According to The News & Advance of Lynchburg, the state legislature committed itself over the next eight years to fully paying the contributions to state employee and teacher pensions the Virginia Retirement Systems (VRS) deems necessary to meet retirement obligations to employees.
The changes to the retirement systems are part of two bills adopted in each chamber. The bills will require teachers and local government employees to pay 5% of their salary to retirement, and require localities to offset the contribution with raises.
There will also be a mandatory retirement plan for most state and local employees hired after January 1, 2014, that will combine reduced retirement benefits with a 401(k)-style contribution plan that the state will help fund (police, fire and other public safety workers are exempt). Existing retirement benefits will be reduced, including a cap on cost-of-living adjustments (COLAs) for state and local employees with less than five years of service.
The bill will also force the state to fund rates certified by the VRS Board of Trustees on a graduated scale over the three two-year budgets starting on July 1, 2014, the news report said.
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