CHARLESTON, W.Va. — New legislation cutting retirement benefits for public school and state employees hired on or after July 1 ultimately will save the state more than $53 million a year in pension costs, Consolidated Public Retirement Board executive director Jeff Fleck said Wednesday.
Signed into law April 3, the legislation (SB529) makes numerous cuts in pension benefits for new hires, including increasing the pension contribution for individuals in the Public Employees Retirement System from 4½ percent to 6 percent of salary. Fleck said that will eventually save the state $20.6 million a year once all public employees are in the new “Tier II” system.
It also changes the calculation for PERS pension benefits from the highest three years’ salary of the final 15 years of employment to the highest five of 15 years, which ultimately will reduce benefits by about $5 million a year, he said.
The legislation also requires new hires to purchase credit for military service, something that current PERS employees who served in the military during times of armed conflict receive without charge. That buy-in ultimately will save the state about $10 million a year, Fleck said.
“That puts us pretty much in line with what every other state does…