Vivian Paige’s post regarding the Virginia Retirement System prompted me to seek clarification from Del. John Cosgrove as both a blogger and his constituent.
When she boldly proclaims the reform is “not gonna happen”, she’s jumping to conclusions about Cosgrove’s remarks.
On Friday, the governor proposed as a budget amendment:
Reform of Virginia’s Retirement System (VRS) requiring all state employees to contribute 5% to their retirement plans. The reforms will put over $300 million in additional funds into the VRS system in FY 2012 alone and will add $4.2 Billion over the next 10 years. The employee contributions will be matched with a 3% pay raise.
The dilemma though is that the state has been funding employee contributions to their pension since 1983 (See Virginian-Pilot)
Cosgrove sees this as a moral obligation to current state employees to remain faithful to the agreed upon terms of retirement system – the agreement employees were hired under and have grown accustomed to expect. But he has no problem changing the system for new employees – something the federal government also did in the 1980’s when it reformed its pension system.
“Governor McDonnell has floated the idea of giving a raise to current employees prior to imposing the new system, and there might be some merit in that method to reduce the negative financial impact on the individual employee,” Cosgrove wrote me via email. “We will have to wait and see what the real numbers are before making a decision.”
Which means that he’s still open to the possibility of VRS reform, but, as with most of the budget amendments or any proposal from the governor, it will undergo the necessary scrutiny from the General Assembly. That’s why we send them there.
