West Virginia’s pension system reported last week its unfunded liabilities jumped by about $2 billion, or 41%, in fiscal 2009. The Consolidated Public Retirement Board said obligations to retirees in the state’s seven pension funds increased to $7 billion for the fiscal year ending June 30.
The asset value of the largest fund, the teachers’ defined benefit fund, which covers 29,245 retirees, fell 14% to $3.6 billion and was 41.3% funded. To help offset the rising liabilities, the board last week approved an increase in employer contributions to 17% from 11%, the Charleston Daily Mail reported Friday.
The state Legislature has rejected previous pension reform measures because the proposed legislation included taxes to pay down plans’ underfunded liabilities.
In August, Standard & Poor’s upgraded West Virginia’s general obligation debt to AA from AA-minus. At the time of the upgrade, analysts said the state’s pension and other post-employment benefit liabilities “remain an area of relative weakness.”
The state is rated Aa3 by Moody’s Investors Service and AA-minus by Fitch Ratings, both with positive outlooks.
In June 2007, West Virginia sold $807 million of tobacco settlement bonds to help reduce the unfunded liability in the teachers’ pension program.
