When Virginia’s pension funds can’t meet obligations
VA pension funds are underfunded by more than $1.2 billion, and their obligations to retirees are so high that they cannot cover them all.
The $1,095.7 billion in VA pensions and benefits for active duty retirees were paid in full in April.
The pension plans for the military’s reserves have yet to meet the obligations, even though the reserve forces and active duty are among the biggest employers in the state.
The VA’s reserve forces include the Coast Guard, the Air National Guard, and the Coast and Maritime Guard.
But in April, the VA’s chief financial officer said the VA was facing an $8.6 billion shortfall in its pension liability for active service members, including retired military personnel and retirees.
VA spokesman Joe Fain said that was because of “challenges in reconciling the pension liability with the current state of affairs with respect to retirees.”
Fain added that VA was “reviewing the status of our reserve force pension obligations to ensure the solvency of the program in the future.”
“The VA remains committed to supporting the active and reserve forces in the years ahead,” Fain wrote in a statement.
“The VA is making progress on our reserve fund liabilities, but the process is still evolving and remains subject to the continuing review of our plan.”
VA officials told the Washington Post that it was still working to reconcile the VA pension liabilities with current state law.
A VA spokesman said the agency “has no comment at this time.”
The VA spokesman told the Post that “the VA’s current plan for meeting its pension obligations was the most successful” the agency has ever implemented, and that the VA would continue to work to reduce its pension liabilities and achieve the goal of making them “equivalent to current liabilities.”
VA officials have acknowledged that it is “pursuing ways to meet its obligations.”
The agency told the Times that it will continue to look for ways to reduce the liability.
“Our goal is to have all active-duty personnel, including retirees, covered in full by VA,” the VA spokesman wrote.
In the past, VA officials have been accused of hiding from the public the fact that their pension plans are in serious trouble.
In 2012, the Times reported that VA officials had told reporters that they had “no plans to provide any more information” about the pension fund’s problems, even as a federal audit was under way.
In the same report, VA chief financial Officer Scott McLean said that VA plans were in “good shape” and that VA would be able to “continue to fund its current liabilities, without any change to our plans.”
Fain told the paper that “VA’s reserve force is funded through the reserve fund, which we believe is the safest form of financing for the pension liabilities.”
He added that the “VA reserves are in good shape, and we are committed to meeting them.”
But VA officials also told the newspaper that the retirement costs are “the primary cause of the shortfall” and said the reserve force was “sustainable” in the long run.
“It is the VA that is paying the principal on the debt,” Fisles said.
“If we were able to get our principal payments into the reserve, we could cover our liabilities.”