Capitalism is alive and well at the state Capitol and earning billions of dollars for state government and earning the gratitude of taxpayers.
Last year, the West Virginia Investment Management Board earned a rate of return on investments for the state's pension funds of 12.8 percent in the year ending June 30.
This boosted the 10-year average to 7.5 percent for all the pension funds except the Teachers Retirement System, which averaged 7.2 percent.
This performance comes despite a sluggish economy over the last five years. This reflects on the faith in capitalism by officials in a state not known for being business friendly.
In 1997, state officials promised a high rate of return and voters responded by overwhelmingly approving an amendment to the state constitution
allowing for the investment in equities.
At the time, the state had $2.7 billion in pension funds.
Sixteen years later, the state has quadrupled that to roughly $11.5 billion. Not all of that increase is due to investments as the state has added its contributions to these funds, especially the beleaguered and underfunded Teachers Retirement System.
But certainly this is one case where political promises were kept.
The U.S. stock market had a very good year, according to Kristy Watson, chief investment officer for the Investment Management Board.
"Importantly, the pension plans' 10-year average annual return is approximately 7.5 percent — right on target with the assumed actuarial return used for those plans by the Consolidated Public Retirement Board in achieving funded status," Watson told Phil Kabler of the Gazette.
Without such growth, state taxpayers would have to pay more into the retirement funds for public employees. That would mean either a tax hike, a cut in services or both.
The 2012-2013 performance is a marked contrast to past mismanagement of the state's funds. Ten years before voters approved stock investments, the state lost $279 million in a convoluted bond transaction in 1987. Bonds were supposed to be safer than stocks.
The news from the investment board is reassuring.