Treasurer's office briefs committee on pension administration budgets, teacher OPEB and municipal equipment loan changes

Ashlyn Doyon, director of policy in the state treasurer's office, told the House Government Operations & Military Affairs Committee on Feb. 25 that several budget language items under review are the treasurer's office operating budgets for pension administration and a proposed change to the municipal equipment loan fund.

Doyon said the operating numbers in the request are administrative appropriations, not the pension assets. "The pension administration, that's what you think of when you think of the state retirement office," she said, describing staff who make monthly payments, provide retiree counseling and handle retiree health insurance administration. For one line in the draft budget, Doyon read the totals as $3,293,134 for the Vermont State Employees' Retirement System administrative budget, split into $2,247,471 for retirement operations and $1,045,073 for the portion attributable to the Vermont Pension Investment Commission (VPIC).

The committee heard similar administrative-line breakdowns for the Vermont Municipal Employees' Retirement System and the Vermont State Teachers' Retirement System. Doyon emphasized these are operating costs — staffing, software, subscriptions and fees — "but it's not the actual pension money itself. That's just the administration of the pension funds." She said VPIC, which manages investments, had been separated from the treasurer's office in prior reforms and the treasurer's office now pays VPIC for services that previously were internal.

On teacher health care and other post-employment benefits (OPEB), Doyon summarized the administration's requested language: the full OPEB contribution for retired teachers is roughly $79.9 million, of which the state's contribution is about $71 million and $8.9 million is attributed to a "new teacher health care annual charge" paid by employers or tied to new hires. "This is standard annual language which allows the normal contribution to be funded with education funds," she said. Committee members asked for follow-up to clarify distribution mechanics of the $8.9 million assessment.

Doyon also described a proposed statutory change to rename the municipal program "the municipal equipment and vehicle loan fund" and to add a hardship waiver. Under current practice, the fund has per-municipality limits (a referenced $150,000 annual limit or up to 75% of purchase price in some places); the waiver would allow flexibility in a catastrophic event when a municipality loses multiple pieces of equipment. "We're proposing to call it the municipal equipment and vehicle loan fund," she said, and noted the fund is healthy and the office is not requesting additional appropriations at this time.

Committee members and staff asked for clarifying language and for the treasurer's office to provide the exact budget language and figures to committee staff. Doyon and committee staff said the treasurer's office had submitted memos and would follow up with more detail for the committee's memo to Appropriations.

No formal vote occurred on the budget language or the municipal loan changes in the Feb. 25 session.