Vermont Lawmakers OK Pension Consolidation

March 10, 2005 ( - Vermont lawmakers have approved a move to combine their existing three state pension funds, which backers claim can save at least $1 million annually on money management fees.

A news report in the Montpelier (Vermont) Times Argus said supporters of the plan to put together funds for the state’s teachers, state employees and municipal employees also claim the setup will allow the state to make more “nimble” investment choices. The state House okayed the measure on Wednesday; state Senators already passed the bill earlier this year.

According to the news report, few in the Vermont House voted against combining the pension funds into a $2 billion fund; it passed easily in a voice vote. The only controversy was whether several elected and appointed state officials on the individual pension boards would have a role in choosing who represented members of the so-called “super board.”

As the bill is drafted, the eight-member board is roughly split between representatives elected by the employees on the lower boards and officials. A proposed amendment defeated by House members could have resulted in the administration having more control over the pension fund and the employees less, opponents of the measure said.

But representatives of the unions involved said the question was whether the Republicans and the administration of Governor James Douglas trust the union members to manage their own pensions. “Employees are smart and capable enough to send people who represent them to the board,” said Vermont State Employees Association executive director Annie Noonan, in the news report. “The administration was willing to risk $1 million because they think the employees … are too stupid.”