Thursday, February 9, 2012

Contract and Retirement Bills Reported

There was no shortage of drama this morning as the Senate Committee on Education and Health considered the Governor's legislation to eliminate continuing contract. SVEA member and student in the VCU teacher preparation program, Blossom Hargrove warned the committee that passage of SB 438 would hamper Virginia's efforts to recruit teachers in the future.

VEA's testimony centered on the fact that Virginia will need to hire 8,694 teachers each year, and that Virginia's teacher preparation programs are only producing 3,247 teachers per year. Why will promising young teachers want to move to Virginia when they know our salary is 12% below the national average, our class sizes are among the largest in the nation, our retirement benefits are being downgraded, and if this bill passes we will be the only state of all our neighboring states that does not have a fair dismissal policy.

When the vote on the bill was taken, it failed to report on a 6-9 vote. Republicans Newman and Blevins voted with the 7 Democrats. Newman voted against so that he could later move reconsideration as he voted on the "prevailing side." Some time passed. Blevins was called out of the room, and when he came back Newman moved to reconsider. This time the vote as 8-7 to report the bill - a party-line vote. Blevins had changed his vote.

YEAS--Martin, Newman, Blevins, Smith, McWaters, Black, Carrico, Garrett--8.

NAYS--Saslaw, Lucas, Howell, Locke, Barker, Northam, Miller, J.C.--7.
The bill now goes to the Senate floor - where we have our last chance to kill it.

Please click here to write your Delegate and Senator urging opposition to SB 438 and HB 576.

On the retirement front, a special subcommittee of the Senate Finance Committee passes two retirement bills carried by Senator John Watkins, SB 497 and 498.

SB 497 requires your school board to require you to pay the 5% employee contribution to VRS. It can be phased in 1% at a time. Senator Janet Howell offered an amendment to require off-setting salary increases. The amended form of the bill was reported by the subcommittee.

SB 498 creates a new hybrid retirement system for those hired after January 1, 2014. Here is an outline of the plan:

Provides a guaranteed retirement benefit.
–1% multiplier = 30% of AFC after 30 years.
–4% employee contribution with the remainder contributed by the employer.
–Allows continued amortization of the current Unfunded Liability.

•The Contribution (DC) component.
–Employee: Mandatory contribution of 1% with up to 4% additional.
(Maximum = 1% +4% = 5%)
–Employer: Mandatory match of 1% and 50% of the next 3% additional up to a total of 2.5%. (Max = 1%+1%+1.5%=3.5%).
–Automatic contribution escalator with employee opt-out feature.
–Multiple VRS-sponsored investment options.
•Disability Coverage.
–Continue VSDP for state employees.
–Extend VSDP for to local employees and teachers.

The Compensation and Retirement Subcommittee of House Appropriations considered Speaker Howell’s VRS bill, HB 1129. This bill grandfathers all who are within five years of retiring. For all others this bill reduces the multiplier from 1.7 to 1.6. It bases the final average salary (AFC) calculation by considering the highest 60 months rather than the highest 36 months, and it caps the cost of living allowance (COLA) at 3% rather than the current 5%. This bill would also include a defined contribution plan option – the same one that was in last year’s H2410.

Both of these bills reduce the retirement benefits for future employees, but do nothing to reduce the unfunded liability of VRS.

This is that time in the session when the days are the longest. I would have posted this earlier had I not been at the GA.