RICHMOND, Va. (AP)- Virginia state and local governments may have to pay more each year to cover public employees’ retirement costs.
The state’s pension plan for public employees is looking at lowering its expected rate of investment returns.
The Virginia Retirement System could lower the assumed growth rate from 7 % to 6.75% or 6.5%. Supporters of the move say the lower numbers are a more realistic forecast of future growth.
Such a move would increase the employer contribution costs by more than $200 million a year. That could eat into government budgets for other services or lead to tax hikes.
VRS last lowered its assumed rate in 2010 from 7.5% to 7%.
The fund said it earned a 6.5% last fiscal year.