To save Virginia retirement fund, Governor asks state workers to pay more

Posted at 8:51 AM, Jan 12, 2012
and last updated 2012-01-17 13:52:10-05
RICHMOND, Va. (WTVR) - Virginia Governor Bob McDonnell announced Thursday his plan to fund the Virginia Retirement System (VRS). The Governor's plan would increase the amount of money some state workers pay towards the VRS by 1 percent over the next two years. The Governor said the increase would be off-set by a 3 percent performance bonus proposed for 2013.The proposal is the highest contribution to the state’s retirement system-ever.  He is proposing the state contribute up to $2.2 billion dollars to the system and now he wants state employees to make a similar sacrifice.

The average state employee makes $38,000 a year, so, an increased contribution of one percent would mean $380 more per year.

Executive Director of the Virginia Governmental Employee Association, Ron Jordan, tells CBS 6 that he is against the increase. Jordan says he considers this a pay cut at a time when the governor also wants employees to pay a higher healthcare premium.

The state’s Secretary of Finance, Rick Brown, says shoring up the retirement system will eventually be offset by a 3% pay increase.

The Governor said both state workers and state government must contribute more towards the VRS in order for there to be money available for retired state workers.

Under the Governor's plan teachers, judges and local employees would be exempt from the increase VRS contribution.

“It seems like a tight squeeze now, but, later on down the line you're going to benefit for it,” said state employee Laquanda West.

The Virginia General Assembly must sign-off on the Governor's plan before it would be inacted. [CLICK HERE: Read more about Governor's plan to save the VRS]