It happened back when the newer teacher retirement system, the defined contribution plan, was formed.
“They lead these teachers to believe that (A) they were from the state, they weren’t private and they told them the (old) system was going bankrupt and if they did not get out of the system they were in, they would have no money in retirement,” says Attorney Rusty Webb who was a guest on Monday’s MetroNews Talkline.
The lawsuit was filed last month in Marshall County. Webb is seeking class action status.
VALIC was one of five companies selected to offer those teachers and school service workers a 401-K style plan.
The switch happened back in the early 1990s and many of those teachers and school service workers have only now had the opportunity to return to an older teacher retirement plan, the defined benefit plan. More than 78% of those affected workers recently voted to make the switch.
West Virginia Federation of Teachers President Judy Hale says VALIC hired former principals and state school workers to push their retirement plan using date from the state.
“It was as if the state had given their stamp of approval on VALIC, on that company,” says Hale.