Scott says the bipartisan pension paydown plan doesn’t go far enough
MONTPELIER, Vt. (WCAX) - Vermont Gov. Phil Scott is raising the red flag on a pension reform plan aimed at shoring up a $3 billion shortfall.
The pension bill is based on recommendations from a key task force formed last summer after a previous plan was met with backlash from state employees and teachers. The taskforce included representation from the House of Representatives, the Senate, the Vermont State Employees Association, the Vermont branch of the National Education Association and the Scott Administration.
Under the proposal, future retirees pay slightly more into the system, it modifies the cost of living adjustment and also invests $200 million in one-time dollars.
The governor says the plan doesn’t go far enough and kicks the can down the road.
He wants new state employees to be able to choose a defined contribution plan, similar to that of a 401(k), along with the current plan.
Economists say with inflation, the proposal’s assumed rate of return and future recessions, Vermonters will have to make challenging decisions in five to 10 years.
“Don’t force the people, let them make the choice whether they want the union plan or a plan that they can take with them. Of course, that benefits the state of Vermont because we won’t have as many people in the expensive plan,” said David Coates, a financial expert.
Top lawmakers have said that the bill also creates a working group that can consider future changes to pension reform.
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