Nearly two weeks after Democratic leaders shelved plans to tackle pension reform this legislative session, plans for a task force charged with tackling the issue this summer are taking shape.
A bill approved Wednesday by the House Government Operations Committee would create a 15-member Pension Design and Funding Task Force to generate ideas for fixing the state’s ailing pension system.
The bill would also add three new members to the existing seven-member committee focused on pension investments, which has come under legislative scrutiny for the investments' poor investment returns.
Taken together, the measures would tweak the pension governance structure this legislative session while putting off until next year the more controversial changes to future benefits and contribution rates for the state’s current 17,300 employees and teachers.
A draft plan to begin closing Vermont’s $3 billion-and-growing pension shortfall sparked fierce protests from the state’s unionized workforce. The plan would have increased employee contributions and made employees work longer to receive less generous benefits.
“This has been a very intense process,” Rep. Sarah Copeland Hanzas (D-Bradford) said shortly before the committee’s 9-2 vote. “This bill that we’re working on is one that impacts a lot of neighbors and a lot of our very important community members.”
The immediate changes would expand the seven-member Vermont Pension Investment Committee into the 10-member Vermont Pension Investment Commission. The three new members would all be from entities that employ workers who are beneficiaries of the pension system.
The makeup of the 15-member task force has also been controversial. Union groups have complained that the balance on the committee is too heavily weighted on the side of management.
“This would doom the task force to the perception that it is stacked unfairly against labor before the work has even begun,” Aimee Towne, the president of the Vermont State Employees’ Association, told the committee.
That critique annoyed Rep. John Gannon (D- Wilmington), who noted he’s been bombarded by complaints about the board.
“I’ve received hundreds of emails in the past two days saying that the balance is somehow wrong,” Gannon said. “But to be honest, I am starting to feel insulted by those comments, because it seems to lump us with management, and potentially, enemies of labor, and I total disagree with that.”
The task force would be made up of six lawmakers, three from the House and three from the Senate. Unions would get six reps as well, three from the Vermont-NEA, the state branch of the National Education Association, and three representing other state employees. Two of those would be picked by the powerful Vermont State Employees' Association, and one by the Vermont Troopers’ Association.
Rounding out the new body would be two administration officials — the commissioner of financial regulation and the commissioner of human resources — and the director of the retirement division of the Office of the State Treasurer.
One of those who voted against the bill was Rep. Tanya Vyhovsky (P/D-Essex), who worried the changes were being made too quickly.
"It feels like it sets this up to have people cry that it is unfair, and it is unbalanced and hasn’t fully been vetted," she said.
Rep. Mike McCarthy (D-St. Albans) argued that the committee had gone out of its way to solicit feedback from unions and employees who would be affected. That testimony has helped him understand "why emotions are so high."
"It's because people are talking about their ability to survive with dignity in retirement," he said.