Only about a few weeks ago, many public officials in West Virginia were deeply concerned about something called "OPEB." Now, the attitude may well be one of hey, no worries.
OPEB stands for other post-employment benefits for retired government workers. For the past couple of years, officials at both the local and state government levels in West Virginia have been unable to come up with a solution to the problem of a massive unfunded liability for the program. As much as $10 billion in benefits may have been promised without assurances money would be available to pay for them during coming decades, it was explained.
Then, last week, officials at the state Public Employees Insurance Agency approved a cap on growth in the cost to West Virginia taxpayers of benefits for retired public-sector workers. State subsidies for the benefits, primarily health insurance, will not be allowed to grow more than 3 percent annually. Retirees will be responsible for any excess growth in costs.
At first, some legislators said that still left $5 billion in unfunded liabilities to address. But after the PEIA action, it was revealed that may or may not be the case. Before the agency's finance board voted on the change, PEIA Executive Director Ted Cheatham explained it to them. "Under this solution, at the way you're currently structured, OPEB for the state of West Virginia will be fully funded in the year 2040, without us even putting any more money in the pot," Cheatham said.
In other words, legislators may not have to come up with a new funding stream to cover OPEB, if they are willing to wait until 2040 for current PEIA policies to eliminate the problem.
The temptation to just let the OPEB problem take care of itself will be great.
But legislators and Gov. Earl Ray Tomblin surely have enough experience with finances to understand a lot can change in 28 years. They should continue looking for funding to pay down the OPEB liability. Better safe than sorry in terms of unfunded liabilities, after all.