Quantcast

YCQM: Aug 18, 2013 - WCAX.COM Local Vermont News, Weather and Sports-

YCQM: Aug 18, 2013

Posted: Updated:
BURLINGTON, Vt. -

GOOD MORNING, THANKS FOR JOINING US, I'M KRISTIN CARLSON. TODAY WE ARE TALKING ABOUT THE STATE DOLLARS AND STATE PENSION BENEFITS AND PROBLEMS. WE'RE JOINED BY TREASURER BETH PEARCE, THANK YOU FOR BEING HERE.

>> MY PLEASURE.

>> DARREN WILL JOIN THE QUESTIONING AS WELL. BEFORE WE BEGIN, COMMODORE HAS A BACKGROUND REPORT. TREASURER BETH PEARCE ANNOUNCED A NEW PLAN TO ADDRESS THE STATE BENEFIT AND PROBLEMS, BUT SOME SAY IT DOESN'T GO FAR ENOUGH. HERE'S THE REPORT.

>> FOLLOWING THE COUNTRY'S HOUSING BUBBLE COMES THE GROWING PROBLEM OF PENNILESS PENSIONS. IN VERMONT, UNFUNDED OBLIGATIONS TODAY $3.2 BILLION. THAT FIGURE REPRESENTS PROMISES MADE TO STATE WORKERS AND TEACHERS FOR RETIREMENT AND MEDICAL BENEFITS IN THE FUTURE.

>> I THINK IT ALREADY IS UNMANAGEABLE.

>> FINANCIAL EXPERT DAVID COATS SAID THE STATE PROMISED MORE THAN IT CAN AFFORD AND IS SINKING $80 MILLION FURTHER BEHIND EVERY YEAR. HIS SOLUTION: SWITCH FROM DEFINED BENEFIT PLANS, BETTER KNOWN AS PENSIONS, TO DEFINED CONTRIBUTION PLANS, LIKE 401-K'S FOR NEW EMPLOYEES.

>> I THINK THAT'S THE WRONG MOVE. I KNOW THAT HE HAS LOOKED AT THE SAME DATA I HAVE. WE HAVE A DIFFERENT SOLUTION TO IT.

>> STATE TREASURER BETH PEARCE SAYS THE STATE BEGAN IMPLEMENTING REFORMS IN 2005 AND IS ON THE RIGHT TRACK. SHE COMPARES THE STATE'S LIABILITY ANNUAL PAYMENTS TO A MORTGAGE THAT WILL BE PAID OFF BY 2038.

>> IT WILL INCREASE TO 2022 AND THEN BEGIN TO DECREASE.

>> VERMONT IS SET TO SPEND $108 MILLION THIS YEAR ON OBLIGATIONS. 75% OF WHICH IS COVERING OLD UNDER FUNDED OBLIGATIONS. EXPERTS SAY 2008'S RECESSION EXPOSED CHRONIC UNDER FUNDING IN THE TEACHERS FUND, AND CAUSED RETIREMENT INVESTMENT FUNDS TO FALL SHORT OF PROJECTIONS. THE STATE HAS LOWERED THE PROJECTED RATE, MAKING PREDICTIONS MORE ACCURATE, BUT ALSO INCREASING THE SIZE OF THE HOLE.

>> THE NICE PART IS, TEACHERS AND STATE EMPLOYEES HAVE BEEN WILLING TO PARTICIPATE IN A POSITIVE WAY IN THE PROCESS.

>> IN THE PAST FEW YEARS, UNIONS FOR STATE EMPLOYEES AND TEACHERS HAVE AGREED TO LATER RETIREMENT DATES, INCREASED PERSONAL CONTRIBUTIONS TO FUNDS, LOWERING THE STATE'S LIABILITY. SENATOR JANE KITSCHL SAID THAT CONVINCES HER IT CAN STAY.

>> THE TOP PRIORITY IS TO START FUNDING SEPARATELY THE RETIREE HEALTHCARE BENEFITS.

>> THE BENEFIT IS CURRENTLY PAID OUT OF THE TEACHERS PENSION FUND.

>> WE MAKE NO HEADWAY WHATSOEVER, AND THAT'S WHY WE'RE UNDERFUNDED MORE ON THE TEACHERS' PENSION THAN WE ARE ON THE STATE.

>> VERMONT COULD BRING IN AS MUCH AS $50 MILLION A YEAR FROM A FEDERAL INTERNET SALES TAX REFORM, AND USE THAT MONEY TO PAY THE $22 MILLION ANNUAL BILL. KOETS SAYS THE -- COATS SAYS THE FUNDS SHOULD BE BENEFITED -- DEDICATED, BUT IT SHOULD BE SCRAPPED FOR NEW HIRES. MUCH OF THE LIABILITY MATH RELIES ON PROJECTING HOW MUCH INN INVESTIGATED FUNDS WILL -- INVESTED FUNDS WILL EARN.

>> AGAIN, TREASURER BETH PEARCE JOINS US THIS MORNING. THANK YOU AGAIN FOR BEING HERE.

>> FILE PLEASURE.

