Virginia Retirement System; modifies several provisions of defined benefit retirement plan. (HB1129)

Introduced By

Del. Bill Howell (R-Fredericksburg) with support from co-patron Del. Chris Jones (R-Suffolk)

Progress

Introduced
Passed Committee
Passed House
Passed Senate
Signed by Governor
Became Law

Description

Virginia Retirement System; defined benefit plan.  Modifies several provisions of the defined benefit retirement plan. Beginning January 1, 2013, the bill changes the calculation of average final compensation to cover a period of 60 months rather than 36 months. Under current law, the use of a 60-month period applies only to those employees hired on or after July 1, 2010. However, current employees affected by this change in average final compensation may use the 36-month period of calculation for compensation received prior to January 1, 2013, if it is greater than the 60-month period of calculation.

Effective January 1, 2013, except for employees who are within five years of their unreduced retirement date at that time, the bill (i) restricts cost of living adjustments (COLA) to those employees who reach the age for unreduced retirement benefits and (ii) reduces the COLA to the first two percent of inflation plus one-half of the next two percent, for a maximum total of three percent. Under current law, the COLA is the first three percent of inflation plus one-half of the next four percent, for a maximum total of five percent.

The bill also increases the employee contribution rate from five percent to six percent for all state employees, and members of the State Police Officers' Retirement System, and the Virginia Law Officers' Retirement System. For current employees, this increase in employee contributions is phased in increments of one-half percent per year. Similarly, the cost of prior service credit that currently may be purchased at the rate of five percent of salary, is increased to six percent on July 1, 2013.

Finally, for state and local employees hired on or after January 1, 2013, other than law-enforcement employees and judges, the bill reduces the multiplier from 1.7 to 1.6. Read the Bill »

Status

02/28/2012: Merged into HB1130

History

DateAction
01/12/2012Presented and ordered printed 12104007D
01/12/2012Referred to Committee on Appropriations
01/16/2012Assigned App. sub: Compensation and Retirement
01/25/2012Impact statement from VRS (HB1129)
02/02/2012Impact statement from VRS (HB1129)
02/09/2012Subcommittee recommends reporting with amendment(s) (7-Y 0-N)
02/09/2012Subcommittee recommends reporting with amendment(s) (6-Y 1-N)
02/10/2012Reported from Appropriations with substitute (20-Y 1-N) (see vote tally)
02/10/2012Committee substitute printed 12105282D-H1
02/12/2012Read first time
02/13/2012Read second time
02/13/2012Committee substitute agreed to 12105282D-H1
02/13/2012Engrossed by House - committee substitute HB1129H1
02/14/2012Read third time and passed House (74-Y 26-N)
02/14/2012VOTE: PASSAGE (74-Y 26-N) (see vote tally)
02/15/2012Constitutional reading dispensed
02/15/2012Referred to Committee on Finance
02/16/2012Impact statement from VRS (HB1129H1)
02/28/2012Incorporated by Finance (HB1130-Howell, W.J.) (15-Y 0-N) (see vote tally)

Comments

Judith Ewart writes:

I have read this bill carefully and believe that it is very fair to current retirees and those that are within 5 years of full retirement.

I urge the Legislature to adopt this or a similar bill that includes all of these important safeguards for current retirees and those within 5 years of full retirement.

Thank you very much,
Judith Ewart

Ray Fitz writes:

Judith, you obviously don't work for the state, so it must be easy to turn a blind eye others losing their hard earned pay. This is another salary decrease on top of the 5% salary decrease we just had not even a year ago. We can't afford lower salaries during a recession and there have not been any across the board raises in at least the past five years. To me, this is the most important bill all year and must be stopped.

State Employee writes:

How can they pass this??? It amounts to a basic pay cut for state employees who haven't had a raise in years already! It's not our fault the politicians have chosen to give state funds to their favorite cronies over the years instead of paying the amounts that were necessary to keep the fund solvent. We're doing our part, why aren't they?

Scott Boone writes:

Why do you insist on paying state expenses by using benefits and wages of state employees. Why not live in the real world and raise some revenue rather than these sneaky back door cuts to your employees. I'm currently researching all of the tax cuts the General Assembly doles out like candy. I would venture to say that you treat strangers and corprations better than your employees.

County Employee writes:

Not only does this amount to a pay cut, but it represents a retroactive pay cut. We were all employed with the understanding that we would be earning certain retirement benefits - many of us taking a lower salary than what we were earning in the private sector, in exchange for the security of a defined benefit pension plan. Now, they want to decrease our take-home pay now AND our future retirement benefit (some of which was already earned years ago). This bill is tantamount to legalizing breach of contract.