By Paige Winfield Cunningham
Virginia Statehouse News

House Republicans want state employees to contribute to their pensions; Senate Democrats don’t. The House wants to return $120 million to the state pension fund; the Senate wants to send $100 million.

Two contrasting plans for Virginia state employees and their pensions are on the table after House and Senate money committees proposed their own versions over the weekend of how the 2011-2012 biennium budget should be amended.

Neither line up exactly with Gov. Bob McDonnell’s hopes of requiring state employees to start contributing 5 percent of their salaries to the Virginia Retirement System. McDonnell’s state would soften the hit with a 3-percent pay raise.

The GOP-led House wants to raise salaries by another 2 percentage points to a total of 5 percent, completely offsetting the proposed contribution. Majority Democrats in the Senate are rejecting all employee pension contributions offset by raises.

As things stand now, only state employees hired after July 1, 2010, must contribute to the VRS. Members of the House subcommittee on retirement said the discrepancy should be corrected by extending that requirement to all employees — as long as they’re given corresponding raises.

“What it does going forward is put all employees on the same exact level, and I think that is important as we look forward to reform,” said subcommittee chairman Chris Jones, R-Suffolk.

Ron Jordan, executive director of the Virginia Governmental Employees Association, agreed.

Treating all employees alike is not only important for morale, but it also would raise state retirement benefits and Social Security benefits for workers when they retire, Jones said. He also said including all employees in the contribution requirement would allow Virginia lawmakers to move to other issues the VGEA sees as important.

“It gets this off the table and allows us to move along to other state employee issues — like salary compression,” Jordan said.

The Virginia Education Association has set up camp on the other side of the fence. Spokesperson Robley Jones said the Senate plan is a much better deal for teachers, because the House plan leaves room for uneven raises.

While the House plan requires 5-percent raises for state employees, districts would be allowed to decide whether teachers should get a raise, and if so, how much.

“There’s the possibility for the playing field to be very unfair,” Robley Jones said. “Some districts will give 5 percent, others won’t. It will be all over the board.”

Both the House and Senate plans slightly reduce how much the state is deferring in payments to the VRS. Last year, the governor proposed, and lawmakers approved, delaying $621 million in payments for 2010 — along with the prior year’s fourth-quarter payments — to help balance the budget.

The Senate plans to reduce the deferments by $100 million; the House, by $120 million. While McDonnell’s plan is no longer in the running, it would have reduced the deferments by $176 million.

The governor’s plan also would have saved the state $58 million — mostly through the net 2 percent that workers would be contributing to the fund after their 3 percent pay raise. That savings isn’t a part of the Senate and House plans.

The VRS guarantees pension benefits for more than 236,000 current state employees as well as about 121,000 retirees.

Both senators and delegates are still acquainting themselves with the two spending proposals. On Thursday, finance committee staff will brief lawmakers on the Senate plan.

Delegate Robert Tata, R-Virginia Beach, supported the House plan from his seat on the retirement subcommittee. But he said it’s “a little bit negative” compared to the Senate’s offering.

“I think the Senate’s plan is much better because they’re more generous,” Tata said. “I guess the end result will be we’ll meet halfway.”