>> I WOULD LIKE TO FILE UP ON -- FOLLOW UP ON SOMETHING YOU SAID IN KYLE'S REPORT. YOU HADERED FROM FINANCIAL EXPERT DAVID COATS SAYING THAT 401-K'S OR SOMETHING LIKE IT WOULD BE THE WAY TO GO. YOU SAY THAT'S NOT THE WAY TO GO. WHY ARE 401-K'S NOT THE RIGHT FIT HERE IN VERMONT?

>> I THINK 401-K'S, OR DEFINED CONTRIBUTION PLANS, LET'S DEFINE IT FIRST. DEFINED BENEFIT PLANS ARE POOLED INVESTMENTS AND YOU PUT IN A CONTRIBUTION AND YOUR BENEFIT IS GASH TEED AT THE OTHER -- GUARANTEED AT THE OTHER END. IN A DEFINED CONTRIBUTION, YOU PUT IN YOUR CONTRIBUTIONS, MAYBE AN EMPLOYER CONTRIBUTION AND EMPLOYEE CONTRIBUTION, YOU INVEST THOSE MONIES INDIVIDUALLY. YOU HAVE CHOICES WITHIN THE PLAN, AND THOSE DOLLARS ARE AVAILABLE FOR YOU FOR RETIREMENT. NOW, A COUPLE OF ISSUES IN TERMS OF RETIERLT SECURITY. -- RETIREMENT SECURITY. ONE, OBJECT VUGS ONE IS THAT -- OBVIOUS ONE, YOU MADE THOSE INVESTMENT CHOICES AS AN INDIVIDUAL, YOU MAY NOT MAKE THE MOST EFFECTIVE CHOICES FOR THE FUTURE. SOME FOLKS PUT IT ALL INTO HOT STOCKS OR INVESTMENTS THAT ARE VOLATILE, OTHER FOLKS PUT IT INTO MORE CON SIF -- CONSERVATIVE FUNDS. PENSION FUNDS ARE PROFESSIONALLY MANAGED THROUGH A POOL PROCESS, WE HIRE INVESTMENT MANAGERS. THEY OVER TIME GET A BETTER RETURN. THEY --

>> DOES THAT MEAN THAT PEOPLE WHO WHO AREN'T ABLE TO ACCESS A PENSION SYSTEM, WHO WORK IN THE PRIVATE SYSTEM, WHO, YOU KNOW, AS YOU KNOW, THE VAST MAJORITY OF VERMONTERS DON'T HAVE THAT STATE EMPLOYEE BENEFIT, THEY WORK FOR A PRIVATE COMPANY. SHOULD THEY ALSO HAVE THAT SAME PROTECTION, THEN? SOME COMPANIES DON'T EVEN CONTRIBUTE.

>> I THINK THAT RETIREMENT SECURITY IS IMPORTANT FOR EVERY VERMONTER, AND I WOULD ADVOCATE THAT WE NEED TO TAKE A LOOK AT THE WAY WE DELIVER THAT. IT'S IMPORTANT FOR OUR FUTURE. YOU TAKE A LOOK AT OUR ECONOMY, WE'RE A SMALL STATE IN TERMS OF POPULATION. WHEN YOU GET TO RETIREMENT, IF YOU HAVE ADEQUATE INCOME AND RELIABLE INCOME, YOU BUY GOODS AND SERVICES. THOSE GOODS SERVICES CREATE JOBS. SO PENSIONS ARE PART OF AN ECONOMIC GENERATOR, AND FROM MY PERSPECTIVE, WE SHOULD BE DOING ALL WE CAN FOR RETIREMENT SECURITY FOR ALL VERMONTERS. WE DO FINANCIAL LITERACY PROGRAMS, TRYING TO HELP IN THOSE AREAS, TRYING TO HELP BUILD SOME GOOD PRACTICES FROM ALL THE WAY FROM KINDERGARTEN ALL THE WAY UP TO THE GOLDEN YEARS. BUT ON THE PENSION SIDE, WHERE THE TREASURER IS INVOLVED IN THE DAY-TO-DAY MANAGEMENT OF THAT, I AM A MEMBER OF THE INVESTMENT COMMITTEE. THAT INVESTS THOSE FUNDS. WE ARE LOOKING INTO WHAT CAN WE DO TO MAXIMIZE THAT RETURN FOR THE EMPLOYEE AND FOR THE TAXPAYER. WE TAKE A LOOK AT RETIREMENT DOLLARS, THE MONEY THAT WE DISTRIBUTE IN A GIVEN YEAR TO RETIREES, NUMBER ONE, IT IS AN ECONOMIC GENERATOR, AND ON AVERAGE, IT VARIES FROM YEAR TO YEAR, AND ALSO VARIES FROM SYSTEM TO SYSTEM, BUT ON AVERAGE, 70 CENTS OUT OF EVERY DOLLAR PAID OUT IN RETIREMENT BENEFITS IS FROM INVESTMENT INCOME. THE POWER OF INVESTING. I ALWAYS POINT OUT THAT IF YOU WANTED TO SEND YOUR CHILD TO COLLEGE AND WE HOPE THAT FOLKS TAKE A LOOK AT THOSE OPPORTUNITIES, YOU START SAVING IN YOUR SOPHOMORE YEAR OF HIGH SCHOOL, YOU ARE NOT LIKELY TO MEET THAT COLLEGE BILL. BUT IF YOU START IN PRESCHOOL, OR KINDERGARTEN AND START WITH SOME DISCIPLINE AND YOU MAKE THOSE PAYMENTS ALL THE TIME, YOU ARE GOING TO HAVE A BETTER CHANCE OF REACHING THAT EDUCATION GOAL FOR YOUR CHILD. FOR THE STATE, WE NEED TO MAKE SURE THAT WE PAY WHAT'S CALLED THE ANNUAL ACTUARY REQUIRED CONTRIBUTION. IT IS CALLED AN AARC. WE NEED TO MAKE SURE WE PAY THAT APPROPRIATED AMOUNT EACH YEAR, AND CONTINUE TO EXERCISE THAT DISCIPLINE. FRANKLY IN THE TEACHERS SYSTEM, WE DID NOT EXERCISE THAT DISCIPLINE. ONE OF THE POINTS THAT MR. COATS MADE IS THAT THE TEACHERS SYSTEM IS A LESS FUNDED STATUS THAN THE STATE SYSTEM. THAT'S TRUE. PART OF IT IS BECAUSE OF UNDERFUNDING OF THAT SYSTEM OVER YEARS. CHRONIC UNDERFUNDING. SOMETIMES LESS THAN HALF OF THAT ANNUAL ACTUARY CONTRIBUTION.

