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State employees asked to pay more to VRS

Thursday - 1/12/2012, 2:57pm  ET

Associated Press

RICHMOND, Va. - Gov. Bob McDonnell is proposing that state employees pay more into their retirement system.

McDonnell said Thursday that he will ask the General Assembly to increase employee contributions, not including teachers, judges and local employees, from 5 percent to 6 percent. The increase would be phased in over two years.

McDonnell also proposed changing the formula for cost of living adjustments and creating an optional plan that would give employees a chance to move toward a defined contribution system instead of the current defined benefits program.

The governor said the changes will generate more than $5.8 billion in savings or contributions for the Virginia Retirement System in the next 21 years.

McDonnell previously announced a record $2.2 billion state contribution to the VRS.

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