More than three out of four active participants in a West Virginia defined contribution plan for state educational system employees transferred their retirement savings to a state defined benefit plan, Anne Werum Lambright, executive director of the West Virginia Consolidated Public Retirement Board, Charleston, said in an interview today.
All told, 78.6%, or 14,925, participants made the switch. Ms. Lambright said that while 76% of participants in the West Virginia Teachers Defined Contribution Plan under age 40 transferred their savings, only 50.5% of DC plan participants ages 70 and older made the switch, while 69% of those ages 65-69 made the transfer to the DB plan, the West Virginia Teachers Retirement Plan.
A state law approved early this year cleared the way for the transfer, and because at least 75% of DC plan participants opted to make the switch, state lawmakers provided $22.5 million in funding to help subsidize the transfer, which was a provision of the law, Ms. Lambright said.
The fact that fewer older workers opted to transfer out of the DC plan was good news for the state and the DB plans unfunded liabilities, Ms. Lambright said.
We were very surprised, she said. Contrary to expectations, a lot fewer of the older members transferred, she said.
Ms. Lambright said the retirement board had yet to calculate final asset values for the DB and DC plans as a result of the transfer, but no additional cash infusion from the state would be required for the teachers DB plan.
We learned by these figures that there is no necessity to add any additional contributions from the state to ensure that the unfunded liability is not worsened by this transfer, she said.
As of July 1, 2007, the latest data available, the teachers DC plan had assets of $908 million, while the DB plan had assets of $3.6 billion, Ms. Lambright said. The consolidated retirement board oversees both plans.