As Vermont state pensions deficits grow, task force seeks solutions

By Kim Jarrett | The Center Square

Deficits in Vermont’s state retirement accounts are continuing to grow and a committee tasked with addressing the shortfall is continuing its discussion on possible solutions.

The unfunded liabilities for the Vermont State Teacher’s Retirement fund increased last year by $379 million as compared to the 2019 valuation while the same liabilities increased by $225 million in the Vermont State Employees’ Retirement, according to numbers presented in a letter dated Oct. 29, 2021, from State Treasurer Beth Pearce.

Vote for Vermont/Pat McDonald

Vermont Treasurer Beth Pearce

“Pension costs have been growing much faster than the size of the overall workforce,” according to a presentation by Chris Rupe of the Joint Fiscal Office.

The Pension Benefits, Design and Funding Task Force is hearing from state officials and other stakeholders and will make recommendations to the Vermont General Assembly.

Lawmakers have been aware of the pension problems. Pearce proposed cuts to cost-of-living increases, also known as COLA, for future retirees before the 2021 legislative session but the Legislature did not act on her recommendations. Instead, lawmakers passed a bill creating the task force that Gov. Phil Scott signed.

“I was disappointed that the General Assembly was unable to make the needed legislative changes to reduce these liabilities,” Pearce said in her letter. “The Task Force must produce feasible recommendations and subsequently, the General Assembly must act this year. Each year we delay addressing the problem results in increased costs.”

Teachers and state employees are also worried about their future pension plans, according to testimony.

“All of my financial decisions have been based upon my compensation benefits – to retire with my pension promised to me when I signed my first teaching contract,” Amy Kahofer said in written testimony. “I’ve had no option but to contribute to this system. I support the idea of potentially contributing more to my pension system if necessary. I do not see how our elected officials have the right to change the benefits promised to me.”

The task force is considering another revenue source for the unfunded liability. Some of the suggestions included a wealth tax, sports wagering and revenue from cannabis sales. Legal cannabis marketplaces are expected to open in October 2022. The state has implemented a 14% excise tax and a 6% sales taxes.

As for sports wagering, it is still not legal in Vermont, however, a separate task force is studying the issue.

The task force is holding three more meetings on Nov. 10, 17, and 22.

Image courtesy of Vote for Vermont/Pat McDonald
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7 thoughts on “As Vermont state pensions deficits grow, task force seeks solutions

  1. This problem is not new. Before 2008, a number of States were on the brink of bankruptcy due to pension and retirement “underfunding.” Even private business did away with pensions in favor of 401K’s a long time ago. The Truth is the State is bankrupt. If it wasn’t for Federal welfare (aka taxpayer money laundered back to States) Biden bucks, and even more State taxation and fees, the State would be completely insolvent. Is it any wonder why we are called racists and climate deniers? It’s all a scam to keep people from realizing what is really going on –

  2. The first thing the State must do is get out of the investment advisor business. Everyone else abides by the investment adage that ‘past performance does not guaranty future results’. So why is the State making such an outragreous guaranty. The only reason it can is because taxpayers are tapped for the difference when ‘future results’ don’t meet guaranteed expectations.

    The State can reasonably match any investment the employee makes, to whatever proportion it deems reasonable. But it should be left up to the individual employee to determine how that nest egg is invested and accept responsibility for all future investment results, like all the rest of us do with our 401K programs and IRA programs.

  3. True leadership is about facing problems and making hard choices. While the current Democrratic leadership in the legislature did not create the pension crisis, they have, by ignoring even the modest suggestions proposed by Treasurer Pearce, added to it by the tune of over 100 million.

    The overreach of Climate Legislation combined with the underreach on the pension crisis provide an opportunity for Republican candidates willing to speak and lead with practical actions.

  4. They’ve been stealing from the pension fund for a long time with plans to pay it back yet somehow it never happens. Giant influxes of money that could refund the pension have arrived but instead, more new programs and wasteful spending. “Covid money”, which has been used for damn near everything BUT covid has been pissed away on a whole lot of nothing. I’m sure there’s still a bunch left that they are looking to spend on the next best liberal initiative. I have examples as I’m sure many of you do. The bottom line is they have no intention of making the fund whole, regardless of giant influxes of money from the taxpayers of this country. They will move the goalposts again in the name of social programs and waste, the Democrat way. We’ll bitch back and forth because the people that need to read these articles never see them, unfortunately.And…. the beat goes on….

  5. I heard a while ago from a “good source” that the stste retirement fund has been like a bank for pet projects for a few in the higher seats to the tune of 5 Billion bucks? kinda like Social Security, where they “borrow” and never pay it back??? Someone might wanna look into it ?

  6. Vermont’s unfunded liabilities shouldn’t be an issue because all we have heard the last few
    years are all the great profits coming from ” Legal Cannabis “, I think the legislators were trying
    out the goods…

    So with the state’s unfunded liabilities, which increased to the tune of $600M just last year, we
    are surely going to need to sell tons, tons of POT to stop that financial bloodletting.

    Legislators under the ” Golden Doom ” yes doom, are not problem solvers, but they are problem
    generators , they are really clueless !!

    • Yeah CH, pot but not petroleum.. I’m pretty sure they “divested” from the
      petol stock because gorebull warm mongering.. probably any Israel based
      stock as well I would imagine because they support terrorist pali not a country…Great bunch to have managing your portfolio…

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