Mar 12

Potential Changes for Our VRS

Just when legislation outlining VRS retirement options seemed on the verge of failure, new amendments appeared on the last day of the 2012 Session. After consulting with key Republican leaders from the House and Senate money committees, the Governor sent down revisions to VRS bills. Some Democrats objected that few members had seen the amendments prior to their submission on Saturday; however, a majority of legislators voted to go along with McDonnell’s proposals.
The amendments include language to (according to Sunday’s Richmond Times Dispatch)
•Require teachers and local government employees to pay 5 percent of their salary to retirement, while requiring localities to offset the contribution with raises;
•Create a mandatory retirement plan for most state and local employees hired after Jan. 1, 2014, that will combine reduced retirement benefits with a 401 (k) style contribution plan that the state will help fund (police, fire and other public-safety workers are exempt);
•Reduce existing retirement benefits, including a cap on cost-of-living adjustments, for state and local employees with less than five years of service; and
•Force the state to fund rates certified by the VRS Board of Trustees on a graduated scale over the three two-year budgets commencing July 1, 2014.

Current employees will be “totally protected” according to Senator Janet Howell. Additional changes to VRS may be included in the two-year budget, and alternative proposals from state and local employee associations, if submitted, may be considered during budget negotiations.

Legislators approved a return to the Capitol for a special budget session in the hopes that a more conciliatory atmosphere might prevail after a 10-day “cooling off” period.