>> SOME PEOPLE FLIP THAT ON THE OTHER SIDE, THEY SAY IT'S BECAUSE THERE'S REALLY SOME GENEROUS BENEFITS THERE THAT MAYBE TAXPAYERS CAN'T AFFORD.

>> WELL, IF YOU TAKE A LOOK AT THE HISTORY OF THIS FUND, AGAIN, WE HAVE DONE ANALYSIS AND WE BELIEVE OUR BENEFITS ARE MODEST, AND EMPLOYEES MADE CHANGES IN FISCAL YEAR '10, WE NEGOTIATED CHANGES WITH EMPLOYEES. WE PUSHED OUT THE AGE OF -- PUSHED UP THE AGE OF RETIREMENT.

>> TO WHAT?

>> IT USED TO BE 62 YEARS OF AGE, OR 30 YEARS, AND NOW WE PUSHED IT OUT TO 65 YEARS OR RULE OF 90, WHICH MEANS A COMBINATION OF YEARS OF SERVICE AND AGE.

>> IS THERE A WAY TO FIGURE OUT HOW MUCH THAT IS GOING TO SAVE?

>> ABSOLUTELY. THE OTHER PIECE OF THAT COMPONENT, WE ALSO, AT THE SAME TIME, PUSHED UP THAT AGE, WE ALSO INCREASED THE AMOUNT OF CONTRIBUTION FROM EMPLOYEES. THE COMBINE OF THOSE TWO INITIATIVES SAVED THE TAXPAYERS $15 MILLION PER YEAR.

>> A THE LOT OF PEOPLE, BETH, I KNOW YOU ARE OUT AND ABOUT. I BET A LOT OF VERMONTERS WILL SAY I AM GOING TO WORK UNTIL 65, 67, THAT JUST MAKES SENSE.

>> I AGREE. IT'S PUTTING IT OUT THERE WITH A GOOD MOVE, RATHER THAN CHANGING THE BENEFITS, BECAUSE, AGAIN, OUR BENEFITS ARE MODEST, BUT THIS ALLOWS FOR AN EMPLOYEE TO HAVE A CAREER, BENEFITS AT THE END OF THAT. MODEST INCREASES, I APPRECIATED THE FACT THAT TEACHERS STEPPED UP TO THE PLATE AND MADE THOSE CHANGES WITH US. THAT WAS $15 MILLION PER YEAR ON THAT SIDE. ON THE STATE'S SIDE, WE MADE CHANGES THAT RESULTED IN $5 MILLION ANNUAL SAVINGS FOR THE TAXPAYER.

>> YOU ARE TALKING ABOUT BILLIONS OF DOLLARS, THOUGH, IN THE PROBLEM, AREN'T WE?

>> WE ARE. THIS, AGAIN, PAYMENTS EACH YEAR. TAKE A LOOK AT THE UNFUNDED LIABILITY, IF YOU HAVE A MORTGAGE FOR YOUR HOUSE, LET'S SAY $250,000. OKAY? THAT MORTGAGE ISN'T PAID OFF IN ONE YEAR, IT'S PAID OVER TIME. THE PENSION PAYMENTS ARE DONE IN THE SAME WAY. THE BIG ISSUE IS PAYING THAT ANNUAL ACTUARY REQUIRED CONTRIBUTION AND EXERCISING DISCIPLINE TO DO THAT. WHEN YOU DO THAT, YOU ARE IN A BETTER FUNDED SITUATION. NOW, GOING INTO DWAIT -- 2008, THE GREAT RECESSION, BOTH SYSTEMS HAD A DECLINE. THE TEACHERS SYSTEM WAS IN A LESS WELL FUNDED POSITION GOING INTO THAT, BECAUSE OF CHRONIC UNDERFUNDING AND THE HEALTHCARE ISSUE, WHICH I DO WANT TO GET BACK TO. THEN THE STATE, THE STATE WAS IN A SURPLUS SITUATION IN 2007. IT WAS FUNDED AT 100.8. 11 MILLION SURPLUS RATHER THAN AN UNFUNDED LIABILITY. IT IS NOW AROUND $400 MILLION LIABILITY. 401.8 UNFUNDED LIABILITY. WE ARE GOING TO PAY THAT OFF OVER TIME AS PART OF THAT MORTGAGE PAYMENT, AND WHEN WE MADE THOSE CHANGES BACK IN '10 AND '11 FOR THESE SYSTEMS, RECOGNIZE THAT AND WORK WITH THE LEGISLATURE TO GET SOME FUNDING. THE BIG ISSUE ARE THE TEACHERS SIDE IS THE HEALTHCARE. THE WAY WE ARE PAYING THE HEALTHCARE FOR TEACHERS IS FRANKLY THE MOST EXPENSIVE WAY FOR THE TAXPAYER.

