The Joint Legislative Audit and Review Committee (JLARC) 2008 study found that only four other States did not require state workers to contribute to their State government retirement plans. The study further explained that Maryland state workers pay 5% of their salary to their state pension plan and that North Carolina state workers pay 6% to their pension plan. The Director of the VRS Robert P. Schultz has stated that preliminary internal estimates suggest the system will need increased contributions of 4 to 6% of the current payroll to fund pension liabilities over the next 20 to 30 years to maintain the current level of benefits for future retirees. With the recent downturn for almost two years, the VRS has lost 21% of its value. The JLARC study recommends phasing in a 2% pretax salary contribution as employee pay increases to close the anticipated funding shortfall in the system. However, the study was based on figures collected before the collapse of the financial markets during which VRS lost 21% of its assets. (1)
Currently, the VRS total assets are $51.7 billion for 2008. The State contributed $2.148 billion in 2008 to the VRS. (2)
These facts are startling! Under the old Federal Government Civil Service Retirement System, as an employee you had to contribute 7% which matched the Federal Government’s contribution of 7%. This author does not know any other retirement system that does not have matching or similar employee contributions.
Isn’t it time for the Virginia State government employees to contribute to this system before it sinks instead of having Virginia taxpayers bail out this system eventually?
(1) The Richmond Times-Dispatch newspaper dated September 12, 2009 front page article titled, “State Might Ask Workers to Help Fund Retirement”.
(2) Virginia Retirement System – data obtained on 10/22/09.
Written by Charles McAndrew
FCTA Board Member
VRS Watch - RSS
Showing posts 1 - 5 of 9. View more »
FCTA News >