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VSEA Executive Director, Steve Howard, shares another legislative update from the Vermont State House. VSEA is encouraging members to continue calling the Governor at (802) 828-3333, or e-mailing him using this link! Tell him you want him to support both the pension bill and the State budget. A deal is a deal.

VSEA Executive Director, Steve Howard, shares this week’s legislative update from the Vermont State House. VSEA is encouraging members to continue calling the Governor at (802) 828-3333, or e-mailing him using this link! Tell him you want him to support both the pension bill and the State budget. A deal is a deal.

VSEA members and retirees are cheering today’s loud “yea” voice vote by House members to pass the Task Force’s Pension Proposal. Today’s vote comes after the bill’s third reading and follows yesterday’s 144-0 vote to pass the bill on its second reading. The bill now moves back to the Senate to “concur” and once that happens (which is expected) it will be sent to the Governor for his signature, veto or silence (which would mean passage).

“I was very pleased to see S. 286 get voted out of the House today,” says VSEA President Aimee Towne. “It has been a long year-and-a-half defense of our defined benefit plan, and I applaud the way VSEA members and retirees have engaged in this fight at every level. It’s why we are where we are today.” She continues, “It is heartening to see such strong tri-partisan support for the Task Force proposal. Now, given these pretty clear, one-sided votes, I trust Governor Scott will now end his veto threat and sign this important legislation.”

Towne adds, “I want to extend a tremendous amount of gratitude to those who participated in the Task Force work for all these months.”

In July 2021, VSEA posted a new study from Charles Schwab that found that more and more retired Americans with a defined contribution plan (401k) are needing help with investing. Why? Because with a 401k plan, the onus is primarily on the retiree to make sound investments—and, in far too many cases, retirees do not have the knowledge or resources necessary to keep their 401k afloat. 

Other findings from the study drive home the very valid point that 401k’s requirement for the retiree to be their own investment advisor can end in a bad way for the retiree: 

• More than ever before, it seems, American workers are looking for and are receptive to receiving retirement planning advice;
  
• More than six in 10 participants (61%) believe their financial situation warrants professional advice, an increase compared with 2020 (50%). Forty-four percent want help calculating how much to save for retirement. And thirty-nine percent want specific advice on how to invest in their 401(k)s;
  
• Thirty fine percent want help figuring out an income stream at retirement, and thirty-three percent want help determining the best age to retire. Twenty-two percent, each, want help with figuring out how to catch up to their retirement savings goals and managing their expenses so that they can save more for retirement;
  
• Forty percent said they are confident in making financial decisions on their own—but fifty-six percent want professional help;
  
• More than half (51%) say they are willing to spend time planning for retirement but don’t know where to start. Sixty-two percent wish they could completely hand over retirement planning to an expert; and
  
• Three-quarters of participants report they want help with contribution advice and fifty-three percent want help with selecting investments. Eighty-five percent indicate they want help with post-retirement income.

Governor Scott now says he wants to provide new state employees with an option to join a defined contribution (DC) pension plan (a.k.a. 401K) versus enrolling in the much-favored defined benefit pension plan. While this is a good soundbite, do employees really want to be able to choose? Good question.

The last time the “let’s give employees a choice” idea looked to have any legs was 2018, and VSEA asked the State to see how many exempt employees have opted to join the DC Plan since the choice was first granted to the class in 2011.

Here are the yearly percentages…