Years ago,
then VRS Director, Glen Pond was known to say, "You can't have a pile this
big without attracting some flies."
Glen's crude analogy fits current efforts to privatize a portion of the
hybrid retirement plan which is mandatory for those hired after January 1,
2014.
Although VEA
opposed the creation of the hybrid plan, if we were to have one, we wanted it
to be the best hybrid possible.
When the Joint
Legislative and Audit Review Commission (JLARC) offered the hybrid option, they
supported a "closed architecture" hybrid managed exclusively by
VRS. The VRS consultant in regard to the
hybrid plan, Mercer, concurred with this judgment.
Here’s what
the December 2011 JLARC report said:
Mercer
recommends that the administration of the defined contribution plan be limited
to a single vendor for simplicity and for cost efficiency. This is the administrative
structure used for the State’s deferred compensation plan. Officials from South
Carolina’s retirement system who were interviewed by JLARC staff also echoed this
recommendation.
The chief
benefit of a closed architecture is that VRS has, by benefit of high volume,
great leverage as it negotiates for low administrative fees to manage the
investments of VRS members.
HB 877
proposes "open architecture," where the door is open to an array of
corporations to manage VRS member investments.
Open architecture is a high fee option which will lead to lower
retirement benefits.
Our shared
long-term goal is to do our very best to ensure that Virginia's school board
employees, teachers and support personnel, have adequate and secure retirement
benefits.
HB 877 takes
us in the wrong direction in this regard.
One can only
wonder why this option is only being proposed for teachers and support
personnel. If this is such a great idea,
why is it not being proposed for the four state employee VRS plans?
HB 877 is
before the Senate Finance Committee on Wednesday morning. Please call SFC member offices urging
opposition to HB 877.
Colgan
(Co-Chair), Stosch
(Co-Chair), Howell,
Saslaw,
Norment,
Hanger,
Watkins,
Marsh,
Lucas,
Ruff,
Wagner,
Edwards,
Puckett,
Puller,
Deeds,
Locke,
McEachin
HB 720,
Delegate McClellan's Lactation Support bill, gained final passage in the Senate
today on a 40-0 vote, and it awaits the Governor's signature. Thanks to Delegate McClellan for carrying
this VEA legislation so effectively!
Senator Newman’s SB 624 reported from the House Civil Laws Subcommittee on a 10-0 vote. This bill says the school board employees who perform medical services shall not be held liable. VEA thanks Senator Newman for sponsoring this bill.
