MONTPELIER — Top state and teachers union officials proposed a plan Friday they said would ensure the financial security of the Vermont State Teachers’ Retirement System by setting up a separate fund to pay for retirees’ health care.
Gov. Peter Shumlin, State Treasurer Beth Pearce, legislative leaders and the head of the Vermont chapter of the National Education Association issued a joint statement saying the plan would address a shortfall in the state teachers’ retirement fund projected to grow without a fix from $20 million in 2015 to more than $50 million in 2037.
At least one lawmaker questioned why legislators were just learning of the plan now, with an estimated three weeks left in the 2014 session.
Administration Secretary Jeb Spaulding made clear that parties to the deal hoped lawmakers would not tinker with it much. “I think we’ve all seen a package where sometimes if you pull out a string, things come unraveled quicker,” he said.
Spaulding and Pearce also said House Speaker Shap Smith and Senate President Pro Tem John Campbell had been involved in the talks.
The plan includes the following components:
A $28 million loan from the state’s operating cash, to be repaid with interest, to provide an immediate infusion of money to pay retirees’ health care costs.
A fiscal year 2015 state appropriation of $10.5 million, up from $4.75 million contained in the budget passed recently by the House and now before the Senate.
A charge to local school districts of $1,000 per year in a new health care fee for each educator hired after July 1.
An increase in pension deductions to teachers’ paychecks for new hires or those with fewer than five years of service from 5 percent to 6 percent of their gross pay.
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