tag:blogger.com,1999:blog-5287147033560336418.post6204671794598057955..comments2024-03-24T04:54:49.485-07:00Comments on The Dixie Pig: VRS Changes Part I: How Did We Get Here?Scott A. Surovellhttp://www.blogger.com/profile/14899160531211393625noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5287147033560336418.post-15265497356345901872012-03-18T07:47:48.300-07:002012-03-18T07:47:48.300-07:00The hybrid plan helps to make up for the unfunded ...The hybrid plan helps to make up for the unfunded liability by reducing VRS benefits paid to state workers. By making part of the plan a defined contribution plan, that reduces VRS' exposure.<br /><br />Additionally, the local government 5%-5% increase/match is complicated beyond the reasons you've identified. <br /><br />First, by increasing employee salaries, local governments have to pick up the employer-side employment taxes - 7.5%+/- (which are a lot of money given the number of employees involved.<br /><br />Second, by increasing their salary by 5%, the defined benefit portion has to pay out benefits calculated from a 5% higher salary. If they employer would simply throw more money in to fund the liability, the liability would be funded, but the benefit woudn't go up.Scott A. Surovellhttps://www.blogger.com/profile/14899160531211393625noreply@blogger.comtag:blogger.com,1999:blog-5287147033560336418.post-43168631313451755992012-03-18T06:48:35.665-07:002012-03-18T06:48:35.665-07:00"The Republican majority in the House of Dele..."The Republican majority in the House of Delegates proposed shifting to a hybrid plan and also requiring all local governments to require all of their employees to pay in 5% and give them a 5% raise to cover their contribution." <br /><br />This paragraph makes no sense. If the intent is to ask employees to contribute, but make local government raise salaries to make up loss in employee paycheck that does not happen under this plan. One does not make up a % deficit by increasing the original amount by the same percentage. Lets say I make $100, if you increase my pay 5% to $105 then I would have to pay $5.25 to VRS and my salary in effect is $99.25. So I take home less money. I do not break even. This is basic 8th grade math.Anonymoushttps://www.blogger.com/profile/11020861463813408886noreply@blogger.com