The West Virginia House of Delegates passed legislation that would close the West Virginia State Teachers' Defined Contribution Plan to employees hired after June 30 and merge it with a $1.4 billion defined benefit plan that was closed in 1991 to new employees. The defined benefit plan will be reopened. The bill, passed on Wednesday, now goes to the state Senate, which has only next week to act on it before the end of the legislative session, said Harry Mandel, actuary for the $500 million 401(a) plan.
The defined contribution plan has a higher employer contribution requirement than the cost of the defined benefit plan, Mr. Mandel said. The state hopes to save about 3% of payroll a year through moving teachers back into the defined benefit plan. In addition, both the West Virginia Educational Association and the American Federation of Teachers have expressed interest in moving teachers back into the frozen defined benefit plan, he said.