>> BUT UNDER THE SHUMLIN ADMINISTRATION, WE SHOULD BE SEEING CHANGES IN HEALTHCARE IN A FEW YEARS. DOES THAT MAKE THAT PROBLEM GO AWAY IF WE MOVE TOWARDS SINGLE PAY AS THE GOVERNOR WANTS IN 2017?

>> SINGLE PAY IS THE LARGE PICTURE, RIGHT NOW, TAKING A LOOK, WE ARE GOING TO TAKE TO LOOK AT RAMIFICATIONS FOR THE RETIREMENT SYSTEM. BOTTOM LINE FOR ME IS, AS TREASURER, IS THAT RIGHT NOW WE CAN DO SOME THINGS TO CHANGE THE HEALTHCARE FOR TEACHERS TO LOWER THE COST. WE JUST SIMPLY MOVE TO SOMETHING CALLED EGGWHIP. SOUNDS LIKE BREAKFAST. EMPLOYEE GROUP WAVER PLAN. THAT WILL LOWER LIABILITY BY $150 MILLION, WHICH IS 18% OF THE FISCAL YEAR '12 UNFUNDED LIABILITY. THAT'S SIGNIFICANT PIECE TO THAT. THE PROBLEM IS, THE WAY WE ARE CONTINUING TO FUND HEALTHCARE, THAT UNFUNDED LIABILITY WILL CONTINUE TO RISE UNTIL WE ADDRESS THAT. IT IS SOMETHING I WANT TO TALK WITH THE LEGISLATURE ABOUT THIS YEAR.

>> I GUESS I JUST HAVE A FUNDAMENTAL QUESTION. ARE STATE TAXPAYERS ABLE TO MEET THE GENERAL DEMAND FOR PENSION AND BENEFIT. IS THAT EQUAL RIGHT NOW?

>> I THINK THINK IF WE FUND IT WITH THE CORRECT DISCIPLINE THAT IT IS DOABLE AND IT IS AFFORDABLE TO THE TAXPAYER AND AFFORDABLE TO THE RE-STIEREE IN TERMS OF LONG TERM BENEFIT SFRIK TOUR AND ECONOMIC GENERATOR. YOU HAVE TO FIND BALANCE. I THINK WHAT WE'VE DONE THE LAST SEVERAL YEARS IS TRY TO ACHIEVE THAT BALANCE. THE BIGGEST FUNDAMENTAL PROBLEM WE HAVE RIGHT NOW IS THE LACK OF FUNDING FOR HEALTHCARE IN THE TEACHER SYSTEM.

>> WHEN YOU TALK ABOUT THE CHRONIC UNDER FUNDING, THE BOTTOM LINE, REALLY, YOU CAN POINT 0 -- TO HEALTHCARE AS THE REASON FOR THIS PENSION PROBLEM?

>> THE DIETCHERS.

>> ON THE TEACHERS SIDE. TEACHERS UNFUNDED LIABILITY IS $945 MILLION. 424 MILLION OF THAT IS RELATED TO THE ECONOMIC GREAT RECESSION. 157 MILLION OF THAT IS RELATED TO UNDERFUNDING OF HEALTHCARE, JUST FROM 2001 TO CURRENT. BECAUSE. WAY THE FINANCIALS ARE DONE PRIOR TO THAT, I WASN'T ABLE TO BREAK THOSE DOLLARS OUT. BUT FROM 2001 TO 2012, THAT WAS $156 MILLION OF THAT UNFUNDED LIABILITY. 114 OF THAT IS FROM THE UNDERFUNDING THAT OCCURRED THE LAST SEVERAL YEARS. THAT'S 73% OF $696 MILLION OF THAT TOTAL. THOSE ARE ISSUES THAT NEED TO BE ADDRESSED, PARTICULARLY THE HEALTHCARE, SOMETHING THAT WE HAVE CONTROL OVER, ONE OF THE ISSUES WE WANT TO TALK TO THE GOVERNOR ABOUT THIS SESSION IS IMPROVING THE WAY WE FUND THAT. TEACHERS ARE OFTEN MADE SIGNIFICANT CHANGES BACK IN '10 TO THE HEALTHCARE SIDE OF THE EQUATION: PRIOR TO 2010, IF YOU WERE A TEACHER AND YOU HAD TEN YEARS OF SERVICE, YOU RECEIVED 80% OF YOUR PREMIUM SUBSIDIZED BY -- IN RETIREMENT. THAT WAS A FAIRLY GENEROUS PACKAGE. WHAT WE'VE DONE NOW, IS XHANGD THAT -- CHANGED THAT TO A TIERED STRUCTURE. YOU HAVE TO WORK 15 YEARS BEFORE YOU ARE ELIGIBLE FOR ANY SUBSIDY. THEN IT RACH ET CETERA UP FROM 0 -- RACHETS UP TO 40 TO 80 AT YEAR 25 OF SERVICE. WHAT THAT DOES IS REWARD LONG-TERM SERVICE FOR TEACHERS, AND ALSO SAVES US DOLLARS. WHEN WE MADE THAT CHANGE, THE UNFUNDED LIABILITY FOR THAT SYSTEM DROPPED BY $170 MILLION. THE PROBLEM IS THE LACK OF FUNDING, THE WAY THAT WE ARE HANDLING THOSE DOLLARS IS THAT WE'RE ESSENTIALLY PAYING LESS NOW AND A LOT MORE DOWN THE ROAD. AS A CONSEQUENCE, THAT'S GOING TO TIN TO RISE. THE 20 MILLION THAT YOU DON'T -- TO CONTINUE TO RISE. THE 20 MILLION YOU DON'T PAY TODAY IS GOING TO COST THE TAXPAYERS $58 MILLION IN THE LONG RUN. THAT'S A PRETTY SIGNIFICANT COST. ESSENTIALLY WHAT WE ARE DOING, WE ARE PUTTING IT ON OUR CREDIT CARD AND THEN --

