State Retirees’ Pension Is Fully Funded for 2021: We are pleased to report that the Legislature and the Governor have agreed to fund the Retirement Board’s annual actuarial funding request at the full recommended level for 2021. VRSEA thanks State Treasurer Beth Pearce and Governor Phil Scott for their support of state retirees and the state retirement pension system. VRSEA has been concerned that the pension funding requirement might suffer from the state’s economic turndown resulting from the Covid-19 virus. We are very appreciative that this did not happen.
Another piece of good news concerns the funding of the Future Retirees’ medical benefit unfunded cost liability. Up until now, current retirees’ medical coverage cost for the state has been on a pay-as-you-go basis. However, for future retirees, some state funds have been set aside. Funding a pay-as-you-go system and also accumulating significant funds to transition to a pre-funded OPEB (Other Post-Employment Benefits) system, has been difficult. Language included in the Fiscal Year 2021 Budget Bill will allow the Treasurer to invest the accumulated OPEB funds for future retirees in the same manner as the pension funds. This allows a higher rate of return, to help achieve pre-funding of the future medical liability sooner, and knock a significant portion of liabilities off the books. We owe a debt of gratitude to Treasurer Beth Pearce, who has been fighting for this change for years!