Virginia legislation that would create a new mandatory hybrid retirement program for state employees could cost Virginia millions of dollars to implement, according to an analysis by The Commonwealth Institute.
Gov. Bob McDonnell signed the bill into law this week.
With almost 340,000 participants in the state’s retirement plan, the potential costs could be between $5 million and more than $25 million, the report found.
The study, “Known Unknowns,” looked at the costs of developing the information technology and other related systems in states like Utah, Oregon and Michigan that have similar hybrid retirement plans.
“Even though the state maintained that costs could not be ascertained at the time the legislation was proposed, simple analysis around the experience of other states gives us an idea of how significant the costs could be,” the Institute’s president, Michael Cassidy, said in a news release.
The new law establishes a retirement plan that combines a defined benefit portion (pension) with a defined contribution portion (savings account). All new state and local employees, including teachers and judges, would have to participate in the hybrid program as of Jan. 1, 2014. Current employees are not required to join, but could opt in.
“The potential high costs of a new retirement program are the latest sign that the proposals to cut benefits for public employees bring significant downsides for the state. To date, the debate over Virginia’s efforts to cut the state retirement system have not included a thorough examination of the costs of transitioning to a mandatory hybrid program,” the analysis in the study read.
According to the Post, supporters of the plan say it will improve the state’s ability to recruit employees who intend to have shorter tenures, provide more stability to government and reduce future obligations.
“Of course [the Virginia Retirement System] will experience some system development costs in this transition,’’ McDonnell spokesman Jeff Caldwell told The Post.
“The exact amount of those costs are still unknown at this time, but they will certainly pale in comparison to the tremendous savings these reforms will produce. The fiscal impact statement...estimates a savings over the next 20 years of $3.6 billion. Savings of that magnitude will dwarf the costs that will be accrued during the transition.’’
* Mayor Vincent Gray is expected to announce a city-wide anti-bullying campaign this evening at E Street Cinema before a private screening of the documentary “Bully.”
According to The Washington Examiner, the Office of Human Rights will lead the city’s “Anti-Bullying Action Plan.” The office will create a task force, commission a research report, establish a "model policy and standards" and host a forum on bullying for D.C. agencies.
Members of the 14-person task force include D.C. Public Schools Chancellor Kaya Henderson, Metropolitan Police Department Chief Cathy Lanier and the directors of the mayor's office on LGBT affairs, the parks department, and the health department.
This city-wide initiative is being hailed as a first, according to The Examiner.
* The Washington Business Journal addressed the mystery of former D.C. Mayor Adrian Fenty’s unspent campaign money from 2006.
The Journal reports that the unspent money—$440 ,709—was used in 2010 to form Forward Faster, a nonprofit registered to his chief campaign fundraiser.
But, according to The Journal, it is still unclear what the nonprofit actually does.
"There is no record of the organization with the Internal Revenue Service. There have been no announcements from the organization's directors or president. The only paperwork filed with the District, other than the Dec. 21 incorporation documents, was a Jan. 15, 2011, domestic nonprofit corporation report. That document contained very little information — names of directors, business address, vague nonprofit purpose."
* Prince William County Supervisor Corey Stewart officially entered the 2013 Virginia lieutenant governor race.
He is the first person to declare his candidacy.