Statehouse Beat: Veterans’ benefits decision could be costly
what didn’t generate a lot of media coverage, but last Friday’s Supreme Court decision that military service credit for state retirement programs applies to service in all armed conflicts, and not just those spelled out in state code, is sending shockwaves through the Capitol.
As frequently happens with the Department of Administration, a call to Consolidated Public Retirement Board executive director Jeff Fleck was returned by spokeswoman-extraordinaire Diane Holley Brown, who said CPRB is trying to crunch the numbers on the fiscal impact of the ruling, and hope to have figures by the board’s April 16 meeting — which she said may or may not be discussed in public.
This much we know: As former CPRB executive director Betty Ireland put it, it’s a boatload of money.
In recent years, when legislation has been introduced to expand eligibility for the service credit (including SB275 this session, sponsored by Sen. Sam Cann, D-Harrison), CPRB actuary Harry Mandel hasn’t even broached a number, but has simply stated such proposals would violate the 2005 Pension Reform Act, which prohibits any increases in pension benefits if the Public Employees Retirement System is less than 85 percent funded — or if the benefit would knock it below that level.
However, in a 2006 fiscal note for a similar bill, Mandel indicated that expanding the credit to cover all armed conflicts would cost about $42.5 million a year in increased pension benefits, and create an unfunded liability of about $236 million.
In 2009, Mandel told a legislative committee that another proposal to scrap the armed conflict requirement and give veterans up to five years’ credit on their pensions for any active duty military service would create a $379 million unfunded liability.
Meanwhile, that doesn’t count the impact on the Public Employees Insurance Agency, since public employees hired before 2001 upon retirement can convert unused sick leave to either additional service credit for their pensions, or into free PEIA coverage.
Veterans who will pick up years of additional service credit via the Supreme Court decision may be more likely to opt for free PEIA benefits when retirement comes.
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While the Supreme Court decision may be costly to the state, as a fairness issue, it’s spot-on.
The current law is a hodgepodge, and there’s no logical reason why someone who served in the Persian Gulf War gets service credit, while someone who served in Afghanistan or Iraq may not, simply because the Legislature has failed to update its list of “approved” conflicts, which still includes the Boxer Rebellion and the Spanish-American War.
If the Legislature believes it is good public policy to give public employees credit for time served in the military during armed conflicts, it’s not fair to pick which conflicts count and which ones don’t.
The Supreme Court decision should be something of a vindication for former Administration Secretary Robert Ferguson, who was forced to resign over controversy that his efforts to resolve the discrepancies in the military service credits would benefit his own state pension. (Before coming to state government, Ferguson served 21 years in the Marines.)
Never mind that he had been instructed by then-Gov. Joe Manchin to resolve the service credit issue, or that he has said he intended to give any resulting increase in his state pension to charity.
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Following up on the seemingly exorbitant salaries paid to Citizens Conservation Corps of West Virginia executive director Robert Martin ($248,330) and chief operating officer Jennifer Douglas ($107,500), I finally reached CCCWV board president Pat Pinnell.
Pinnell, who lives in Callaway, Md., confirmed that the board of directors approves all executive salaries, and said none of Martin’s salary comes from the state Courtesy Patrol. (Although state funds account for some 80 percent of CCCWV’s operating budget, with Courtesy Patrol being the primary source of state funds.)
Pinnell said Martin’s salary is not out of line with executive salaries for comparable nonprofit organizations, adding, “The salary becomes a personnel issue. We don’t discuss salaries too much.”
She added, “I know people look at salaries and that kind of thing, but when you look at the impact of what CCC is doing in West Virginia ... I could go on and on about the things we do.”
Pinnell also said the Courtesy Patrol remains a vital program, even in an era when cellphones are ubiquitous.
“I think West Virginia is getting a bang for its buck out of the program,” she said. “It has been a program that has been successful getting people off welfare rolls and getting back into society.”
While there are other services out there to assist stranded drivers, Pinnell said not everyone can afford a AAA membership.
“We’re here, and can come to you usually within 15 minutes of a breakdown,” she said.
Courtesy Patrol funding will be one of the issues for the May special session of the Legislature.
Reach Phil Kabler at email@example.com or 304-348-1220.