Vermont lawmakers are pushing a plan to reduce a widening shortfall in the state’s retirement systems by asking teachers and state employees to pay more into their pension plans and work more years.
During a March 24 meeting, the Vermont House Government Operations Committee proposed teachers base contribution rates be raised by 1.25% to 2.25% and that most state employees be increased by 1.1%, according to a proposal posted on the Vermont General Assembly website.
The proposal also bumps up the age at which most workers can qualify for retirement benefits, requiring them to reach full Social Security retirement age, which is currently 66 or 67. Some groups of teachers and state employees can now retire as early as 62 or with 30 years of service.
In addition, employees will receive a lower overall benefit as it would be based on the average of their seven highest consecutive years of salary rather than the three highest as is now the case, according to the proposal.
Author(s): Margarida Correia
Publication Date: 29 March 2021
Publication Site: Pensions & Investments