The last thing you do in the middle of a crisis is kick the can down the road. Yet, that’s exactly what the legislature just did on Vermont’s mounting pension liabilities.
Earlier this year, State Treasurer Beth Pearce delivered a long overdue message to the legislature — calling for painful cuts in order to keep the state employees’ and state teachers’ pensions operation. This comes years after resisting calls for structural reform to the pension system.
However, the treasurer deserves recognition for having the courage to at least present a plan. The legislature did too — with leadership in the House Government Operations Committee unveiling its own similar plan.
Author(s): Don Turner
Publication Date: 14 April 2021
Publication Site: Bennington Banner
Vermont Treasurer Beth Pearce released a report containing recommendations that she said could reduce pension UAAL for the Vermont State Employees’ Retirement System (VSERS) and the Vermont State Teachers’ Retirement System (VSTRS) by $474 million and reduce the actuarial determined employer contribution (ADEC) by $85 million.
“While shy of the total target of $604 million in the UAAL and $96.6 million for the ADEC, it is a significant reduction to the existing liabilities and costs to the taxpayer,” said the report, which added that the net other post-employment liabilities could be reduced by $1.68 billion by directing a “minimal amount” of funds for prefunding. “All in, these recommendations will reduce the state’s post-employment liabilities by $2.2 billion.”
Author(s): Michael Katz
Publication Date: 21 January 2021
Publication Site: ai-CIO