The Virginia General Assembly on Wednesday approved a pension reform package that creates a hybrid plan and increases employee contributions to the pension plans under the umbrella of the Virginia Retirement System, Richmond.
“They (the state House and Senate) appeared to be at loggerheads. The way they compromised was they just did ‘all of the above,'” said Robert P. Schultze, director of the $53.6 billion VRS.
VRS will launch a mandatory hybrid plan for new employees by Jan. 1, 2014, according to the legislation. The hybrid will have defined benefit and defined contribution components; the total employee contribution for both will be 5% of pay.
Beginning July 1, the start of Virginia's fiscal year, school and local employees for the first time will be contributing to their pension plans. The hike in employee contributions will be offset by salary increases.
Most of the changes approved by the General Assembly already were signed by the governor in various amendments.
