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Nothing is a \u201csure thing\u201d these days, including public pensions, which, for the most part, have been considered pretty secure in the past.\u00a0 The economic downturn has affected all areas of the economy, and states are beginning to look at ways to reduce debt and continue to fulfill their obligations \u2013 in ways that reflect the economy of the day.\u00a0 With layoffs and a \u201chold\u201d in many areas on hiring, public school employee membership has been steadily decreasing, and the retirement system\u2019s unfunded long-term liability, which exceeded $20 billion on June 30, includes $12 billion for the public school member plan.\u00a0 The General Assembly voted to defer a $620 million general fund contribution to VRS last year in order to help balance the state\u2019s budget.The legislature has traditionally funded VRS at rates on an average of 10% below recommended rates; in fact, state politicians have done so in 17 of the past 20 years. The General Assembly may consider some type of defined contribution plan and increased member contributions this year.\u00a0<\/p>\n
\u00a0The VRS certified rates this week that would require government employers to contribute more than double the percentage of payroll that they currently pay to pension funds.\u00a0 For public school members, the VRS adopted a rate of 16.77 percent of pay, or 10.4 percentage points higher than the rate in this year’s budget.\u00a0 Localities will pay about two-thirds of the cost of higher rates, representing as much as a 30% increase from current levels.<\/p>\n
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Sources:\u00a0 VEA Press Release, October 20, 2011; Times Dispatch Article, October 21, 2011; VRS Staff Presentation, October 12, 2011\u00a0<\/p>\n
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<\/p>\n","protected":false},"excerpt":{"rendered":"
Nothing is a \u201csure thing\u201d these days, including public pensions, which, for the most part, have been considered pretty secure in the past.\u00a0 The economic downturn has affected all areas of the economy, and states are beginning to look at ways to reduce debt and continue to fulfill their obligations \u2013 in ways that … <\/p>\n