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Another Budget Casualty: Virginia's Pension System

by: Elaine in Roanoke

Tue Mar 16, 2010 at 19:12:51 PM EDT

The budget passed by the General Assembly for the next biennium not only screws over the poor, the children and the sick. It also will not pay more than $620 million that should be paid by the state into the Virginia Retirement System (VRS). Legislators did say that they will pay the money back with interest over the next decade. Even so, they compounded the shortfall to the state pension system by giving authority to localities to postpone or eliminate their payments into VRS.

Believe me, this situation won't sit well with the people who determine Virginia's bond rating. We may well be kissing that triple-A bond rating goodbye.

For several decades, there have been those in Richmond who have wanted to water down state employee and teacher retirement benefits. Now, the recession has given them a way to do what they wanted all along. I don't have any complaint with efforts to make sure the pension system is viable for future retirees. My gripe is when a few guys get in a back room in Richmond and basically decide what will be done with the retirement of state and local employees and teachers.

Just think. State support of K-12 education has dropped to the level it was four years ago. Medicaid, already one of the stingiest programs in the nation, has been hit hard again, and now the pension system is being used as a bank by the legislators. And, why?  

Elaine in Roanoke :: Another Budget Casualty: Virginia's Pension System
Is it more important to insure that billionaires like the heirs of the Mars family won't have to pay an estate tax? Is a two-year, one-percent increase in the state income tax so evil that avoiding it justifies gutting services for the poor and sick and endangering public education?

And, now, we are going to have the creation of two classes of public employees, those now working vs the newly hired. They may be doing the same job but they won't have the same compensation.

New hires will be required to pay the five percent of salary into VRS that is now paid by the state. They also will not be able to retire as early as those now employed. They will receive a smaller pension for the same amount of work. That ought to do wonders for morale and teamwork!

Many years ago, Owen Pickett of Virginia Beach, who resigned from the General Assembly in 1986 to run for Congress, wanted to cut the benefits paid to retirees in VRS. He didn't get his way back then, but this "Great Recession" has given those now in the General Assembly who think like him their chance to do the same thing.

House Appropriations Committee Chairman Lacey Putney (I-Bedford) pushed for and got changes to raise retirement ages and lower benefits for future employees.

Localities, as well, are being given "an offer they can't refuse." They can fail to provide their contribution to the VRS while also making their employees pay 5 percent of their salaries into the retirement system.

I remember when my school division's employees first got the benefit of having the locality pay our 5 percent contribution into VRS. At the time, I distrusted the whole thing, saying it would allow the legislators to say that we had no say in our own retirement fund because we didn't pay into it. It took quite a while to get to that point, but here we are.

The local and state payment was done as the last severe recession was ending in the early 1980's.  We teachers had not gotten a raise for at least two years. Because localities and the state  wouldn't have to pay Social Security taxes and other fees associated with a raise if it took over our VRS payment, that became our "raise" that year. I believe it was 1983.

This upcoming year that piper must be paid. Local employees who haven't had a raise in several years will now face a 5% decrease in salary masked as a contribution to VRS. On the state level, the cut in pay and the lowering of pension benefits is reserved for new hires.

I won't be affected. I am presently drawing my VRS pension. However, the two-tier system that Lacey Putney concocted in Richmond is a disgrace. How can anyone say that we treat people equally in this Commonwealth when those who are hired in the future get a pension that is lower than those of us who did the very same job? We can't.

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and how many state workers were there on lobby day to protest this? Zero. How many state workers even know or understand this? Close to zero I'd say. Why aren't state workers unionized to fight this stuff? Apathy.

As a former state worker I saw this coming years ago. Supposedly the state will pay back the pension fund in 2 years with interest.

State workers are always hit hard because they don't fight back.

This folks, is just the beginning of the bringing down of our state.

Can't Unionize
In Virginia, employees of local or state government can't bargain collectively, strike, or take collective action. Against state law. So, while the teachers, state employees, firefighters, etc., may have "associations," they can't exert typical forms of pressure against government.

[ Parent ]
this is a classic
when there is a major earthquake you focus on all the people trapped in buildings.  not the ones going to die in car crashes in a month.

there are so many things wrong in Richmond how can one choose?  

this was not on the radar in PWC due to the focus on losing 700 jobs in the school system.

i bet the teachers are glad they endorsed Jackson Miller.  got their money's worth on that leap.

i'm retired too and get VRS, but the issue is this whole 'kicking the can down the road' mentality.  this is exactly what the flat earthers whine about - unfunded mandates, and yet they all vote to do the same thing.  where's the outrage Bob Marshall???

when Christie Whitman started raping the Jersey pension funds only a few faint alarm bells were sounded.  now they currently have $45 Billion unfunded liabilities.

the next 4 years are going to be a great ride - and they said we'd have nothing to talk about when the village idiot from Crawford TX left town ;-)

bruce roemmelt

state employees
I also receive a VRS pension. I was a long time member of the VEA and NEA. Teachers cannot unionize in VA it is against the law. The reason teachers weren't in Richmond is because they were teaching your children. The VEA was aware of what was going on for sure!
Lacey Putney is a dinosaur. He represents part of the county where I taught. The teachers there asked him NOT to support this legislation but his loyalties don't lie w/ the teachers at all.He has an I beside his name but we all know he is an R through and through.

[ Parent ]
Old Byrd Machine
Yeah, Lacey is a remnant of that old Byrd machine. You know, the people who were good "Democrats" as long as segregation was alive and well, as long as Virginia was run as a conservative stronghold for the monied elite.

With the civil rights bills and the destruction of the Byrd machine power by, irony of ironies, the "mountain Republicans," Lacey and his ilk either became born-again GOPers or "Independents."

Virginia once had a pension system that was as sound as any in the nation. After the VRS board began to allow investment in riskier things like the stock market - and God only knows what else - our pension system slipped to being ranked in the middle among the states.

Who knows what will happen to the viability of it if the GOPers stay in power? As I look down the road, I find it hard to see a change in the power structure in Richmond, barring some severe setback for the GOP. When a nutcake like Ken Cuccinelli can get elected handily, it's hard to see change readily.

I, too, was a long-time member of the VEA/NEA. Unfortunately, it seemed to me that somewhere along the way to the 21st century the VEA lost its ability to be active in grassroots politics, and my fellow teachers became harder and harder to organize. The days of local association phone banks and letter campaigns disappeared. So did effective teacher PACs.

I realize that Rob Jones is down their with a couple of helpers lobbying, but he sure can't compete with the guys offering piles of campaign contributions. They get the "access." The rest of us get the shaft.  

[ Parent ]
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