>> KICKING IT DOWN THE ROAD.

>> WE CAN'T DO THAT. WE NEED TO FUND THIS WITH THE SAME DISCIPLINE THAT WE FUND THE PENSION SITE.

>> WHERE IS THE PUSH BACK?

>> I THINK THAT WE'VE BEEN RAYING THE ISSUE, I HAVE BEEN AN ADVOCATE. DAVID COATS AND I WERE ON THE SAME -- HE WAS ON THE COMMITTEE, AND I WAS A STAFF TO THE COMMITTEE BACK IN 2009. AND ONE OF THE RECOMMENDATIONS BACK IN 2009 IN THAT PENSION REPORT WAS TO FIND AN EXPLICIT FUNDING SOURCE FOR THIS HEALTHCARE AND TO MAKE THAT A PRIORITY. AS A RESULT OF THAT, I WOULD HAVE BEEN AN ADVOCATE TO INCREASE THAT FUNDING. THE FIRST YEAR --

>> WHERE IS THE PUSH BACK?

>> PUSH BACK IS THAT THERE ARE LIMITED RESOURCES AND HOW THEY ARE GOING TO MANAGE THAT PROCESS. THE FIRST YEAR WE HAD 1,750,000 OF INCREASED APPROPRIATION. THAT WAS A START. THE NEXT YEAR IT WAS 4,750,000. I WAS PLEASED WITH THAT. IT IS MOVING IN THE RIGHT DIRECTION.

>> MOVING IN THE RIGHT DIRECTION.

>> NEXT YEAR --

>> FINISH THE THOUGHT.

>> IN DKS NEXT YEAR 4,750, WE LEVEL FUNDED IT. THAT WAS A STEP BACKWARDS. WE NEED TO PUT MORE MONEY INTO THIS INCREMENTALLY AND MOVE IT DOWN SO WE ARE SAVING TAXPAYER DOLLARS IN THE LONG RUN.

>> WE WILL TAKE A BRIEF BREAK. WE CONTINUE TALKING ABOUT TAXPAYER DOLLARS AND HOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOWOW

>>> WELCOME BACK. WE ARE JOINED THIS SUNDAY MORNING BY STATE TREASURER BETH PEARCE. THERE IS A BIG PROBLEM WITH THE STATE'S PENSION PROGRAM AND PLAN, SOMETHING BETH PEARCE SAYS IS STILL GOING TO CONTINUE FOR A WAYS BEFORE A POSSIBLE SOLUTION, MAYBE 2038, WHICH YOU SAID YOU WILL STILL BE IN OFFICE, RIGHT? [ LAUGHTER ]

>> COME BACK AND ASK HER AND SEE HOW IT WENT. BUT YOU HAD ONE LAST POINT YOU WANTED TO MAKE ABOUT THIS PROBLEM.

