS
Bob Brown: Teacher pension plan a win for West Virginia
On June 3rd, to a chorus of cheers, the results of the teacher pension transfer vote were announced.
With more than 78 percent of the eligible participants selecting to transfer from a defined contribution pension plan to a defined benefit pension plan, over 15,000 teachers and school service employees will be moving into a bona fide retirement plan. For my members, many of whom have to work two jobs just to make ends meet, this is a signature moment in their working lives.
Let us also recognize that this is a win for West Virginia.
On a human level, the result of this vote means that we have finally corrected an injustice to the thousands of employees who were placed in a flawed retirement plan, one doomed to fail from the start. For these employees, retirement is now no longer a pipe dream; rather, it is a viable option.
From a financial standpoint, this is a windfall for West Virginia for a variety of reasons. First, the likelihood that these employees will need state assistance to supplement their retirement income once they retire has been dramatically reduced.
As a spokesperson for the Consolidated Public Retirement Board noted during the recently concluded legislative session, the contributions by the new participants as well as investment earnings on funds "swept" from the Teachers Defined Contribution Plan accounts will ultimately put the Teachers Retirement System closer into the black.
While the "old plan" is approximately 51 percent funded, the transfer of funds from the "new plan" will immediately increase the funding to nearly 55 percent.
Additionally, going forward, the state's pension contribution for these transferees will be significantly lower than it would have been in the Defined Contribution Plan, thereby saving the state even more money. Again, this is a win for West Virginia.
I am often quick to criticize when things go wrong, and slow to thank those responsible for our victories. Therefore, on behalf of the 8,000 members of the West Virginia School Service Personnel Association, I would like to thank the legislature and the governor for their support and leadership with this initiative.
Bob Brown is executive secretary of the West Virginia School Service Personnel Association, which represents non-teaching school service employees in all 55 counties.
