by Brian Hill
Capital News Service
Virginia teachers and firefighters are urging Gov. Bob McDonnell to veto legislation overhauling the retirement plan for the state’s public employees.
They said the General Assembly acted hastily on the last day of its regular session when it approved bills to reduce the benefits that employees would receive under the
Virginia Retirement System. The VRS legislation was crafted by a conference committee and was passed on split votes in the House and Senate.
“The General Assembly voted without a clear understanding of the ways that the conference report would cut into the pay and erode the retirement security of our employees,” said Kitty Boitnott, president of the Virginia Education Association, that represents the state’s teachers.
Teachers say they are spending their own money on classroom supplies as local school budgets have been cut in recent years.
“The General Assembly has responded by failing, since 2008, to fund a pay raise for teachers and rushing to pass a flawed pension bill that takes money right out of teachers’ pockets,” Boitnott said.
The VRS changes are contained in two identical measures approved by the assembly on March 10: House Bill 1130, sponsored by House Speaker William J. Howell of Fredericksburg; and Senate Bill 498, proposed by a fellow Republican, Sen. John Watkins of Midlothian.
The bills would create a hybrid retirement program containing a defined contribution and a defined benefit component. State and local government employees hired on or after Jan. 1, 2014, would be required to participate in the hybrid program.
The legislation also would adjust the existing defined benefit plan for nonvested employees. It would lower the retirement benefit multiplier from 1.7 to 1.65, basing average final compensation on 60 months of service. The bills also would cap the cost-of-living adjustment at three percent.
Advocates for public employees held a press conference Thursday to express their concerns about the legislation. They urged McDonnell to reject the bills.
The conference committee report on SB 498 was approved by votes of 35-5 in the Senate and 58-35 in the House. The conference committee report on HB 1130 passed 34-6 in the Senate and 60-34 in the House.
Lawmakers adopted the legislation in hopes of plugging a projected $24 billion gap in the VRS. But public employees said the state should shore up the retirement system without penalizing workers and retirees.
“The challenges facing VRS are quite simply to fund the system, in both good times and tough times,” said Michael Mohler, president of Virginia Professional Firefighters.
“That’s what we as families do. That’s what the Commonwealth of Virginia must do.”
Mohler contended that some legislators’ hidden agenda is to eliminate the VRS entirely.
“The fact is, those in the assembly calling for further cuts to VRS are not interested in fixing the pension system; they want to kill it all together,” Mohler said.
“They want to give our retirement plans to Wall Street, who will make billions and trillions on the fees that they will be able to charge each and every one of us individually, so that they can bleed us to death with those fees.”
Besides overhauling the retirement plan, the General Assembly passed legislation requiring local government employees and school board employers to pay a five percent employee contribution to the VRS. Under this legislation – SB 497 and HB 1129 – local governments and school divisions would have to raise their workers’ salaries to offset the higher contributions.
At the news conference, government workers urged McDonnell to sign that legislation.
“We call on the governor to protect the salary offset contained in SB 497, which would at least reduce the severe impact of pension changes on hard-working teachers,” Boitnott said.
Raises are critical to attracting high-quality instructors, teachers said.
“Virginia’s average teacher salary is over $7,000 below the national average,” said Bea Morris, legislative chairperson of the Virginia Retired Teachers Association. “To further reduce salaries will demoralize teachers even more and make it that much harder to attract the best and brightest teachers to Virginia’s classrooms.”