>> TWO POINTS. ONE IS COLLABORATIVELY WORKING TOGETHER IS THE WAY THAT THINGS GET DONE IN VERMONT. THIS PAST YEAR, BOTH EMPLOYERS AND EMPLOYEES PUT IN A LITTLE MORE IN THE MUNICIPAL SYSTEM TO FUND THAT UP. THAT WAS A JOINT EFFORT BY BOTH GROUPS TO MAKE THAT HAPPEN. OVERALL, ITS A BETTER VALUE FOR EMPLOYEES AND FOR THE TAXPAYER. WE HAVE BEEN ABLE TO DO THAT. I APPRECIATE THE FACT THAT EMPLOYEES ON THE STATE SIDE AND TEACHERS HAVE STEPPED UP TO THE PLATE. BETWEEN THOSE TWO GROUPS, THAT'S $20 MILLION A YEAR LESS PAID BY THE TAXPAYER. GETTING BACK TO DEFINED CONTRIBUTION, VERSUS DEFINED BENEFIT AND THOSE TYPES OF PLANS, THERE ARE A LOT OF REASONS THAT DB PLANS ARE A BETTER BANG FOR THE DOLLAR. ONE IS BY PUT -- POOLING THOSE DOLLARS, YOU GET ECONOMY OF SCALE, YOU GET LOWER RATES FOR ADMINISTRATIVE FEES, AND SOMETHING CALLED RISK POOLING. A COMPLEX CONCEPT, BUT ESSENTIALLY IT MEANS THAT I -- AS I'M GETTING CLOSER TO RETIREMENT, GOING TO BE 60 IN OCTOBER, AND GETTING CLOSER TO RETIERLT, BUT FOR -- RETIREMENT. BUT FOR SEVERAL YEARS NOW, AS I GET CLOSER, I SHOULD BE MORE CONSERVATIVE IN MY INVESTMENTS. AS OPPOSED TO A YOUNGER EMPLOYEE. BY POOLING THOSE ASSETS, YOU ARE ABLE TO DO RISK POOLING, BETTER RETURN, ADJUSTED RETURN IN YOUR PORTFOLIO. DB PLANS ARE BETTER VALUE FOR THE TAXPAYER. DOLLAR IN, DOLLAR OUT, THEY PRODUCE MORE.

>> YOU TALK A LOT THE 20 MINUTES ABOUT HOW YOU ARE FOCUSED ON THE TAXPAYER, MAKING SURE THAT THEY ARE ONLY PAYING WHAT THEY NEED TO. THEY GET THE BEST BUY. I WANT TO ASK YOU ABOUT SOMETHING ELSE. RECENTLY THE SHUMLIN ADMINISTRATION AWARDED A NO-BID CONTRACT FOR $100,000 TO DO SOME HEALTHCARE WORK. SHE HAD BEEN WORKING IN STATE, DECIDED FOR PERSONAL REASONS TO MOVE TO RHODE ISLAND, THE STATE IS GOING TO KEEP HER ON. DO YOU THINK AWARDING NO BID CONTRACTS ENSURES TAXPAYER DOLLARS ARE SPENT THE MOST EFFICIENTLY?

>> I AM NOT GOING TO COMMENT ON A SPECIFIC CASE AND WHAT THE ISSUES ARE.

>> WHY NOT?

>> BECAUSE I AM NOT INVOLVED IN THE ADMINISTRATION'S DECISION-MAKING, I HAVEN'T SEEN THE DATA AROUND THAT. I'M SIMPLY NOT GOING TO RESPOND TO THAT. THE STATE HAS AN ADMINISTRATIVE BULLETIN OF CONTRACTING TO ENSURE A LEVEL PLAYING FIELD, AND HAS EXCEPTIONS BASED ON WAIVERS FOR SPECIFIC SITUATIONS THAT NEED TO BE DOCUMENTED. AGAIN, I HAVEN'T SEEN THE SPECIAL FIX OF THIS INDICATION. I KNOW IN THE TREASURER'S OFFICE WE FIND WAYS TO LOWER THE COST OF FINANCING IN ANY OPPORTUNITY THAT WE CAN.

>> HAVE YOU EVER AWARDED A NO-BID CONTRACT, I KNOW SOMETIMES THOSE THINGS ARE CONTRACTED OUT IN THE TREASURER'S OFFICE. HAVE YOU EVER AWARDED ONE?

>> WE HAVE HAD SERVICE FIRST CONTRACTS --

>> NO BID CONTRACTS?

>> WE HAVE BEEN ABLE TO DEMONSTRATE THAT THE EXPERTISE IN A PARTICULAR AREA, IN A PARTICULAR EXPERTISE, THAT THERE ARE A LIMITED NUMBER OF VENDORS AND WE'VE ACTED ACCORDINGLY AND DOCUMENTED THAT.

>> DO YOU THINK THAT, YOU KNOW, I'VE TALKED WITH FORMER ELECTED STATEWIDE OFFICIALS ABOUT CONTRACTS, AND LIMITED RESOURCES OF EXPERTS, YOU GET THREE BACK. A LOT OF TIMES THERE IS THAT COMPETITIVE PROCESS. DO YOU THINK THAT BUILDING FOR CONTRACTS CAN DRIVE DOWN THE PRICE? SFOOILT ABSOLUTELY. WHICH IS WHY WE GO OUT AND BID CONTRACTS IN THE TREASURER'S OFFICE. WHETHER THEY ARE INVESTMENT RELATED OR INVESTMENT ADMINISTRATION. THIS PAST YEAR WE BID THE DEFINED CONTRIBUTION ADMINISTRATION, AND I DON'T HAVE A NUMBER IN FRONT OF ME, IT WAS A 20-ODD-SOME PERCENT REDUCTION IN THE COST OF PROVIDING THAT SERVICE, WHICH TURNS AROUND AND REDUCES THE COST FOR THE POTENTIAL RETIREE. THERE'S AN EXAMPLE, WE CHANGED OUR -- WE WENT OUT AND DID COMPETITIVE BUILDING FOR OUR BANK FOR PENSION SERVICES AND SAVED OVER $250,000 IN DOING THAT. WE HAVE ALSO HAD SITUATIONS WHERE WE WERE DOING SOME SPECIFIC AREAS, THAT WE HAD A NEED FOR A CONTINUITY OF SERVICE, AND WERE ABLE TO DEMONSTRATE THAT BOTH UNDER THE DOUGLAS AND SHUMLIN ADMINISTRATION. CAN YOU TAKE A LOOK BACK IN THE RECORD AS FAR BACK AS THE DOUGLAS ADMINISTRATION, WHERE THEY MADE A POOL OF THOSE. THOSE WERE TO THE BENEFIT OF THE TAXPAYERS, WELL DOCUMENTED. AGAIN, I DON'T KNOW THE SPECIFICS ON THIS CASE, I ASSUME THEY DID THE SAME DOCUMENTATION PROCESS.

