CHARLESTON -- A long-discussed measure to help West Virginia cities shouldered with skyrocketing police and firefighter pension costs was signed into law Thursday by Gov. Joe Manchin.

The legislation, which takes effect Jan. 1, 2010, gives cities the option of closing their existing retirement plans to new hires and refinancing those plans over a 40-year period to pay off their unfunded liabilities.

New hires will be placed in a retirement plan that is similar to benefits offered to emergency medical services employees across the state. The plan will be administered by the Consolidated Public Retirement Board.

The Legislature approved the legislation during a special session last month.

"Many, many individuals worked to get this passed," Manchin said. "I said I would call a special session to address this pension issue if all sides could agree and come up with legislation that was fiscally responsible. And, with tireless efforts of (Sen. Dan Foster, D-Kanawha) and others, they did just that."

Huntington officials say the legislation is a critical tool in helping them turn around the city's finances.

More than 20 percent, or $8.8 million, of the city's $42 million budget is going to pension costs this year. Under the current funding method, those costs are scheduled to rise to $12.4 million a year by 2015 and not reach their ceiling until they hit approximately $21.2 million in 2023, according to an actuarial report prepared for Huntington earlier this year.

The amount of money Huntington will have to dedicate to pension costs under the new legislation will gradually decline, according to actuarial projections. For example, it will spend $395,000 less on pensions in 2011 than it is scheduled to pay under the current funding method. The following year, it will spend approximately $1 million less. By 2015, the difference will jump to $3.3 million.

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