A last-minute overhaul proposed for the State of Virginia's $54 billion pension fund has received the wrath of local cities, employee groups and teachers, according to the Washington Times.
Benefits would be truncated and, beginning in 2014, the state would switch to a hybrid pension plan combined with a 401(k)-styled savings plan, all part of a proposal which has been passed by the General Assembly.
Virginia's pension system is currently running a $24 billion deficit. Critics, such as Delegate Jennifer McClellan of Richmond, not that the legislature has only funded the retirement system at a prescribed rate two times in the past two decades.
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"We keep passing the buck, and ultimately someone's got to pay the bill," she told the Times. "And I don't think it's fair to expect state employees, local employees and local governments to pay it."
While the reforms will require the state to speed up its contributions to fund the system, they will also reduce benefits to employees hired in the last five years, and switch post-2014 hires to the new, hybrid system.
The changes also ask for local employees to pay a 5-percent contribution into the system, to be offset by a 5-percent raise.
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