>> I WOULD LIKE TO GET BACK TO PENSIONS A LITTLE BIT, AND THAT HIGH-PROFILE CASE INVOLVING A STATE TROOPER, JAMES DEEGAN. I THINK A LOT OF FOLKS WERE SHOCKED TO LEARN THAT HE STILL QUALIFIED FOR HIS STATE PENSION, EVEN AFTER BEING CONVICTED OF PADDING HIS TIME SHEET. BUT THAT'S CHANGED. THINGS ARE DIFFERENT NOW, THE STATE AND EMPLOYEES REALLY RALLIED BEHIND CHANGING THAT. EXPLAIN HOW THAT WORKS.

>> I THINK YOUR POINT IS WELL TAKEN, THAT PEOPLE RALLIED TOGETHER TO GET THAT DONE, TO MAKE THOSE CHANGES. WE HAD A PENSION FORFEITURE BILL PASSED BY THE LEGISLATURE THIS SESSION, AND IT HAD EMPLOYEE SUPPORT, IT HAD THE SUPPORT OF THE VARIOUS COMMITTEES. WE HAD TO FINE TUNE IT AS YOU GO THROUGH THESE THINGS, BUT WHAT IT DOES, IN AREAS OF FINANCIAL CRIMES, IT REQUIRES THAT A REVIEW BE DONE FOR EITHER PARTIAL OR FULL TERMINATION OF PENSION BENEFITS. NOT THE AMOUNT THAT THEY PUT IN, NOT THEIR CONTRIBUTIONS, BUT THE AMOUNT THAT WOULD BE FROM INTEREST AND STATE CONTRIBUTIONS. IT GOES THROUGH A CIVIL PROCEDURE WHERE THE JUDGE TAKES A LOOK AT THE FACTS AND MAKES A DETERMINATION ON THAT. THAT IS A PROTECTION FOR THE TAXPAYER. I THINK IT IS AN EXAMPLE OF VERY GOOD GOVERNMENT AND A BALANCED APPROACH TO THIS, AND, AGAIN, WE HAD EMPLOYEE GROUPS IN A WIDE VARIETY OF FOLKS INVOLVED AND COMING UP WITH A SOLUTION THAT WORKS FOR VERMONT.

>> EARLIER WE JOKED ABOUT HOW WHEN IT COMES TO SOME OF THESE PENSION PROBLEMS, YOU ARE HOPING TO HAVE A SOLUTION IN 2038, YOU ARE STILL GOING TO BE THERE. DO YOU PLAN TO RUN FOR REELECTION?

>> DO YOU PLAN ON RETIRING ANYTIME SOON?

>> I AM NOT RETIRING ANYTIME SOON. I LOVE WHAT I DO. THIS IS THE BEST JOB IN THE STATE. AND WE HAVE A LOCAL INVESTMENT GROUP, LOWER THE COST OF FINANCING.

>> SOUNDS LIKE YOU WANT TO STICK AROUND.

>> I LOVE IT. I AM NOT AT THIS POINT MAKING ANY NOUMGSMENTS -- ANNOUNCEMENTS. I WILL TELL YOU, AND I SAID THIS TO YOU BEFORE, THIS IS THE ONLY ELECTIVE OFFICE I WOULD EVER SEEK. BOTTOM LINE, THIS IS NOT A STEPPING STONE TO SOMETHING ELSE. THIS IS MY LIFE'S WORK. I HAVE BEEN DOING IT FOR 35 -- MORE THAN THAT NOW, 35-PLUS YEARS, AND ITS SOMETHING THAT I FEEL VERY STRONGLY ABOUT. IT'S ADDING VALUE, IT'S PUBLIC SERVICE. MY DAD WAS ON A FINANCE COMMITTEE BOARD, SELECT PERSON MEMBER IN OUR TOWN, SCHOOL COMMITTEEE. IN FINANCE. NUMBERS ARE IN MY BLOOD.

>> THE THING THAT'S INTERESTING, WHEN YOU LOOK AT THE PICTURE OF ELECTED PEOPLE STATEWIDE, AND I'M SURE YOU HAVE NOTICED THIS, YOU ARE ONLY WOMAN ELECTED STATEWIDE.

>> I HAVE NOTICED IT.

>> YOU ARE THE ONLY WOMAN ELECTED STATEWIDE IN VERMONT. SOMETIMES I THINK PEOPLE THINK THAT'S STUNNING, GIVEN THAT THE STATE HAS SEEN SUCH A PROGRESSIVE STATE. WHY DO YOU THINK THAT IS?

