Effective July 1, 2022
Now that the Pension Task Force’s plan is law, here are a few of the most significant ways the law changes or enhances members’ existing pension plan:
- Reduces the unfunded pension liability by $2 billion.
- Invests $37 million from the State annually into both the pension fund and retiree health care.
- Injects $75 million into the system immediately.
- Changes the way the COLA (Cost-Of-Living Adjustment) is calculated for employees who aren’t eligible to retire by July 1, 2022:
- COLA now begins 24 months after retirement.
- COLA now has a floor of 0% and a ceiling of 4%.
- Introduces progressive increases to employee contributions:
- Members with base salaries below the 25th percentile (under $50,000) see no change to the status quo.
- Members with base salaries between the 25th and up to the 50th percentile ($50,000 – $62,000) see 0.5%/year increases for 3 years.
- Members with base salaries above the 50th percentile and up to the 75th percentile ($62,000 – $75,000) see 0.5%/year increases for 4 years.
- Members with base salaries above the 75th percentile ($75,000 and up) see 0.5%/year increases for 5 years.
- Creates a new retirement Group G allowing full retirement at age 55 after at least 20 years of service. The contribution rate for this group is 11.33%.
- Group G includes:
- Facility employees of DOC;
- DOC employees who provide direct security and treatment services to offenders under supervision in the community; and
- Employees of VPCH and MTCR who provide direct patient care allowing for full retirement at age 55 after at least 20 years of service.
- Group G is:
- Voluntary for current employees; and
- Mandatory for new hires after July 1, 2023.
- Group G includes:
If you have any questions please contact your local worksite Steward, a VSEA Union Representative, or contact VSEA HQ: 802-223-5247 or email vsea@vsea.org.