An editorial from The Exponent Telegram
CLARKSBURG, W.Va. — You have to give Clarksburg credit.
City leaders have increased payments to their police and fire pension plans. But the retirement programs are still woefully short of being even close to fully funded.
Despite plans to contribute $860,386 to the police fund and $867,454 to the fire fund, the programs will be roughly 85 percent underfunded. And that’s despite the fact the city has increased payments into the programs by nearly $1 million over the past decade.
But Clarksburg isn’t alone in its underfunded pension liabilities. A recent study by The State Journal found that of the state’s largest 15 cities, only Vienna and Beckley were close to being fully funded, Vienna at 57 percent and Beckley at 50.
The rest are dramatically lower, with seven funded at less than 20 percent and four others at less than 30.
There are several reasons why these types of pension plans are underfunded.
The plans pay a defined benefit based on the person’s pay while they were working, as well as what the fund was projected to accrue in terms of interest.
If the plan didn’t perform as well as expected in the stock market, funds could be affected.
The plans often include an early retirement age. These types of perks were often tradeoffs for less pay starting out. But as was the case with other state retirement programs, it becomes a situation of “pay me now, or pay me more later,” passing the financial problems to the next generation…