Summary Of Recommendations Of The Pension Design & Benefits Taskforce

January 10, 2022

We are sending you this summary of the recommendation of the Pension Design Benefits Task Force. We hope you will find this helpful in understanding the agreement that we have reached with legislative leaders to strengthen our pension system and support retirement security for members of the VSEA. If you have any questions, please feel free to contact us at the number or emails provided.

Comparison Of Pension Proposals For Retirement Group F

This is a summary of the recommendations adopted this afternoon by the members of the Pension Design & Benefits Taskforce.

This agreement creates a reduction in unfunded liability for VSERS by $1.025 billion according to the Joint Fiscal Office.

Maintains a Defined Benefit Plan. There are no changes to current retirees.

Legislative Funding

  • $22 million dollars annually invested in pre-funding Retired State Employees Health Care which is now pay-as-you-go.
  • $52.4 million dollars in one time money will be invested into the fund for Retired Employees Health Care with FY21 surplus money.
  • $75 million dollars one investment in VSERS
  • $15 million annual contribution above the ADEC or the contribution required by the actuaries until the fund reaches 90% funding level.
  • Apply 25% of any end-of-the-year surpluses to VSERS

Group F COLA Changes

Exemption from these changes for those state employees who are eligible to retire as of July1, 2022

  1. The current COLA floor is 1%. When the CPI falls below 1% then the COLA will be 0%.
  2. The current COLA has a ceiling of 5%. The new ceiling will be 4%
  3. The current system requires you are retired for 12 months before you receive a COLA. The proposal will now require you are retired 24 months before a COLA begins.

Group F Employee Contribution Increase

Effective in fiscal year 2023

  1. 0-24 percentile no change
  2. 25-49th percentile 0.5% per year for 3 years.
  3. 50-74th percentile, 0.5% increase for 4 years
  4. 75th plus percentile 0.5% for 5 years.

Group C COLA Changes

  1. The current COLA has ceiling of 5% of CPI, the new ceiling will be 4%
  2. The current system requires you are retired 12 months before receiving the first retirement COLA in January. The proposal will now require you are retired 24 months before receiving the first retirement COLA.

Group C Contribution Increase

The current rate of 8.55% will increase 0.5%/ year for 3 years

Group C Longevity Incentive

The mandatory retirement age will increase from 55 to 57 years old. Members of Group C will receive a 1.5% increase in the calculation of their AFC for each year worked past age 50 and completing 20 years of service, to a maximum age of 57.

Group F Longevity Incentive

The parties have until April 15th to work on a proposal to provide incentives to state employees who are eligible to retire to continue state service that has no negative impact of the financial position of the retirement system.

Group G

The parties have until April 15th to submit a proposal that is cost neutral to the retirement system, if that standard can be met, the legislature will add the proposal to the bill.

In Solidarity,

Leona Watt
802-885-8994
leonawatt@yahoo.com

Eric Davis
802-448-2049
ericpauldavis@gmail.com

See Also: Protect Our Pensions! Online Hub

Questions About This Page?

Please email vsea@vsea.org.