 |
|
|
|
|
|
|
|
|
|
|
|
 |
|
||||||||||
 |
 |
 |
|
||||||||
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
|
 |
 |
 |
 |
 |
|
||||||
The Daily Progress
May 29, 1999
By BOB GIBSON
Daily Progress staff writer
Virginia’s taxpayers are about to save $70 million thanks to a bull market on Wall Street,
according to the Virginia Retirement System. The market has performed so well that the
VRS has cut the cash contributions that local governments and the General Assembly will
have to make, starting July 1, to fund the taxpayers’ share of providing pensions for
90,000 retired employees.
“It’s really important news for localities,” said Edwin T. Burton III of Earlysville, chairman of
the VRS board of trustees. He said the nine VRS trustees unanimously
recommended a reduced contribution rate for state and local governments even though
retirement benefits are increasing by 2 percent and health coverage is increasing.
“We don’t anticipate turning these rates back around,” Burton said. “The plan is these are
lower rates we can stick with.”
Virtually every locality gets a reduction in its contribution rate, and 46 counties will pay
nothing at all, Burton said. The reason is a healthy stock market. Cash
contributions to the pension fund can be cut because investment returns have done so well
and the VRS has had 70 percent of its investments in stocks, most in U.S. equities.
The VRS has managed its funds to make huge profits in recent years, including a $4.1 billion
profit in 1998, and has more than doubled its holdings in five years to $34.5 billion as of
May 1, Burton said.
Burton said the retirement system is prepared for weak markets, should they occur.
The VRS will be totally funding the health care credits and the cost-of-living increases that will
kick in this year, he said. The state pays the employee share and the
employer contributions for state workers and the increases in cost-of-living allowance are
being fully funded for the first time in 20 years, he said.
“We are pleased to report, given the strong investment returns of the recent years, the
commonwealth has now achieved full funding of the COLAs,” Burton wrote Delegate V. Earl
Dickinson, D-Mineral, and three other money committee co-chairmen. “This is a significant
financial milestone and needs to be celebrated accordingly.”
“It’s good for fiscal soundness,” Burton said. “It’s good for employees and it’s good for
taxpayers.”
The VRS now receives about $1 billion a year from the state and localities. More than
275,000 public employees, including teachers, have retirement accounts with the VRS, which
ranks as the nation’s 32nd largest retirement fund.