SD12 - The Use of Defined Contribution Pension Plans by Local Governments
Executive Summary: Senate Joint Resolution 209 directed the Virginia Retirement System to conduct a survey of localities with defined contribution retirement plans to determine if those plans are in compliance with Section 51.1-800 (A) of the Code of Virginia (Appendix B), including the funding practices of the plans over the past ten years. Because only two Virginia localities that are required to comply with section 51.1-800 (A) have defined contribution plans, Powhatan County and the Town of Farmville, the scope of the study was limited to the retirement plans of those localities. The nature of defined contribution and defined benefit plans make them difficult to compare. Comparability is only as reliable as benefit projections under the two plans. Based upon benefit projections provided by the Town of Farmville, its plan appears to be comparable to VRS assuming no significant decline in investment earnings. Benefit projections were not provided by Powhatan County which makes any assumptions relative to comparability difficult. Absent a mandate that all plans must have defined benefits, no further comparison can be made. |
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