Local Educators Lobby Against Changes to VRS

The Prince William Education Association held its first town hall meeting last week to express growing concern over proposed bills under the 2012 Virginia Education Association (VEA) Legislative Agenda.

The Virginia Retirement System (VRS) is a hot topic this year among educators and those who serve the public because "there are 16 parts to the changes that lawmakers want to make to VRS," said Riley O'Casey, who teaches eighth grade civics at Bull Run Middle School and attended Lobby Day in Richmond recently. 

James Livingston is a math teacher at Parkside Middle School and spoke at the Town Hall meeting held last Thursday at the Manssas-area school. He said the VEA is opposing some legislation that would undermine the security of the Viriginia Retirement System (VRS).

Virginia operates under a Defined Benefits Plan (DBP) and one of the proposed bills would replace the current pension with a Defined Contribution Plan (DCP) , which would lead to a 5-percent cut in pay for employees and their retirement subject to the ups and downs of the stockmarket.

Defined Benefit Plan

According to VEA staff, under the current Virginia plan, when public employees retire they receive a guaranteed retirement benefit. The state sends them a retirement check every month for the rest of their lives. The amount depends on the number of years worked, among other things.

Defined Contribution Plan

According to the VEA, this plan would have the state pay into basically what amounts to a 401K, which is owned by the employee. Under this plan, an employee's retirement is subject to whatever the stockmarket does. This plan shifts the market risk to public employees.

Here are the bills before the General Assembly that would change the current way VRS operates:

SB 497, sponsored by Sen. John C. Watkins, R-Powhatan, requires that persons employed by local governments or school board employees be required to pay the 5 percent employee contribution to the Virginia Retirement System. School board employees would be authorized to phase in the 5 percent contribution over a maximum of five years.

HB 257, SB 506, sponsored by Del. Christopher P. Stolle, R-Chesapeake, and Sen. Frank W. Wagner, R- Virginia Beach, permits any locality or school board to establish a defined contribution retirement plan, in lieu of any other retirement plan, for employees hired after such plan is established.

HB 1129, sponsored by Del. William J. Howell,  proposes changes to the current VRS benefits structure, including a reduction of cost of living adjustments, changes the calculation of average final compensation to cover a period of 60 months rather than 36 months and increases the employee contribution rate from 5 percent to 6 percent for all state employees; some of the changes in the bill would apply to current employees, not just new hires.

According to the Joint Legislative Audit and Review Commission (JLARC), which is a bipartisan commission established by the state legislature to review the finances of the Commonwealth,  "It is likely that many of these individuals under the Define Contribution Plan will outlive their retirement assets" and the plan "is not  in the best interest of employees."

Changing the retirement plan and allowing new hires to opt out of VRS does nothing to solve the problem, which is that the VRS has an unfunded liability, Livingston said.

According to the VEA, the greatest challenge to the K-12 public education this year will be funding and the measures proposed will not help repay the $620M raid on VRS last year that has robbed local school districts of valuable state resources. 

The state legislature has paid into the VRS only four times since 1992, Livingston said, and only twice to the teacher VRS.

"They are stealing our money and they want us to pay back the loan they took out," he said.

Continuing Contract

SB 438 and HB 576, proposed by Sen. Mark D. Obenshain, R-Harrisonburg, and Del. Richard P. Bell, R-Staunton, makes several changes to the process by which teachers and certain administrators are evaluated and retained, including the replacement of continuing contract status with annual contract status for teachers and principals; allowing termination of annual contracts for just cause; requiring that annual evaluations of teachers, principals, and superintendents include student academic progress as a significant factor; and requiring that force-reduction measures consider performance rather than seniority.

"Virginia currently has a continuing contract law that protects teachers, among others from unnecessary termination by granting them the right to due process in which allegations against them can be tested for their accuracy and truthfulness," said Riley O'Casey, a social studies teacher at Bull Run Middle School who spoke at the Town Hall.

"If continuing contract is taken away and this bill passes we (people who serve the public) will not have a right to due process," she said.

Education Funding

Gov. Bob McDonnell's budget proposal will lead to a reduction of nearly $11 million in competing funds for Prince William County schools, according to the VEA. At the same time, a higher VRS rate has been charged to local governments, which are being asked to kick in more of the VRS costs, totalling  millions of dollars in county money.

"We are going to get less money but we are going to have to spend more money under these proposals," Livingston said. "This is going to be larger class sizes, program cuts...and there is the very real possibility that we will be looking at salary and benefits cuts. It's happened in other areas across the state already."