Vermont’s largest union says the state should invest federal pandemic dollars in its pension system. Specifically, to reduce its unfunded pension liability.
The Vermont-National Educational Association says using federal dollars would ensure public employees and educators get the financial security they’re promised for retirement. But Darren Allen, Vermont-NEA Communications Director assures: this isn’t a crisis.
“The pensions are in no danger of going out of business. The pensions are in no danger of not meeting their obligations.”
Allen says the issue has more do with underfunding in the last two decades.
“The head of Vermont Pension Investment Commission said that that underfunding has led to a loss of a billion dollars,” said Allen.
Which is why the Vermont-NEA says it only makes sense to distribute federal funds to invest in other state priorities.
“With unprecedented amounts of federal money and really strong growth in tax base, it looks as though Vermont is in a really good position to take care of other obligations that it has while at the same time investing in important things like broadband and housing and early-childhood education,” said Allen.
These funds could benefit teachers, troopers and state employees who were promised a secure and funded retirement. Governor Phil Scott wasn’t available for comment but his press secretary wrote quote:
“Some federal money has been set aside, but the governor continues to believe that structural changes are necessary to ensure the long term sustainability of our pension system.”
He added, a study committee, established by the legislature this year, will be meeting this summer to come up with recommendations ahead of the next legislative session in January.
The Vermont-NEA also mentioned that strengthening pension systems with these federal dollars could help address statewide teacher shortages by recruiting and retaining employees.