Alexandria - In light of the $17.6-billion shortfall in Virginia’s pension trust fund, Delegate David Englin (D-45) today announced he will introduce an amendment to Virginia Constitution to ensure the Commonwealth can meet its future legal and financial obligations to state and local employees. The “Virginia Retirement System Lock Box Amendment” is intended to prevent the General Assembly from raiding the pension trust fund as a way to balance the budget, as it did earlier this year.
“There will be a lively discussion about proposed changes to the Virginia Retirement System during the upcoming General Assembly session, but hopefully we can all agree on the importance of ensuring the system is solvent over the long term so we can meet our legal and financial obligations to the teachers, firefighters, law enforcement officers, and other state and local employees who serve us so well,” said Englin. “I have reached out to all of my colleagues in the House and the Senate — Republicans, Democrats, and Independents alike — urging them to sign on to what should be a bipartisan effort to manage our finances responsibly, meet our obligations, and protect Virginia’s triple-A bond rating.”
In order to ensure the future solvency of the Virginia Retirement System, the “VRS Lock Box Amendment” would:
- Require the General Assembly to contribute to VRS at the level recommended by the VRS Board of Trustees unless a fourth-fifths vote in each house approves otherwise.
- Require that the forgone contributions be repaid with interest within 10 years, in the event that the General Assembly does, by a fourth-fifths vote, contribute at below the recommended level.
- Establish criteria for the VRS Board of Trustees to use to determine contribution rates, based on industry best practices.
- Phase in these requirements to account for the action taken in the 2010-2012 budget.
In April, the General Assembly passed a budget for the 2010-2012 biennium that deferred more than $620 million in state contributions to the VRS trust fund as an alternative to finding $620 million in additional cuts or $620 million in additional revenue to balance the budget. At the time, a number of legislators — including individuals who voted in favor of the budget — expressed concern about how this will impact the ability of VRS to meet future pension obligations. On Monday, the General Assembly’s Joint Legislative Audit and Review Commission confirmed those fears, revealing a $17.6 billion combined unfunded liability for state-supported pensions. Additionally, the Pew Center on the States released a February report downgrading Virginia for failing to adequately contribute to its pension trust fund.
Delegate David Englin is Vice Chairman of the House Democratic Caucus and is serving his third term in the Virginia House of Delegates, where he represents the 45th District, which includes parts of the City of Alexandria, Fairfax County, and Arlington County. An Air Force veteran, Englin is a graduate of the U.S. Air Force Academy and Harvard’s John F. Kennedy School of Government. He serves on the Finance Committee, the Health, Welfare, and Institutions Committee, and the Agriculture, Chesapeake, and Natural Resources Committee. For more information, visit http://www.davidenglin.org.