Virginia governor Bob McDonnell is calling for the largest employer contributions to the state's pension system in history. McDonnell says his biennial budget proposal will recommend a total of $2.2 billion in employer contributions to the Virginia Retirement System, which is currently said to be underfunded by $20 billion.
The governor says the system is underfunded -- a situation that threatens its long-term solvency. During the recession -- Virginia's general assembly dramatically lowered the required contribution rates for employers such as school districts.
Fairfax County Public Schools Superintendent Jack Dale says the Governor's proposal makes sense, and fortunately the county has a reserve fund of $60 million dollars set aside because they knew this day was coming
"We're probably okay for one year, but we'll then have to look at the consequences of this decision in subsequent years -- it's still probably the right thing to do in terms of fiscal stability for the retirement system," says Dale.
The reserve fund means school district and county leaders won't have to ask the taxpayers to help pay for the higher pension contribution rate, but that could change after this year.