Backlash Puts Vermont Pension Reform on Hold

A proposed plan to reform Vermont’s public retirement systems has been put on hold after it received a strong backlash from teachers and state employees who said it would force them to work longer, contribute more, and earn less for retirement.

The decision to shelve the plan was announced Friday by Vermont House Speaker Jill Krowinski, who instead called for the creation of a pension task force to look at possible revenue sources, as well as plan and benefit changes to fix the state’s pension problems.

“We have been listening closely to our constituents and hearing their concerns,” Krowinski said at a press conference. “It is clear people are struggling with how to find real systemic change to resolve this crisis right now.”

Krowinski also recommended keeping a one-time infusion of $150 million in reserve while the proposed task force looks for solutions.

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Vermont’s pension systems are facing nearly $3 billion in unfunded liabilities. For the Vermont State Employees’ Retirement System (VSERS), the unfunded liability is projected to increase by $225 million to $1.04 billion in fiscal year 2022. The unfunded liability for the Vermont State Teachers’ Retirement System (VSTRS) is projected to increase by $379 million to $1.93 billion in 2022.

According to a draft of the pension reform plan, teachers and state employees would have been required to pay more in contributions to the fund, stay in employment longer, and earn less in monthly benefits when they retire. The plan also pared back cost-of-living-adjustments (COLAs), and employees would have had to work twice as long—a minimum of 10 years from the current five—to be vested in the program.

The Vermont National Education Association (Vermont-NEA), which represents 13,000 members, applauded the move to put the pension reform plan on hold.

“We appreciate the speaker’s decision to take a long, methodical look at our public pensions,” Don Tinney, president of the Vermont-NEA, said in a statement. “We look forward to working with all stakeholders to ensure that the state keeps its promise of a secure retirement to teachers and all public employees.”

Much of the pension reform proposal mirrored a report issued earlier this year from Vermont Treasurer Beth Pearce that recommended cutting pension benefits for state employees and teachers, a move she acknowledged would be “painful” for workers.

Pearce said in a statement that she was disappointed that the state’s leadership couldn’t reach consensus on a pension reform plan.

“While I recognize that any required benefit changes will be painful, we cannot afford to delay action,” said Pearce, who urged the General Assembly to take action this session to support pre-funding, which she said will reduce Vermont’s long-term liabilities by more than $1.6 billion. “The state cannot afford to kick this can down the road any longer.”

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Tags: Beth Pearce, Jill Krowinski, Pension Reform, Vermont, Vermont State Employees Retirement System, Vermont State Teachers Retirement System, VSERS, VSTRS

Bard College could be the next $1 billion university endowment if it can match a $500 million grant from billionaire investor George Soros within the next five years. It has already raised $250 million toward that goal.

Until then, a Bard spokesman said the $500 million commitment from the Hungarian-born American investor will be held in his Quantum hedge funds, governed by Soros Fund Management, his family office. It is among the largest grants ever given to a higher education institution.

The private liberal arts college will start getting piecemeal Soros payments to its endowment July 1. The school should reach the full $1 billion level when the one-to-one grant is fully matched. This big-money pledge deepens previous Soros contributions to Bard programs.

“When this endowment drive is complete, Bard will have a $1 billion endowment, which will ensure its pioneering mission and its academic excellence for the future,” Bard College President Leon Botstein said in a statement.

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Prior to this commitment, Bard has maintained an endowment of roughly $200 million. The school in Annandale-on-Hudson, New York, was not founded with an endowment when it was started in 1860. Historically, Bard has favored raising money to directly fund the school’s many education initiatives, rather than to support the endowment.

But if Bard is able to raise the final $250 million it needs within the next five years, it will join the cadre of higher education endowments that have crossed the $1 billion threshold. The larger pool of assets would open the school to a broader range of investment vehicles.

Reaching the $1 billion milestone is also when many schools typically start thinking about hiring a chief investment officer and building out a professional investment team, though a spokesperson said the school does not have to contend with that question at the moment, given that the commitment is currently managed by Quantum Funds.

Last fall, Bryn Mawr College hired Carnegie Corporation alum Brooke Jones as its first investment chief as the school approached the $1 billion mark. Similarly, Smith College started its search for its first CIO, after the school, which has a $2 billion endowment, said it has become the “outlier” among higher education institutions that outsource their endowment management.

There are more than 100 schools in the US with endowments north of $1 billion in assets, according to data from the National Association of College and University Business Officers (NACUBO).

Bard has a decadeslong connection with Soros. The billionaire has supported the school since 1989, and over the past decade, he has dedicated $160 million to the Hudson Valley institution.

Last year, the school received a $100 million contribution, distributed as $10 million annually for 10 years, from Soros’ Open Society Foundations, to support its higher education network around the world. Ten years ago, Bard received a $60 million Soros commitment for its civic engagement programs.

The school says the larger endowment will strengthen its undergraduate programs and its various initiatives.