Opinion ID: 1203735
Heading Depth: 2
Heading Rank: 1

Heading: Recent Underfunding

Text: Employees' contributions are automatically deducted from their paychecks. As a first step in the governmental funding process, the public employers' contributions, which have been earned for the trust through the employees' services, are actuarially determined, W.Va.Code § 5-10-31, and the Board of Trustees certifies this amount to the Governor, W.Va.Code § 5-10-32(a). The Governor then must include this amount in his appropriation bill as submitted to be considered by the Legislature. Id. [8] In fiscal year 1984-85, the PERS Trustees certified a need for $12,000,000 in the state division employers accumulation fund (EAF) to match the contributions of employees whose compensation is paid from the general revenue fund. The Governor included $12,561,966 in his budget request as the amount earned for the trust by State employees, and the Legislature appropriated that same amount. In fiscal year 1985-86, however, the Governor chose not to include the full $13,800,000 earned for the trust by State employees and certified to him by the Trustees, but instead again budgeted $12,561,966. The Legislature initially appropriated this amount, but, in February of that same fiscal year, House Bill 2000 transferred and expired [9] the $12,561,966 appropriation into the general revenue fund, along with certain employer contributions from special revenue funds, some of which apparently came from federal grants to state agencies. In fiscal year 1986-87, the Trustees certified a need for $16,203,000 which had been earned for the trust by State employees. The Governor again budgeted $12,561,966. This time the Legislature appropriated no money for the EAF, instead requiring that employer contributions from certain special revenue funds, including some federal funds, again be paid to the PERS Trustees, who would then transfer those funds to the general revenue fund. In addition, House Bill 1082 directed that the Department of Highways employer contributions usually transferred to [PERS] ... will be retained during fiscal year 1986-87 and expended for contract paving purposes. In fiscal year 1987-88, the Governor did not include in his budget request any of the $13,639,555 the employees had earned for the trust which had been certified by the PERS Trustees. The Legislature first appropriated $7,544,677 to the EAF, but then once more transferred and expired that sum in February of the same fiscal year to the general revenue fund. [10] In fiscal year 1988-89, the PERS Trustees certified that $14,250,000 had been earned for the trust, but neither the Governor nor the Legislature budgeted any money to the EAF. In addition, Senate Bill 5 directed that the employer contributions from all special revenue funds be paid into the general fund by the PERS Trustees. Finally, the budget bill directed that retiree insurance premiums made necessary by the provisions of West Virginia Code § 5-16-12 (Supp.1988) be paid from member employee contributions, accumulated reserves, or investment income. [11] The Respondent Trustees have, over the past four years, certified to the Governor a need for approximately fifty-five million dollars in general fund employer contributions which have not been deposited into the EAF. The amicus curiae brief estimates that between eighteen and twenty million dollars will be diverted from special revenue funds originally earmarked for the EAF in fiscal year 1988-89. An undetermined amount of special revenue employer contributions were diverted in fiscal years 1985-86 and 1986-87, in addition to the diversion of the Department of Highways pension contributions to contract paving in fiscal year 1986-87. The amicus union estimates that the EAF has been underfunded by some eighty million dollars.