Wednesday, March 7, 2012

No Vote on HB 576/Conferees Meet Over Pension Bills

It is hard to believe that the Senate is yet to vote on HB 576, the “Fire the Teacher” bill. The Governor does not appear to have the votes, but they keep putting off what seems inevitable.

The General Assembly appears determined to reduce VRS retirement benefits and have school board employees pay the 5% employee contribution. A committee of conference has been named and must now come to agreement on the bills passed by the House and Senate.

The Senate approach is to create a hybrid plan—part defined-benefit and part defined-contribution—for future hires. The Senate would give school boards the option of requiring employees to pay the 5% employee contribution, but they want to require raises to offset that contribution.

The House approach is to keep the current pension structure, but it reduces benefits by cutting the cost of living adjustment and the manner in which average final compensation is calculated. For new hires, the multiplier would go from 1.7% to
1.6%. In addition, the House wants to require payment of the employee contribution without requiring any off-setting raises.

Our goal is the make the best of a bad situation by advising conferees to choose the least harmful aspects of each approach. For this reason, we are asking you to write the conferees working on the two bills and deliver the following message:

It is my understanding that you will be serving on the committee of conference for House Bill 1130 and Senate Bill 498. As you work to develop a compromise between the House and Senate approaches to VRS reform, please consider the effects these bills will have upon achieving the goals of the VRS: to attract high quality personnel, to retain high quality personnel and to allow employees who have served with dedication to retire in a timely manner with adequate benefits.

With these goals in mind, I ask that as you develop your conference report, please:

1. Preserve the defined benefit system as opposed to a hybrid plan,
2. Grandfather current employees,
3. Include a commitment to fund the Board Certified Rate (Establish Intent to Pay),
4. Maintain the current disability retirement for school employees, and
5. Include a requirement for a salary offset for increased employee contributions.

The outcome of your deliberations will be of great consequence, and I ask that you bring representatives of the organizations of affected groups of employees into the discussions as you weigh your options.

Please click here to send your message now.

If for some reason, this link to the letter does not work, please go to to send your letter.