• Latest

Vote For Vermont: Vermont’s Pension Crisis

July 5, 2018
East Montpelier Student Lands Opportunity at Tech Company

East Montpelier Student Lands Opportunity at Tech Company

June 28, 2022

U.S. Supreme Court Reversal of Roe vs. Wade is a Devastating Blow to Reproductive Rights

June 28, 2022
Just Some Thoughts

I Hate Painting!

June 28, 2022
African Queen (1951)

The Conversation (1974)

June 28, 2022

Central Vermont Council on Aging (CVCOA) Offers Special Memorable Times Online and Ageless Grace/Memory Café Reunion in July 

June 28, 2022

Upper Valley Everyone Eats Returns to Gifford in June

June 21, 2022

Vermont’s COVID-19 State-Run Testing Sites to Close June 25

June 21, 2022
Lenny’s Raises $1,250 in May in support of American Stroke Awareness Month

Lenny’s Raises $1,250 in May in support of American Stroke Awareness Month

June 21, 2022
African Queen (1951)

Pistol

June 21, 2022
“Mr. B” Retiring After 30 Years at Nelson Hardware If He Can’t Fix It, It Can’t Be Fixed

“Mr. B” Retiring After 30 Years at Nelson Hardware If He Can’t Fix It, It Can’t Be Fixed

June 21, 2022

Secretary of State Candidates Forum

June 14, 2022

Planned Parenthood of Northern New England Announces Sustainability Plan to Meet the Challenges of the Moment

June 14, 2022
  • Home
  • Disclaimer
  • Privacy
  • Sitemap
Monday, July 4, 2022
The World Online
Advertisement
  • Home
  • News & Features
    • Local News
    • Letters & opinions
    • George Shuman
    • Max’s View
    • Local Sports & Outdoors
    • Births
    • Weddings & Engagements
  • Calendar
    • Art Exhibits
    • Calendar of Events
    • Ongoing Events
  • Obituaries
  • Submit
    • Submit Calendar Listing for Non-Profit Events
    • Submit An Article To The World
    • Submit Letter To The Editor
    • Submit Sports News/Photo
    • Submit Birth Announcement
    • Submit Engagement Announcement
    • Submit Wedding Announcement
  • Advertising
    • World Rates and Ad Sizes
    • World Distribution Map
    • World Deadlines
    • Audit and Reader Surveys
    • Advertising Inquiry
  • Classifieds
    • Place Classified Ads
    • View Current Classifieds
  • About Us
  • Contact Us
No Result
View All Result
  • Home
  • News & Features
    • Local News
    • Letters & opinions
    • George Shuman
    • Max’s View
    • Local Sports & Outdoors
    • Births
    • Weddings & Engagements
  • Calendar
    • Art Exhibits
    • Calendar of Events
    • Ongoing Events
  • Obituaries
  • Submit
    • Submit Calendar Listing for Non-Profit Events
    • Submit An Article To The World
    • Submit Letter To The Editor
    • Submit Sports News/Photo
    • Submit Birth Announcement
    • Submit Engagement Announcement
    • Submit Wedding Announcement
  • Advertising
    • World Rates and Ad Sizes
    • World Distribution Map
    • World Deadlines
    • Audit and Reader Surveys
    • Advertising Inquiry
  • Classifieds
    • Place Classified Ads
    • View Current Classifieds
  • About Us
  • Contact Us
No Result
View All Result
The World Online
No Result
View All Result

Vote For Vermont: Vermont’s Pension Crisis

vt-world by vt-world
July 5, 2018
in Community
0

On April 9, 2018 David Coates, retired managing partner at KPMG visited Vote for Vermont to talk to Ben Kinsley and Pat McDonald, co-hosts and co-producers of the show. about the unfunded liability of the teachers’ and state employees’ pension plan to include health benefits. Just for clarification “unfunded liability” means that the fund does not have enough assets to cover its liability. This is not the easiest subject to discuss so I am going to take quotes from Commentaries that David Coates has written over the years about this issue but I would encourage you to go to vote802.com or youtube.com (voteforvermont) to see this show for yourselves, especially if you are a member of either pension plan.

“The 2017 actuary’s reports show that Vermont’s combined unfunded liability has increased by over $900 million (over 25 percent) in just one year. So as of June 30, 2017, our unfunded liabilities stand at $4.5 billion, an amount that is now three times our general fund revenues and seven times our bonded indebtedness. In other words, this is the biggest liability the state owes, is more than all of our other liabilities combined, and overwhelms the state’s balance sheet.”

