W.Va. Senate panel proposes multi-decade approach to tackling state’s retiree costs

W.Va. eyes multi-decade approach to retiree costs

CHARLESTON, W.Va. — West Virginia lawmakers have identified 17 wide-ranging options for tackling the state’s estimated $7.8 billion funding shortfall that stems from public retiree costs.

A special Senate Committee shared the suggested ways for dealing with “other post-employment benefit” or OPEB costs during closed meetings Tuesday.

While declining to detail the recommendations, committee Chairman Brooks McCabe said he hoped to develop a final list of proposals and introduce the necessary legislation during the 60-day regular session that began last week.

“I think it was well-received,” said McCabe, of Kanawha County, after the caucus of fellow Democrats.

OPEB costs mostly reflect retiree health coverage. The list, obtained by The Associated Press, includes depositing $200 million between 2011 and 2012 into a special trust fund. A related suggestion would afterward dedicate up to $150 million annually toward these costs over the next several decades. The state has adopted a similar plan for closing a multibillion-dollar shortfall in its main teacher pension fund.

Other recommendations would have the state assume part of the costs now billed to county school boards. Nearly all of state’s 55 county school boards told the Public Employees Insurance Agency last month that they plan to sue over these billings.

The committee is also considering upping the retirement age of teachers and most state workers hired after June 2011 from 55 to 60, while also holding off when they become eligible for benefits from five to 15 years.

Senate Republicans also met to hear the recommendations Tuesday.

“It is a good work product, and the parts are still moving somewhat,” said Sen. Mike Hall, R-Putnam and a committee member. “This is going to be one of the more heavy-lifting items of the session.”

Government accounting standards call on public employers to calculate and disclose gaps between on-hand assets and non-pension retirement benefits like health coverage promised to workers.

Responding to that standard, the Legislature adopted a 2006 measure from Gov. Joe Manchin that has PEIA charge government employers yearly amounts meant to address West Virginia’s unfunded liability.

School boards question whether the state should instead pay, as PEIA sets retiree health benefits and rates. They also object to having to list as current debt what they don’t or can’t pay toward their “annual required contribution.”

The committee has suggested that PEIA allow employers to list part of what’s left unpaid as long-term debt, while lowering the annual amount of what must be paid. Each of those proposals would require legislation, as would four others outlined by the committee.

The recommended cost shifts would apply for the benefits of county school teachers whose salaries are provided by state funds.

Other suggestions would change the way PEIA calculates premiums for non-retired enrollees, and narrow the gaps between the deductions and out-of-pocket costs that enrollees pay. The list also includes an alternative, cafeteria-style health plan that would charge enrollees based on the benefits they choose.