>> I AM NOT SURE. I WOULDN'T RECOMMEND WE SHOULD TAKE SOMEBODY OUT OF OFFICE BECAUSE THEY ARE NOT A WOMAN. I THINK WE HAVE GREAT PEOPLE IN ELECTIVE OFFICE IN THIS STATE, BUT YOU LOOK ACROSS THE BOARD IN NEW HAMPSHIRE, THEIR ENTIRE CONGRESSIONAL DELEGATION, GOVERNOR --

>> VERMONT HAS NEVER SENT A WOMAN TO CONGRESS.

>> THAT'S TRUE. WE HAVE GOT THE BEST CONGRESSIONAL DELEGATION IN THE COUNTRY, BUT I WOULD LOVE TO SEE DOWN THE ROAD WITH THE BEST CONGRESSIONAL DELEGATION INCLUDE WOMEN AS WELL. I THINK YOU TAKE A LOOK AT OTHER STATES, DIFFERENT REPRESENTATION. I DID WANT TO POINT OUT THAT OF THE SIX NEW ENGLAND STATES, FIVE OF THE SIX HAVE WOMEN TREASURERS. TREASURERS.

>> JUST A COUPLE MINUTES LEFT. I THINK THAT FOLKS SITTING AT HOME MAY BE INTERESTED TO LEARN THAT YOUR OFFICE IS SITTING ON POSSIBLY SOME OF THEIR MONEY.

>> ABSOLUTELY.

>> UNCLAIMED PROPERTY.

>> UNCLAIMED PROPERTY MIGHT BE MONEY THAT YOU FORGOT ABOUT, YOU HAD A SECURITY DEPOSIT, YOU MOVED. OR BANK DEPOSIT ACCOUNT THAT YOU SOMEHOW MISPLACED OR MOVED AND JUST DIDN'T THINK ABOUT IT. MAKE YOU WERE IN COLLEGE AND YOU MOVED ON AND FORGOT ABOUT IT. THAT'S SOME OF THE MONEY WE HAVE IN UNCLACHLD PROPERTY. THE -- UNCLAIMED PROPERTY. THE COMPANIES ARE NOT ALLOWED TO KEEP IT. THEY HAVE TURN IT OVER TO THE STATE AND WE TRY TO FIND THE RIGHTFUL OWNERS. YOU CAN CHECK OUT OUR WEBSITE, MISSING MONEY.VERMONT.GOV, OR JUST GO TO THE STATE TREASURER'S WEBSITE, AND WE HAVE A DATABASE, YOU CAN SEARCH BY NAME, OR BY TOWN. PEOPLE FIND THEIR RELATIVES ALL THE TIME. IT IS A GREAT WAY FOR US TO RETURN MONEY. IN THE PAST TWO YEARS WE'VE RETURNED ABOUT $5 MILLION THIS IT YEAR, AND A LITTLE LESS THE PREVIOUS YEAR, BUT $ -- 14,500 VERMONTERS RECEIVED FUNDS IN '11. ONE OF THE THINGS THAT WE DID IN THIS LEGISLATIVE SESSION IS WORK WITH INSURANCE COMPANIES, AND, AGAIN, THIS IS ABOUT COLLABORATION, WORKING TOGETHER. WE DID SOME AUDITS, AND WE FOUND THAT A THE LOW OF CASES -- A LOT OF CASES WHERE INSURANCE MONEY WAS NOT -- THE INSURED HAD PASSED AWAY, BUT THE BENEFICIARY DID NOT KNOW THEY HAD IT, IT WAS STILL WITH THE INSURANCE COMPANY. AS A RESULT, WE RECEIVED ABOUT $2.6 MILLION, IT'S MOVED UP A LITTLE, 2500 ROUGHLY, POLICIES, AND WE ARE IN THE PROCESS OF TRYING TO REACH THOSE PEOPLE AND RETURN THOSE TO VERMONTERS. THAT'S NEW MONEY. WE ALSO PUT IT THROUGH A BILL, AND THIS IS, AGAIN ARCS COLLABORATIVE EFFORT -- THIS IS A COLLABORATIVE EFFORT THAT REQUIRES INSURANCE COMPANIES TO CHECK TWICE A YEAR, USING DATABASES, TO SEE IF THE INSURED HAS PASSED AWAY. IF THAT HAS IN FACT HAPPENED, TO MAKE A GOOD FAITH EFFORT TO FIND THAT INDIVIDUAL, IF THEY ARE NOT ABLE TO DO THAT, FIND THE BENEFICIARY. AND RETURN THAT MONEY TO THE STATE TREASURER'S OFFICE.

>> WE WILL PUT A LINK TO THAT.

>> THAT WOULD BE GREAT, THANK YOU.

>> ON WCAX.

>> WE LOVE TO GIVE THAT MONEY AWAY.

>> ON THAT NOTE WE'LL LEAVE IT THERE. WITH STATE TREASURER BETH PEARCE, SHE LOVES TO TALK DOLLARS IN THE STATE'S FINANCES. YOU CAN REACH OUT TO HER THROUGH HER OFFICE IN MONTPELIER. THANK YOU FOR YOUR TIME.

Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and WCAX. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service.