Pension experiment went badly for W.Va.

Despite Newsday's avalanche of discussions about public employee pensions ["Big pension bills to pay," Editorial, March 13], there has been no mention of West Virginia's 14-year experiment with "reform": a 401(k) (defined contribution) type public employee pension plan.

In 1991, West Virginia closed its traditional defined benefit pension plan to new school employees, replacing it with a defined contribution program.

In 2005, West Virginia scrapped the 401(k) type plan, and returned all of the new plan participants back into the old defined-benefit system. The 401(k) type pension system experiment had been an abject failure for both the school employees and the state. Furthermore, the elimination of new employees' contributions from the old system also did considerable harm to the ability of the traditional system to maintain its funding.

Not only was the individual pension accumulation so meager that almost no one would have been able to retire, the 401(k) plan actually increased pension expenditures for the state. Anne Lambright, executive director of the West Virginia Consolidated Public Retirement Board, told the National Conference of State Legislatures, "It was clear that the defined contribution plan had not saved the state money." The system created an incentive for the most highly paid employees in a school district to continue on the payroll, which is funded primarily by property tax.

At the same time that West Virginia was "reforming" its pension system, New York State was decreasing its pension contributions to almost zero in 2002. This was almost universally ignored by the media. After all, why would the media want to comment on the savings of hundreds of millions of tax dollars?

The West Virginia plan produced a perfect storm: worthless pensions at no savings to the state.

Lynn Costello

Blue Point

Editor's note: The writer is a retired president of the East Islip Teachers Association.