“Fortunately, the state is now making the Annual Required Contribution (ARC) recommended by the actuary for at least the pensions. Remember these payments are based on what is likely an understated unfunded liability. The state has made the annual required pension payments for several years now and, in 2017 that payment was $137 million. The annual required payment for 2019 is $177 million, an increase of $40 million or 29 percent in just two years. Non-payment of the required pension payments may result in a lowering of our bond rating by Wall Street which would have serious implication on municipalities, housing loans, VSAC and other areas. NOTE: Rough estimate of $30M put aside in third 2019 budget for Teachers’ Pension from one-time money, carry-forward and revenue upgrade.

“To compound matters, another problem is likely to occur soon, which relates to the assumption used by the state for the return on the pension investments. In 2016 the assumption was 7.95 percent and in 2017 it was lowered to 7.50 percent. This assumption is still high compared to other states who are moving their rates to 7 percent and lower.”

David Coates has been sounding the alarm about this issue for over ten years. In 2009 the Legislature created the Commission on the Design and Funding of Retirement and Retiree Health Benefit Plans for State Employees and Teachers. David was asked to serve on this Commission and explained on the show the 10 recommendations that were issued in a report in 2010. We talked about one recommendation in particular which was to replace the current defined benefit plan with a defined contribution plan. Governor Douglas began talking about this concept and received strong pushback from the VSEA. David noted that perhaps a defined contribution plan could be offered on a voluntary basis or made mandatory for all new employees. It is currently available to exempt employees within state government. Any shift in employees from one plan to the other would go a long way in alleviating the current stress on the plans. In addition to the recommendations contained in the 2010 Commission Report, David reiterated several other recommendations that deserve consideration. A defined benefit plan is a type of pension plan in which an employer/sponsor promises a predetermined pension payment upon retirement. A defined contribution plan such as a 401(k) plan, is a plan in which the employee elects to defer some amount of his/her salary into the plan along with a set contribution from his/her employer in some cases and bears the investment risk.

David noted that, “several positive changes have been accomplished over the last few years. However, a major structural overhaul is the only solution to this growing fiscal problem. If not addressed now, then we will be shifting these high costs to future generations and more of our annual spending will be diverted from other important programs to these legacy costs.”

As noted above, there is a lot more detailed information shared in the video, not all included in the above summary. If you would like to see the entire show go to vote802.com. Any rebuttals or additional comments are welcome and can be expressed on the websites and Facebook pages of VFV and Campaign for Vermont or through email at voteforvermont@gmail.com.

The above piece was authoried by Pat McDonald, Vote for Vermont.

Previous Post

Sharing Your Care: Planning Ahead Legally

Next Post

Guest Statement by Gordon Bock of Northfields: End The Divisiveness, Conflict, and Strife

Next Post

Guest Statement by Gordon Bock of Northfields: End The Divisiveness, Conflict, and Strife

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This Week’s Ads

  • Home
  • About Us
  • Disclaimer
  • Privacy
  • Sitemap
The World
403 US Route 302
Barre, VT 05641
Phone: (802) 479-2582

Copyright © 2019 The World Online. All Rights Reserved. Powered by CoolerAds.

No Result
View All Result
  • Art Exhibits
  • Audit and Reader Surveys
  • Births
  • Calendar
  • Contact Us
  • Daily Horoscope
  • Food & Recipe
  • Home
  • Obituaries
  • Ongoing Events
  • Pay Your Bill Here
  • Senior Living Edition
  • Showtimes
  • Submit Birth Announcement
  • Submit Calendar Listing for Non-Profit Events
  • Submit Engagement Announcement
  • Submit Listing to our Local Directory
  • Submit Sports News/Photo
  • Submit Wedding Announcement
  • Summer Guide
  • Testimonials
  • The World Coupons
  • Weather Forecast
  • World Deadlines
  • World Distribution Map
  • World Rate Card
  • World Rates and Ad Sizes
  • Disclaimer
  • Privacy
  • Sitemap
  • About Us
  • Vermont Lottery
  • Advertising Information
  • The World Staff
  • Advertising Inquiry
  • Submit Letter To The Editor
  • Local Directory
  • Poll Results
  • Local Deals
  • Classifieds
  • Submit An Article To The World
  • Events
  • The World – This Week’s Online Digital Edition
  • The World Auto & Sports

Copyright © 2019 The World Online. All Rights Reserved. Powered by CoolerAds.

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In