Albemarle County has decided to opt out of paying VRS contributions for new employees hired after July 1, 2010. The General Assembly allows them to chose whether to pay the employee contribution or not.
According to the Richmond Times Dispatch:
CHARLOTTESVILLE — Albemarle County officials have decided to stop picking up the tab for what local government employees have to pay into the state retirement system.
Albemarle, along with the bulk of localities in Virginia, has long been required to pay what is considered the employees’ retirement contribution share. But this year’s General Assembly gave localities the option to make new employees pay the contribution themselves — which equals 5 percent of their salaries — so Albemarle decided to make new employees start paying.
The change applies only to new employees who have never been in the Virginia Retirement System and are hired after July 1.
The benefit payouts will be deducted from employees’ paychecks.
Depending on how many employees the county hires after July 1, the move at a joint meeting last week between the Board of Supervisors and School Board could save the county a couple of hundred thousand dollars per year, officials estimated
It is unclear whether the school board will go the same route and the county. One thing being discussed is raising the pay to attract more teachers and then soaking the new employees for their VRS contribution. I hope they tell them this before they sign on. It almost seems deceptive. The VRS employee contribution is 5% of the employee’s annual salary. I am not sure I see where Albemarle County Schools would be saving money if they paid more to the new employees and didn’t pay VRS. Wouldn’t they have to pay highter FICA contributions? It also eventually raises the amount their pension is calulated on. Pay me now or pay me later. It seems to me that they are just being sneaky. I hope it ends up biting them in the butt.