Says he’s proposed "the largest employer contribution to the Virginia Retirement System in history."
Bob McDonnell on Monday, December 19th, 2011 in a speech.
Gov. Bob McDonnell says he's proposed record contribution to state pension
Gov. Bob McDonnell has proposed spending an additional $2.2 billion on state employee and teacher pensions during a two-year budget period that will begin July 1.
The governor, in presenting his biennial budget plan to the General Assembly’s money committees on Dec. 19, said his pension proposal, if approved, would be "the largest employer contribution to the Virginia Retirement System in history."
We wondered whether the total $2.21 billion infusion over two budget years would truly be historic.
Since taking office in 2010, McDonnell has made a number of proposals to reform the Virginia Retirement System, which is an estimated $19.9 billion short of the assets needed to pay its projected pension liabilities over the next 85 years. But the governor also added to VRS’s woes early in his term by convincing the legislature to divert $620 million in scheduled pension contributions to balance the state’s general fund, which pays for education, public safety and health programs.
Under McDonnell’s new proposal, Virginia would pay roughly $600 million for state employee pensions during the 2013-14 budget years. Another $1.6 billion would be contributed to teacher retirement funds, with local governments picking up $1 billion of the sum and the state government paying $600 million.
Tucker Martin, McDonnell’s director of communications, told us the governor’s claim that the $2.21 billion total contributions would be historic was based on VRS data.
The VRS figures show the largest employer contribution to date came in the 2007-08 biennial budget when total state and local contributions were $1.72 billion. That’s lower than McDonnell’s proposal.
The retirement system started in 1942, but VRS doesn’t have records of employer contributions before 1973.
Jeanne Chenault, a VRS spokeswoman, said the number of teachers and state employees before 1973 would have been lower, so it’s unlikely that contribution amounts would have exceeded 1973 levels.
The VRS data shows annual contribution amounts without adjusting for inflation. So we did that work ourselves to see McDonnell’s claim could survive another test.
It did. Even when adjusting for inflation, the 2007-08 contributions were still the high-water mark for employer contributions to the pension system, coming in at just more than $1.8 billion in current dollars. McDonnell’s proposal eclipses that.
The governor said his proposed $2.21 billion employer contribution for state worker and teacher pensions would be the largest in VRS history.
For as far back as the data goes, the governor’s statement is correct even when adjusting for inflation.
We rate the claim True.