Vermont State Employees, win or lose?

George Burgoyne found the original article about changes to the Vermont State Employee pensions. I have used some of the facts as a springboard for comments. Would you like some of the same changes? Are they getting a better deal or are they getting hosed? If you are a younger State employee are you concerned that a deal offered to the older employees could affect you?

On July 1, 2008 State Employees felt another hit in their take home pay and both current and future retirees will be seeing a better future.

Retirees will now get a cost-of-living adjustment, with a five percent cap.

Employee’s pension deductions are jumping to 5.1 percent, from 1.75 percent up 3.35 percent. The hit on take home pay is the funding tool that allows a vastly better COLA for VSEA retirees. They will have a chance of staying even rather than falling behind every year.

Maine has a four percent cap.

New hires, not current employees will have to work until 65 in order to retire, up from 62. I can’t wait until our politicians hear this one.

Then there is the so called 87 option. If your age and service add up to 87, you can retire. Hire on at 23 years old, work until you are 55.

Thirty two years service with age 55 equals 87. You too can retire while young enough to enjoy it.

Vermont workers will only get 80% of percent coverage of health care costs in retirement and will have to work ten years just to get to 40%.

These changes can be made now due to two things. VSEA workers are allowed to negotiate many of the items around both health care and around their pensions. Their legislators are willing to talk with them.

The second reason is the graying of the work force. The cost of living adjustment was a huge incentive. The previous COLA was limited to one half of the cost of living. The true impact is dependent on which cost of living measurement is used, the Bush scale which leaves out home heating and many other necessities or the true cost of living. Thank you to Steve Butterfield of MSEASEIU who taught me the difference. The same word, COLA can mean very different things when it comes to how well you may be able to live when retired.

While many employees will see a large part of the raises gained in the current contract eaten up by increases in health care and pension costs the plan was very appealing to the huge proportion of the workforce soon eligible for retirement. They can see the direct benefit to their future pensions.

Good or bad at least Vermont State Employees were part of the process as they are allowed to negotiate over many of the terms of their employment that Maine legislators so jealously guard as too complicated or too important to let employees have any say.

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