According to Virginia's Joint Legislative Audit and Review Commission (JLARC), the state's pension systems are underfunded by $17.6 billion. This assumes a discount rate of 7 percent - recently lowered from 7.5 percent. That means the unfunded liability is actually much higher. But even just recognizing a portion of the unfunded liability has led Governor McDonnell to make some policy changes including asking current employees to contribute five percent to their plans. Since 1983 Virginia public employees haven't put any money towards their pension plans, when the state agreed to pick up the tab in lieu of a wage increase.
In July, the Virginia legislature voted to require new state hires to contribute five percent to their pensions, but allowed local governments to continue covering the contribution.This year's biennial budget deferred the state's $620 million contribution to the system, which lawmakers say they intend to start paying off with interest in 2013.
In July, the Virginia legislature voted to require new state hires to contribute five percent to their pensions, but allowed local governments to continue covering the contribution.This year's biennial budget deferred the state's $620 million contribution to the system, which lawmakers say they intend to start paying off with interest in 2013.
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