Business, Government Legal News from throughout WVBill to reduce judges’ pension payments pending before WV Senate committee

A bill pending before the state's Senate Finance Committee could reduce the amount judges pay into the judicial retirement system.

However, some judges wonder if the reduction in pension payments will be enough.

Some of the state's judges take issue with two facets of the current retirement system. Judges are concerned about an increased pension payment for an unfunded liability that no longer exists and others are concerned about the two-tier system itself.

The judicial retirement system currently is over-funded at 130.3 percent. State Supreme Court Administrative Director Steve Canterbury explained the current over-funding resulted from a 2005 fix. At that time, the judicial retirement system's unfunded liability was at 50 percent, Canterbury said.

"We did very well -- better than we ever anticipated," he said. "But had investments not panned out, that 130.3 percent could have been around 90 percent or somewhere down there. We did what we thought we needed to do to make sure it was fully funded. There was no mischief. It was just what we thought was good government."

There were two parts to the solution. First, judges' pension payments would increase to 10.5 percent. The second part of the fix was to split the system in two.

The first tier, or the older system, consists of judges who came to the bench before 2005. Tier two consists of newer judges.

Those in the first tier would receive increases in their retirement pay when the Legislature increases judges' salaries. Second tier judges would receive a flat 75 percent regardless of a legislative increase in judges' salary. Much debate has surrounded whether judges should receive what lawmakers have dubbed "the bump."

The bill before lawmakers aims reduce this payment starting July 1. Pension payments could range between 7 percent and 10.5 percent. Yet, it is unknown if this bill will be taken up, Canterbury said.

 "Even if they get everything they asked for, it will still be at 127 percent over funded," Canterbury said. "Judges were asked to do their part and the interest rate was raised to 10.5 percent. Now, it is funded more than it needs to be and it's time to take the extra weight off their shoulders."

Debate has surrounded the two-tier system and some newer judges have expressed concerns of unfair treatment, Canterbury said.

"The problem we're facing is that judges who have come on since 2005 don't see any advantage to joining the retirement system," Canterbury said. "They're not getting the full benefit that older judges get. It's not equitable."

The original bill aimed to eliminate the second tier. However, the Senate Pension Committee voted to keep the system intact.

Raleigh County Circuit Judge John Hutchison, who recently spoke before members of the Senate Judiciary Committee, said the bill is not as broad as originally hoped.

"Judges are not happy with the fact that Senate Pensions has removed some parts of it," Hutchison said in a recent telephone interview. "Having said that, they understand politics and are willing to move forward. They want to get some relief on the high pension contribution."

According to Hutchison's data, there were 53 active participants in the judicial retirement system as of July 2010. Out of that number, there were 18 people in the second tier and another 18 who were eligible to pay into the system.

Right now, Hutchison said, there are 57 people in the first tier, four in the second tier and 14 eligible to get into the new system.

 "It's not a big group," Hutchison said. "The Legislature tries to compare us to teachers and public employees but they're so much larger than what we have. They're really not comparing apples to apples."

Hutchison said many judges worry that newer people will opt in another retirement program to pay less instead of enrolling in the second tier.

"I am concerned that we're running a risk of a lot of people not opting to pay the extra premiums to get into the judicial system and are going to opt to stay in another one because they don't get the additional benefit," he said.

Although lawmakers voted to keep the system intact as opposed to eliminating the second tier, Hutchison said many judges hope lawmakers will address this issue in future sessions.

 "If we're going to keep good judges and get those coming out of private practice making decent money to come on the bench, there needs to be recognition of what they're giving up," he said. "You don't come on the bench to be a judge for a few years. That normally doesn't happen. You have to make a commitment to being a judge. Right now at least, we are trying to get the contribution rate down and get more equitable across the board.