Legislative Pension Task Force Reaches Framework for Strengthening Teachers’ Pension
IMPORTANT UPDATE: Read the latest on the pension package's legislative progress right here.
Did you miss our telephone town hall with your pension team? No worries! Check out a recording right here.
On January 10 the legislature’s pension task force – including three of your fellow members – agreed on a path forward to strengthen the teachers’ pension. Those members – Andrew Emrich, Kate McCann, and Molly Stoner – have worked tirelessly for nearly eight months to help craft an approach that allows Vermont to keep its pension promise to our teachers.
Andrew, Kate, and Molly prepared a short video to give you more details of what the agreement means for the teachers’ pension.
In short, the framework agreed to by the legislature’s task force calls for:
- An unprecedented one-time payment from the state of $125 million towards the system’s unfunded liabilities, acknowledging the state’s role in that liability.
- An unprecedented commitment in statute to pay all future regular costs of the pension, plus an annual commitment of an additional $15 million– including 25 percent of any state general fund surplus– to further reduce the unfunded liability
- An unprecedented move toward prefunding retiree healthcare benefits, including $13 million in one-time money and more than $40 million annually
- A gradual, progressive increase in teacher contributions; please click here to see what that means for different income levels
- A path toward a higher retiree cost of living adjustment that eventually converts the current COLA level of 50 percent of inflation to 100 percent of inflation. COLA payments won’t be made for the first 24 months of retirement. After that, the 50 percent of inflation COLA will apply. Once the system reaches 80 percent funded, COLA payments will begin an incremental increase to reach 100 percent of inflation.
What this framework doesn’t do is enact the draconian recommendations floated last year: no increase in the retirement age; no lower retirement benefit by diluting the average final compensation calculation; no increase in vesting; and no change to a 401-k defined-contribution scheme.
We know you’ll have questions, and that’s why your team will give you an opportunity to talk to them directly. Andrew, Kate, and Molly worked alongside our own member-driven internal pension task force, our dedicated local pension organizers, and Vermont-NEA staff. Please stay tuned for more details soon. In the meantime, here's some useful information:
NEW! Listen to the Jan. 24 Telephone Town Hall with your pension team.
UPDATED! How this framework compares to previous draconian proposals
NEW! Downloadable Personal Pension Contribution Calculator
NEW! Pension Framework at a Glance
UPDATED! Chart of contribution adjustments and examples
NEW! Powerpoint presentation for Local Association Pension Organizers
Final Report of the Legislative Pension Task Force
Portion of final report that discusses teachers' pension framework
Chart, without retiree healthcare details.