Benefits on the chopping block for Vt. teachers, state workers?
MONTPELIER, Vt. (WCAX) - Vermont’s Democratic treasurer is sounding the alarm as our unfunded pension liability is reaching a turning point.
The state’s retirement fund for teachers and state employees has been an area of concern for years as the retirement piggy bank is not having enough money added annually to cover all of the retirees drawing on the fund.
The situation worsened this year due to the retirement of an unusually large number of teachers in one year, from organizational changes from ACT 46 and pandemic-driven retirements.
“Number one, they’re painful and we recognize that. We would love to have something else to report,” said Beth Pearce, D-Vt. Treasurer.
The gap in funding has now reached $600 million. To save the fund from insolvency, Pearce wants to reduce cost-of-living adjustments for retired state employees and eliminate them for retired teachers.
Vermont’s teachers union is balking at the proposal, saying many teachers stick around because of their retirement benefits.
“Pay more to get less is not part of the bargain we signed up for,” said Don Tinney, the president of the Vermont NEA.
Pearce says the alternative is for lawmakers to make an immediate infusion of $96 million into the pension fund, an investment that might be a hard sell in a tight budget year.
“Those choices are not good. Not fund it and create more problems and more draconian measures down the road. Or fund it and it has an impact on the appropriations and the availability of dollars,” Pearce said.
The NEA instead says lawmakers should institute a tax on the highest-earning Vermonters to fill the $96 million.
Top lawmakers say they’re mulling over all ideas, as Vermont can’t kick the can down the road anymore.
But with the pandemic still raging and thousands out of work, their attention will be stretched thin.
“This is a priority of mine but I will say this COVID pandemic comes first and I know that we are at this turning point at this surge and there’s a lot of unknowns out there,” said Vt. House Speaker Jill Krowinski, D-Burlington.
Gov. Phil Scott this week said there’s no easy answer and that he’d be a willing partner to Pearce and the Legislature.
“What are we going to do to make sure we follow through on promises made and keep the fund solvent,” said Scott, R-Vermont.
Pearce agrees that it’s a difficult conversation but she says it needs to be dealt with this year.
“This is painful for everyone in this office as well,” she said. “We need to address it now so it isn’t worse in the future.”
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