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Treasurer's office urges $3 million reserve addition as federal grant receipts for teacher pensions fall
Summary
The Office of the State Treasurer told the House Appropriations Committee that federal grant receipts that fund teacher pension costs have fallen from pandemic-era peaks and requested adding $3,000,000 to an existing reserve in the Budget Adjustment Act to ensure full ADEC payments for FY26.
Tim Duggan, director of Vermont Retirement Systems in the Office of the State Treasurer, told the House Appropriations Committee on Jan. 15 that federal-grant receipts used to offset teacher pension costs have declined since pandemic-era peaks and asked lawmakers to add $3,000,000 to a reserve in the Budget Adjustment Act to cover a possible shortfall.
Duggan said the state uses a Federal Grants Assessment (FGA) charged to grant-funded teacher positions to recover the employer portion of retirement benefits. "This year that's 25.47%," he said, offering a $100,000-salary example to illustrate how the charge works.
The request is precautionary: the Treasurer's office estimated $13,300,000 in FGA receipts for the…
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