TRS-TDC Merger Results
May 25, 2007
An appeal of Judge Zakaib's ruling was filed to the West Virginia Supreme Court by the Consolidated Public Retirement Board. Click here to find a copy of the appeal.
Below you will find an article from the Charleston Gazette regarding the appeal.
Teacher Pension Faces New Appeal
By Phil Kabler
Staff writer, Charleston Gazette- May 24, 2007
An appeal challenging a Kanawha Circuit Court ruling blocking the merger of the state’s two teacher pension plans will be filed with the state Supreme Court by Friday, Consolidated Public Retirement Board director Anne Lambright said Wednesday.
Last month, the board voted to have outside counsel Erica Mani prepare an appeal of the Jan. 29 ruling, which overturned plans to merge about 20,000 members in the 401(k)-style Teachers Defined Contribution plan into the Teachers Retirement System. Circuit Judge Paul Zakaib ruled that plans to sweep more than $750 million from the TDC accounts into the underfunded TRS program amounted to an illegal taking of the assets of the TDC participants.
At Wednesday’s retirement board meeting, the board took no other action on the suit — meaning that the board’s April vote stands — and a petition to the court appealing Zakaib’s ruling will be filed by the Friday deadline. “We think it was constitutional, and it was not a taking,” Lambright said Wednesday.
In 2005, the Legislature passed a law allowing TDC participants to vote on whether to go into TRS, a defined-benefits plan.
That legislation was backed by the state’s teachers unions, over concerns that the vast majority of TDC participants had woefully underfunded retirement accounts. Going into TRS would guarantee retirement benefits for those teachers and school service personnel.
However, about 1,000 teachers filed suit, arguing that it would be illegal for the state to seize the assets in their accounts, even if a majority of TDC participants voted for the merger, as they did in April 2006. Jim Lees, the attorney representing the teachers, said he could not comment on the appeal until he has an opportunity to review the petition to the court. He said previously he had expected the retirement board to appeal the circuit court decision.
The Legislature created the TDC in 1991 as a way to deal with the huge unfunded liability in the Teachers Retirement System. All teachers and school service personnel hired after 1991 went into the TDC plan, until it was closed on June 30, 2005.
The ongoing legal challenge leaves an undetermined number of retirement-age TDC participants in limbo, unable to retire on their TDC assets and unable to enroll in the defined-benefits plan.
April 11, 2007
Retirement Board votes for appeal
Members of the state Consolidated Public Retirement Board voted to appeal a Kanawha Circuit Court ruling blocking the merger of the state’s two teacher pension plans (TRC and TDC). The board voted unanimously to instruct staff attorneys to prepare an appeal to the state Supreme Court of the Jan. 29 ruling by Kanawha Circuit Judge Paul Zakaib.
The board must file the appeal with the West Virginia Supreme Court by May 25.
February 21, 2007
Retirement Board meets - discusses lawsuit
The Retirement Board took a number of actions today related to the TDC-TRS lawsuit.
The first was to instruct the Board’s legal counsel to study the Circuit Court’s decision, research the constitutional issues and bring a recommendation to the Board at the April meeting regarding appealing Judge Zakaib’s ruling to the WV Supreme Court.
Additionally, legal counsel was requested to explore other legal remedies that participants in the TDC may have related to their participation in the TDC and performance of their funds.
Finally, the CRPB urged the legislature to allocate $30,000 to $50,000 to do an actuarial study. The purpose of the study is to determine the cost of creating a window period for TDC participants to transfer to the TRS.
The Boards’ actuary estimated that the study would take four to six months to complete.
February 8, 2007
TRS-TDC Option Bills Surface
Senate Bill 486 and HB 2865 both address the issue of the TDC. The bills, drafted by WVEA,
January 26, 2007
Retirement Merger Lawsuit Decided
Late this afternoon, Judge Zakaib issued a ruling in the retirement merger system lawsuit. Zakaib ruled in favor of the plaintiffs and decided the merger was unconstitutional.
“We are glad that Judge Zakaib finally ruled on the case,” states WVEA Executive Director David Haney. “That puts us one step closer to a final decision on the merger issue. Both parties have indicated that regardless of the outcome, the case was going to be appealed to the Supreme Court. This decision now gets the case into their hands.”
To address the issue of the merger, WVEA introduced a bill in the legislature that would allow a one time chance for all participants in the Defined Contribution Plan (new plan) to return to the old Teachers Retirement System or choose to remain in the defined contribution plan. Delegate Craig (Cabell) is the lead sponsor on the bill. The bill is currently in Legislative Bill Drafting and should be introduced next week. We will let you know as soon as the bill is introduced and is given a number.
“This case has dragged on for so long that it is unfair to those individuals who are considering their retirement options this year,” said Haney. “We introduced this legislation so individuals could make their decisions and everyone could get on with their lives. This issue has gone on far too long and it needs to finally be closed."
Hearing Held - No Decision Rendered - July 26, 2006
A two-hour hearing on the retirement merger was held today in the chambers of Kanawha Circuit Judge Paul Zakaib.
Both sides presented arguments – Jim Lees on behalf of the plaintiffs and Anne Lambright represented the Retirement Board. Judge Zakaib gave no indication of his leaning in the case and gave each of the attorneys thirty (30) days to submit Findings of Fact and Conclusions of Law. After those are submitted, Judge Zakaib may issue his ruling. He has set no timelines for handing down his ruling.
WVEA will keep you informed when there is further action in the case.
Judge Grants Temporary Injunction - May 1, 2006
Kanawha Circuit Judge Paul Zakaib granted a preliminary injunction after learning that the Consolidated Public Retirement Board did not object. The agency oversees both programs and is in charge of the merger, which had faced a July 1 deadline.
"The board recognizes that it could become an administrative nightmare to accomplish this at this time, if the plaintiffs were then to prevail,'' said Anne Werum Lambright, the board's general counsel.
Zakaib set a July 26 hearing for the legal challenge.
Injunction Hearing Scheduled - April 25, 2006
A hearing on a preliminary injunction to block the merger of the TDC plan with the TRS is scheduled for Monday, May 1 at 10:30 am. The hearing will be before Kanawha Circuit Judge Paul Zakaib. Charleston attorney Jim Lees has filed the injunction.
The injunction seeks to prohibit the merger of the plans until the court can rule on the legality of the merger. The merger is currently scheduled for July 1.
WVEA will post an update on the hearing as soon as information is available.
Retirement Merger Vote Announced - April 3, 2006
The Retirement Board announced the results of the voting to merge the two retirement systems earlier today (April 3, 2006). The fifty percent voter threshold was met with 56% of the individuals in the TDC system casting a ballot.
Sixty-one percent (61.4%) voted in favor of the merger. Thirty-nine percent (38.6%) voted against the merger.
The vote was in favor of merging the TRS and TDC retirement systems. Information regarding the next steps to be taken will be sent by the Retirement Board to TDC participants. The merger would go into effect on July 1, 2006.