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Va. Governor Proposes Pension Changes

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By Courtney Collins

Virginia's governor, Bob McDonnell, is asking state government workers to pay into their pension plans for the first time since the early 1980s. He is proposing long-term changes to Virginia employee's pension contributions in the face of an unfunded $17.6 billion liability.

McDonnell is recommending that state employees put 5 percent of their pre-tax salaries toward their retirement plans starting next year.

While employees are slated to receive a 3 percent pay raise, this change would effectively cut their take-home pay by 2 percent. The state would also kick in an additional 2 percent to state-supported pension plans.

Currently, Virginia is one of only four states that pay both the employees' and employers' pension contributions.

McDonnell has called Virginia's state pension system "broken and badly in need of repair." Requiring state employees to put in their 5 percent would pump more than $300 million into the Virginia Retirement System in the 2012 fiscal year.

The reform affects about 87,000 state workers.

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