Friday, January 22, 2010
Va. workers may soon pay into pension
A bill in the House would make sweeping changes to the state's retirement system.
General Assembly 2011
Among the major issues: The state's continuing efforts to provide services with fewer dollars and Gov. McDonnell's plan to privatize liquor stores. Session ends Feb. 26.
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Several influential legislators want to make major changes to the state's pension system.
Perhaps the highest-profile effort is sponsored by Del. Lacey Putney, I-Bedford, the chairman of the House Appropriations Committee. His bill would require new state and local employees to pay 5 percent of their salaries toward retirement benefits. State employees, teachers and most local government workers have paid nothing toward those benefits since 1983.
The bill also would reduce the cost-of-living adjustment for new employees, reduce a pension multiplier used to calculate retirement pay and change the minimum age and service requirements for retirement. All of that would go a long way toward scaling back the generosity of the Virginia Retirement System.
State and local officials are worried about the long-term health of the pension program, which sustained enough investment losses that Virginia may have to inject nearly $400 million into the system over the next two years. Payments toward the retirement system are also on the rise for larger localities such as Virginia Beach and Chesapeake.
The bill, which is co-sponsored by House Appropriations Committee members Del. Chris Jones, R-Suffolk, and Del. Johnny Joannou, D-Portsmouth, would not affect current employees.
One lobbyist for state workers said he supports the bill. But other representatives for employees worry that the changes go too far and would weaken a needed benefit and recruiting tool to attract talented professionals to lower-paying government jobs.
"We are working tirelessly to resist any changes to VRS that would negatively impact our members," said Virginia Education Association President Kitty Boitnott.
A spokesman for Gov. Bob McDonnell said the governor's policy staff is reviewing the proposal.
"The governor does not support requiring current state employees to contribute to their pensions," said Tucker Martin, a spokesman for Gov. Bob McDonnell. "However, he has previously stated that the commonwealth may need to change the system with regards to future state employees."
