Monday, February 24, 2014

Block Efforts to Privatize the VRS Hybrid Plan/Lactation Support Bill Awaits Governor's Signature/Bill Protecting Teachers from Medical Liability Reports

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.

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.