JLARC Report on VRS

Rob Jones from VEA heard a recent JLARC presentation on VRS and its future. I'm copying the exact email Rob sent out in the hopes that you will have accurate, concise information. Keep in mind that JLARC is an audit and review committee. They do NOT create policy. However, they are listened to and respected in the General Assembly.

October 14, 2008

The Joint Legislative Audit and Review Commission presented their report entitled "Options for Total Compensation" on October 14th. The commission staff was doing what was asked of them, and we should not kill the messengers, but it is what we feared.

Before I summarize the implications of the report for school board employees, let me first expose a major flaw in the report when it is viewed from the public education perspective. For the state employees, the options were developed in the context of their total compensation package (salary, leave policies and health benefits). This was not true for school board employees. I thank Senator Edd Houck for pointing this fact out to his fellow commissioners.

The options contain new target salary goals for state workers, and leave purchase plans. In short, for state workers, there is sugar with the medicine. School board employees only get the medicine.

I'll try to summarize the options which will affect school board employees/VEA members.

First, it is important to understand that none of these options will affect folks who are already retired. The recommendations related to VRS are labeled "R" for retirement.

R1 - Impose an additional 2% employee contribution. This would be in addition to the 5% employee contribution now paid by your employee who also pays the employer contribution. This 2% might be phased-in .5% at a time in years when raises are granted.

R2 - Change the Cost of Living Adjustment (COLA) on retirement benefits by capping the increase at 4% a year rather than the current 5%. FYI - if, for purposes of illustration, you retroactively applied this change in the COLA to one who retired in 1978, the reduction in benefit would be 6% over the first 10 years and 12% after 30 years in retirement.

R3 - Increase the minimum retirement age for non-vested and new hires from 50 to age 60. Note: One becomes vested in VRS after five years of service.

R4 - For new and non-vested employees replace the Retiree Health Insurance Credit with Integral Part Trust (IPT) Accounts.

R5 - For new hires and non-vested employees combine a defined benefit (DB) and defined contribution (DC) plans. The DB plan would have a lesser benefit than the current VRS benefit. Employees would contribute to both. The COLA would only be included in the DB plan. This plan would provide 85% of the benefit in the current plan.

R6 - Require a Cash Balance Retirement Plan for new hires and non-vested employees. This is like a traditional defined contribution plan, except for the fact that a 5% return is guaranteed. Employees contribute with an employee match that increases with years of experience. There is no COLA on benefits. Entire balance can be withdrawn when separating from service.

R7 - Require a Defined Contribution Plan for new hires and non-vested employees. The matching contribution from the employer would increase with years of service. No COLA would be provided and the entire balance could be withdrawn when separating from service. Only two states now have this. The plan would provide 52% of the benefit value of the current VRS plan.

These options are not consistent with VEA's positions. As we await specific legislative proposals we will need your help with educating your colleagues regarding what looks like a battle ahead.

I have done my best to offer a concise and factual summary of the options that will affect school board employees. Additional information will follow.

Thank you,

Robley Jones

VEA GR

Carnival of the Blue

I received an email on September 26 from my friend Doris Boitnott* at VEA. Doris, who used to be a Uniserv Director here in Roanoke and a high school teacher in Roanoke County before that, has taken some flack over that email.

The email was in regard to an OBAMA BLUE DAY which was scheduled for September 30.

When I read this email, I chose not to pass it along to anyone in our organization. Very simply put, I do not believe that the RCEA should have a direct hand in organizing for or against any one political candidate. That is not to say that I believe teachers should surrender their political rights just because they are teachers either.

There has been local, statewide, and national attention given to the contents of the email, which I think is unfortunate. It's obvious to me that there are people and organizations with specific agendas who are trying to twist the meaning of the email content and capitalize on it for their personal gain. I find that deplorable.

Isn't it a bit ironic that with our educational system under stress in an election year, practically the first thing we hear about regarding education is this inflated story? I find that deplorable as well.

To each faithful member of our organization, I encourage you to exercise your right as a citizen of our country to wear whatever color shirt you desire.

Thom Ryder
RCEA President

* In an earlier version of their story, The Washington Times erroneously called Doris, "Debbie". In the current version, they misspell her name. "Dorris Boitnott, a VEA member and author of the e-mail, said that in hindsight she should not have paired the idea of supporting Mr. Obama with that of registering young voters. Mrs. Boitnott, who said she is not related to Kitty Boitnott, also said she had no intention of encouraging teachers to recruit students into a political campaign."