Gov. Bob McDonnell vowed Thursday to make the largest contribution to the public employee pension fund in Virginia history just days before the Republican leader presents his biennial budget.
The announcement comes on the heels of a state audit that shows the General Assembly has shorted the Virginia Retirement System by $20 billion, including by $8 billion in the past two years alone. McDonnell plans to recommend a $2.2 billion employer contribution to the retirement fund for teachers and state workers in fiscal years 2013 and 2014 to help close the gap.
“The plain truth is our state retirement system is underfunded, and this situation threatens the system’s long term solvency,” McDonnell said. “I will not pass on a broken system to another governor.”
Nearly $1 billion of the state contribution will come from the general fund, meaning those dollars will be diverted from other programs and services. On Wednesday, McDonnell also promised to increase higher education spending by $100 million.
In 2010, at McDonnell’s behest, the General Assembly voted to divert $620 million in pension payments.
Local governments will be on the hook to help pay their portion of the teacher’s retirement fund.
