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Expanded military pension credits to be costly

CHARLESTON, W.Va. — It will cost West Virginia nearly $23 million a year to comply with a Supreme Court ruling to expand military service credits for public employees’ pension benefits, according to a report released Wednesday by the state Consolidated Public Retirement Board’s actuary.

In March, the state Supreme Court ruled that the retirement board had wrongly denied military service credit to many public employees by failing to give credit for armed conflicts not specifically cited in state law, including conflicts in El Salvador, Lebanon, Grenada, the Persian Gulf War and Somalia.

Two months later, the retirement board agreed to comply with the court’s decision and give up to five years credit toward pensions for public employees and retirees who had served in the military during those conflicts.

On Wednesday, actuary Harry Mandel told the board the additional pension benefits will create a $197.2 million unfunded liability in the Public Employees Retirement System, which will require employers to come up with an additional $22.8 million a year in premiums for 20 years.

“What you’re telling us is, the Supreme Court decision is going to increase the cost of employment benefits by 1.5 percent a year for 20 years,” said David Wyant, the retirement board’s chairman.

Mandel’s study projects that active state, county and municipal employees covered by PERS will be eligible for a total of $113.9 million in increased pension payments, while retirees will be entitled to about $43.6 million in increased pensions.

 Retirees will also receive a total of about $33.4 million in back payments to cover pension underpayments dating back to June 2000. Those retirees will also get about $6.3 million in interest payments, at a rate of 4 percent interest for the years their pensions were under-calculated…

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