MONTPELIER – On Thursday, a task force aimed at addressing Vermont’s pension crisis for state employees and teachers outlined its recent findings as Vermont lawmakers prepare to tackle the issue this upcoming session.
Unfunded liabilities in Vermont’s pension system are projected to increase by over $600 million between state employees and teachers next year, according to the Pension Benefits, Design and Funding Task Force.
The task force’s final report with recommendations for the Vermont Legislature is expected by December. Task force member Kate McCann said the panel has been guided by several key principles.
“Honoring state commitments to employees, pension system sustainability, minimizing impacts of any changes to employees who are near retirement, making no changes to already retired employees, and ensuring that employees don’t have to work longer to qualify for a benefit,” McCann said.
The task force was created after lawmakers’ initial plan to address the crisis was met with widespread backlash from state employees and teachers. It would’ve cost both groups millions, while likely delaying some retirements and cutting benefits.
The latest report from the task force details how the funding gap has widened since the 2008 recession:
“Part of the way that we got here was underfunding, particularly with the teachers’ system for many, many years,” said Rep. Tanya Vyhovsky. “One way that we can really ensure that doesn’t happen again is to have a dedicated revenue stream. So, I do think that’s incredibly important as we move forward to really think about where that comes from and how we do it to ensure the system really is sustainable.”
McCann, who is a teacher in Montpelier, said the state should throw as much one-time funding as possible toward pensions, using Vermont’s rare budget surplus to bring stability to the situation.
The previous plan that received backlash would’ve had teachers working longer into their retirement, but that concept hasn’t been scrapped completely.
“We’ve also looked at ways to incentivize people to work just a little bit longer if they choose to,” McCann said. “This must be a choice, and would be awarded with some additional benefit.”