The university’s board of visitors will consider a proposal to ask the General Assembly to eliminate the requirement for creating a new kind of retirement plan for state and local employees hired after January 1, 2014, the Richmond Times-Dispatch reports. The provision would require universities to pay the difference between the pension contribution rates set by the assembly and the contributions that universities make for employees in optional retirement plans established under a state law that allowed them to restructure for more autonomy.
The University of Virginia says it should not have to pay a surcharge on those employees — estimated at about 200 in key administrative positions that are now part of the Virginia Retirement System — because of the autonomy granted by the state to the university, as well as Virginia Tech and the College of William and Mary, to establish their own personnel systems, according to the news report.
The university is even more concerned about a second provision allowing VRS to require a surcharge for all employees in optional retirement plans, including faculty who never have been part of VRS, have not contributed to the system’s unfunded pension liabilities, and would not receive fixed benefits in retirement. That provision could apply to optional retirement plans at all public institutions of higher education, as well as the University of Virginia Health System and the Virginia Port Authority.
The proposal before the board would ask lawmakers to strike both provisions from the law.
Robert P. Vaughn, staff director of the Appropriations Committee said his concern is the potential for universities to move large numbers of employees from VRS into independent retirement plans, leaving employees of other state agencies the burden of paying accumulated liabilities in the state employee pension plan.He concedes that the University of Virginia has valid concerns about having to pay a surcharge for faculty and other university employees already participating in optional defined contribution retirement plans who have not contributed to liabilities for fixed pension benefits.