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After a lot of squabble, instead of costing the state millions of dollars, the transfer of nearly 15,000 teachers and school personnel from a 401(k)-style plan to a defined benefits plan will save about $22 million in pension costs, according to information given to legislators this week.
Originally, estimates indicated the transfer could cost the state as much as $78 million, to subsidize pensions for teachers and service personnel who transferred to the Teachers Retirement System but had limited assets in their Teachers Defined Contribution plans.
The Charleston Gazette reported that Harry Mandel, actuary for the state Consolidated Public Retirement Board, told a legislative interim committee that surprisingly large numbers of TDC participants at or near retirement age did not transfer.
He said a surprisingly high percentage of under-40 teachers and service personnel voted to switch to TRS.
"Our overall results are costs well below what we expected," Mandel told the Joint Standing Committee on Pensions and Retirement.
The retirement board had projected that nearly 100 percent of all teachers and service personnel age 65 or over would switch to the pension plan with defined benefits.
Only 50 percent of TDC participants over age 70 transferred, and only 69 percent in the 65-to-69 age group opted out, the Gazette said.
Those age groups posed the greatest potential liability to the state, since taxpayers would have had to essentially subsidize their entire pensions.
"What we're hearing today is good news in terms of potential liability to the state," said committee chairman Sen. Dan Foster, D-Kanawha.
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