The latest info on the progress of bills and current bylaws.
LEGISLATIVE SPOTLIGHT: VRS IN UNCERTAIN TIMES
World events affect our lives in many ways. You have seen the volatility of the stock market in recent days and are wondering, and maybe are a little anxious, about how the VRS will be affected. On March 7, VRS sent us the following:
“VRS has minimal investment exposure in Russia. As of February 24, VRS estimates its exposure to Russian investments at approximately 0.1% of the total VRS Trust Fund. We would expect the current value to be lower as compared to the February estimate, but cannot determine an updated value because the markets are now closed to transactions and trading.
“The regulatory, investment and market conditions in Russia are changing rapidly, and VRS is working with its investment partners to develop short-and long-term plans in response to the crisis. Currently, broad-based trading restrictions exist within and outside of Russia, making trades difficult or even impossible.
“Consistent with prudent investment standards and our fiduciary duty, VRS, our managers and legal counsel will continue to closely monitor this rapidly shifting situation. In addition, VRS will comply with the federally mandated sanctions and restrictions regarding Russian investments.”
Governors and other elected officials of many states, including Governor Youngkin, are calling on their retirement systems to divest of their Russian investments. According to the Virginia Constitution, funds of the retirement system are separate and independent and “shall be invested and administered solely in the interests of the members and beneficiaries. Neither the General Assembly nor any public officer, employee, or agency shall use or authorize the use of such trust funds for any purpose other than as provided in law for benefits, …of the retirement system.” In other words, VRS investments cannot be used for any political purpose, no matter how good it may be. This was tested some years ago when VRTA was successful in preventing the GA from passing a law that would require VRS to divest its holdings in companies that did business in Darfur and other areas that sponsored genocide.
Please do not pass along, or even pay attention to, information from social media posts. Retirees in Kentucky were in a panic after incorrect information on social media about their large investment in a Russian bank was eventually picked up by other media. That retirement system is spending valuable time debunking those false claims.
On a more positive note, this year’s COLA is 3.85%, the largest in the last 30 years. We will see this increase in the August check. Also, both the Senate and the House agree to put millions of dollars into reducing the unfunded liability to save the state and localities money in the future. They disagree on how many millions. Recently, the VRS trust fund had about $107 billion in assets. However, this figure changes daily as the stock market fluctuates.
The GA session is slated to adjourn March 12. By the time you receive this newsletter,March 15, you will know whether they have met this deadline. If they have not, the session will be extended until the budget conferees present a budget that both chambers approve. April 11 is the last day for the Governor’s action on legislation and any budget amendments he might make. On April 27, the GA will reconvene to accept or veto the Governor’s action.
Be sure to attend the Spring Delegate Assembly on May 3 to hear a review of the 2022 GA session. On May 4, the VRS staff presentation will update us on retirement funding and answer questions.