CHARLESTON - Members of the House of Delegates workgroup examining the cost of retirement benefits to cities, counties and the state are praising the state Consolidated Retirement Board for making a significant change to its accounting standards today - a move that should provide immediate relief to both local and state government budgets.
“We are grateful to the Consolidated Public Retirement Board for re-examining how it calculates pension debt and projects assets and losses,” said Delegate Steve Kominar, who chairs the House workgroup. “It’s important that the board considered projected assets and losses over the course of years, rather than constantly reacting to a fluctuating market.”
House Finance Vice Chairman Tom Campbell, who also serves on the workgroup, agreed. Campbell, an accountant, said the method the board is adopting, referred to as “smoothing,” makes the funding of the pension system more stable and predictable.
“By making this change, the board will bring stability to our pension budget, which has a tremendous effect on the state’s overall financial well being,” Campbell said.
The House workgroup has been looking at many aspects of how to address the issue of Other Post Employment Benefits. In a position paper the workgroup has been developing during its public meetings, members recommended the asset smoothing valuation method.
“The lack of a smoothing strategy causes very serious budget stability issues, especially in this highly volatile market,” the workgroup stated, noting that West Virginia is one of the only states in the country that doesn’t employ asset smoothing.
House Speaker Rick Thompson also extended praise to the Consolidated Public Retirement Board.
“The board acted wisely to address a problem that is not only negatively affecting cities and counties, but having an adverse effect on the state’s entire budget,” he said. “I am very pleased that members saw fit to make this change.”