(Host) Two large groups have joined together to protect Vermont’s public pension system from significant changes.
But AARP-Vermont and the state’s Teachers Association say some changes to the current system are needed.
VPR’s Bob Kinzel has more.
(Kinzel) A special commission is meeting this fall to look at this issue because it’s estimated that Vermont has a one billion dollar unfunded liability in its retirement programs for state employees and teachers.
Here’s the problem – 25% of all state workers and teachers will be eligible for retirement in the next 5 years but the Retirement Funds have lost a significant amount of their value during the recession.
Vermont Treasurer Jeb Spaulding says these Funds are no longer sustainable and that the state would have boost funding levels by 50% to meet current obligations – next year an additional 35 million dollars would be needed.
Speaking on VPR’s Vermont Edition, Spaulding said not dealing with this issue will place the future of these two funds in jeopardy:
(Spaulding) "I think no action is the surest route to undermining the long term solvency of the retirement systems and the surest route to undermining the retirement security for future teachers and state employees."
(Kinzel) Spaulding says his commission is looking at several changes for the funds and he says the changes won’t affect individuals who are currently drawing retirement benefits.
Those options include; asking employees to make larger contributions, raising the age of retirement, reducing benefits levels or shifting to a different retirement model.
AARP president Jim Leddy says he understands the financial pressures facing the retirement Funds but he doesn’t want to see younger workers pitted against older workers:
(Leddy) "I think there’s a real risk when we get into what I would describe as generational warfare, essentially making choices — if you’re retired now you’re fine, if you’re 2 or 3 years no problem. But those of you who are younger in the workforce, those of you who have yet to join the workforce whether as a teacher or state employee in other areas, we’re going to look at you very differently."
(Kinzel) But Spaulding says intergenerational stresses already exist in the current system:
(Spaulding) "Talk about intergenerational unfairness we’re doing in this country and to the people in Vermont, of saddling future generations with debt that we don’t want to take care of today, is unconscionable."
(Kinzel) The commission is scheduled to hold a public hearing on its preliminary recommendations next month. It will then present a final report to the Legislature by the end of the year.
For VPR News I’m Bob Kinzel in Montpelier.