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Thursday, October 24, 1996
Support mounting for pension amendment
BY JEFF E. SCHAPIRO
Times-Dispatch Staff Writer
Public employees are mobilizing support for a little-noticed constitutional amendment on the Nov. 5 ballot protecting their taxpayer-backed pensions from politics.
The Virginia Alliance of State Employees, the Virginia Governmental Employees Association, the Virginia State Police Association and the Virginia Education Association are supporting the measure.
The first of five amendments on the ballot, the proposal puts the assets of the Virginia Retirement System off-limits to the General Assembly and governor by reconstituting the fund as an independent trust.
The measure is the last major reform of VRS generated by the legal and political controversy that engulfed the $22 billion pension system under former Gov. L. Douglas Wilder.
VASE said in a written statement yesterday:
''It is our belief that state employee retirement funds should not be subjected to the whims of those politicians who would use the retirement system to advance their own agenda without concern to the employees who rely upon this system for their livelihood.''
VRS trustee Edwin T. Burton III said of the amendment, ''It is a bipartisan effort to put some distance between the political process and the retirement system.''
VEA recently held a conference on steps it and some of the other groups are taking to ensure passage of the amendment, which has generated no organized opposition.
Since Labor Day, these groups have been promoting the amendment in their newsletters and distributing to members explanations on the measure's history and its features.
Under the amendment, the General Assembly retains its role as the custodian of the retirement system.
But the legislature, as well as the governor, won't be able to raid VRS for cash or deny it dollars that generally accepted actuarial principles dictate are necessary to keep the fund flush.
Had the amendment been in place in 1990, Wilder might not have been able to strip VRS of $50 million for future increases for pensioners to help close a $2.2 billion hole in the recession-wracked state budget.
However, the amendment does not fully shelter VRS from assembly dictates, which include setting benefits for pubic workers. Lawmakers potentially could force VRS to consider investment options it might otherwise ignore.
This is currently the case with a proposal by Del. Eric I. Cantor, R-Henrico, urging VRS to supply capital for Virginia start-up businesses.
But the amendment, which emerged from a study of the VRS by the Joint Legislative Audit and Review Commmission, the assembly's investigative arm, also designates the fund's nine trustees as fiduciaries.
That means they are legally bound to make sound investments solely for the benefit of government retirees.
As a result, the disputed acquisition of RF&P Corp. in 1990 might never have made it past the discussion stage. The real estate firm is about to be sold to a New York investment bank for more than $550 million.