Task force announces deal to fund Vt. employee, teacher pensions

Published: Jan. 11, 2022 at 6:07 PM EST
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BURLINGTON, Vt. (WCAX) - Vermont lawmakers, state employees, and teachers have reached an agreement that could save two state pension programs from future insolvency.

It took seven months, 17 meetings, and hundreds of hours of work to get there, but officials say if all goes according to plan, the state employee and teacher pension plans could be fully funded by 2038.

Democrats floated a plan last spring but unions shot it down. That led to the task force of lawmakers and union members coming together to hammer out the proposed deal. Under the plan, workers would pay slightly more into the fund while receiving slightly fewer benefits. The changes would not affect current retirees and beneficiaries. The state would provide a one-time $200 million payment using General Fund money and commit to contributing 50%t of future General Fund surpluses to help close the $3 billion shortfall. Union membership would not get to vote on the plan.

Andrew Emrich, a kindergarten teacher at Brookside Primary School in Waterbury and a member of the task force, says this plan will help with the retention of current teachers and hopefully encourage more people to become educators. “This is a really critical moment in the state of education and the future secure retirement for our teachers. So, to be able to have that locked up and know that our pension is going to be there for us for decades to come it’s really exciting,” he said.

The Vermont State Employees Association’s Seve Howard says they like the deal too, especially because it was struck with teachers and state workers at the negotiating table. Still, Howard says there is one element they are still working on to further incentivize people to work in prisons and the Vermont Psychiatric Care Hospital. “We are in such a serious staffing crisis there that that’s not an option that would be nice to do that has to get done because someone is going to get hurt if we don’t start to staff these facilities adequately,” he said.

Senate President Pro Tem Becca Balint, D-Windham County, said she’s very happy with the way that the parties worked to arrive at a compromise that suits both sides and also helps close gaps in funding. “It was taking the time to really listen deeply to what the concerns are for the union, making sure we heard all the input that we needed to make a wise agreement that was really a package we can all get behind,” she said.

When asked about the plan at Tuesday’s media briefing, Gov. Scott says he needs to make sure it is sustainable and viable before signing off on it. “This has a long way to go but I want to reiterate that I’m encouraged to see there is some progress because it’s essential, because it’s a billion-dollar problem we have on our hands and we need to take some action,” he said.

The state didn’t get into this problem overnight. Underfunding the Vermont state employees and educators’ pensions began decades ago and three factors made it even worse -- the great recession, increasing health care costs, and more retirees living longer.

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