15 September 2009

The Riveting World of Unfunded Liabilities

This month's legislative interim session featured at least two of West Virginia's more pressing unfunded liability problems -- serious gaps between on-hand assets and promised benefits.

Led by Huntington, a number of West Virginia's largest cities and town have been struggling beneath swelling liabilities in their police and fire pension funds. Interested parties have crafted the so-called "Huntington Plan" as a possible solution, but it requires legislative action.

Gov. Joe Manchin has said he will call the special session that plan supporters seek only if enough lawmakers appear to support it. Otherwise, the plan must wait until next year's regular session.

As The Associated Press and others report, a Monday meeting of the Legislature's majority Democrats revealed lingering concerns about the plan, particularly from those representing rural areas.

"Those areas rely on volunteer fire departments, which have sought retirement-like benefits to recruit and keep members," the article said. "The Huntington Plan does not address such benefits, but does dedicate a sliver of revenue from insurance policy surcharges toward ailing municipal pension funds."

The volunteer departments want that money instead, AP reports.

Sam Love, a lobbyist for volunteer fire departments, reminded a Monday interim committee that his clients provide the bulk of fire protection in the state. ‘‘If that one-tenth of one percent goes any where, it should go to the volunteer departments,’’ Love was quoted as saying.

Plan advocates remain hopeful that they can sway enough lawmakers. Others with coverage include The Charleston Gazette and The Register-Herald of Beckley.


AP and The Gazette are also among those reporting on an update to lawmakers regarding West Virginia's "other-post employment benefits," or OPEB liability.

These benefits are mostly health care promised to state employees, teachers and school workers once they retire. A consultant for the state told lawmakers Monday that "the Mountain State’s per-capita liability exceeds $4,000 — ranking it fifth nationwide — and the figure is projected to double within 10 years," AP reports.

"Rising medical costs — the same culprit fueling the ongoing push for federal health care legislation — have caused these unfunded liabilities to mushroom," AP explains. "The recession, meanwhile, has hampered government employers from paying the annual required contributions to reduce their funding gaps."

Others with coverage include the Charleston Daily Mail and MetroNews.

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