The Virginia General Assembly just couldn’t help itself. It had to put the sticky fingers into the pension fund before closing for the session.
The State of Virginia is helping itself to more than $620 MILIION that belongs in the state pension fund, VRS, to pay pensions to state employees, some county employees and teachers. Virginia must begin to pay back the money by 2013 at an interest rate of 7.5% over 10 years.
Predictable. So the state who must have a balanced budget doesn’t really have one and the Emperor has no clothes. According to the Richmond Times Dispatch:
The provision, sought by the state Senate and included in the joint budget adopted by the General Assembly yesterday, is aimed at easing jitters over the decision to defer state and local payments to pension plans for the portion of future retirement liabilities that aren’t funded by the system.
Sen. Walter A. Stosch, R-Henrico, called the provision the most important step taken by the assembly to protect the retirement system, even as it relies on deferred pension contributions for almost one-fourth of the money used to balance the two-year budget.
“I don’t want anybody to feel that their pension is in jeopardy, because it isn’t,“ Stosch said yesterday. “But we’re recognizing the unfunded liability and requiring it to be repaid.“
But that wasn’t the only important step taken by the legislature to guard the $48 billion retirement system. It also adopted a package of changes that will lower the cost of pensions for future employees by more than $50 million in the next two years and $3 billion over a decade.
The above sounds like politico-speak for “I’m from the government and I am here to help you.” The warm, fuzzy feeling just isn’t there if you have anything to do with the $48 Billion VRS. This sounds like the government doing what the government does best: Robbing Peter to pay Paul. However, there is no free lunch. Retirement ages will increase and a greater part of employee contributions will come of the the employee’s pocket.
This house of cards doesn’t sound like the foundation is real firm:
House budget officials had argued that the deferral would not harm the retirement system because of benefit changes that would reduce long-term costs and a likely recovery of stock market investments.
The VRS lost 21% of its assets during the free fall of 2008. Actually, it ended up better than most individuals. However, I don’t think our lawmakers should be gambling pension money away on the shaky premise that the stock market earnings are going to take up the slack.
Part 2 will continue when more unfolds about the great robbery of 2010. (subtitle: Public Employees: This will only Hurt for the Rest of Your Lives) They just couldn’t keep their grubby mitts out of the pension fund. News is sketchy at this point on the great robbery. If the Washington Post even mentioned it, I didn’t see it. The budget news is overwhelmingly horrible.
NOT ANY MORE. DADDY HAS HIS HAND IN THE POT.
