ROANOKE TIMES 
                      Copyright (c) 1996, Roanoke Times

DATE: Friday, August 9, 1996                 TAG: 9608090061
SECTION: VIRGINIA                 PAGE: B-5  EDITION: METRO 
DATELINE: RICHMOND
SOURCE: Associated Press 

STUDY ON PENSIONS UNDER WAY STATE WORKERS MAY HAVE NEW CHOICE

State employees could set up and manage pensions that are separate from the Virginia Retirement System under a study that Gov. George Allen's administration has launched.

``Choices are always better for people,'' said Robert Lauterberg, the planning and budget director who initiated the study.

Other states also are considering, or have adopted, self-managed pensions like those available in the private sector through employer-sponsored 401(k)-type plans.

But some worker groups are skeptical of the approach.

Retired public employees ``have been burned a couple of times, and my guess is that they would be leery of such a study,'' said Pleasant Shields, a retired Parole Board employee who lobbies for the Virginia Governmental Employees Association.

Edwin Burton, a Virginia Retirement System trustee and advocate of self-managed retirement plans, welcomed the study but urged the Republican administration to seek input from key Democratic leaders.

``In order to be successful, to have a truly voluntary system for employees, I would hope that this would be a bipartisan effort,'' Burton said.

The VRS manages $22 billion in assets on behalf of 75,000 retired local and state employees.

Lauterberg emphasized that the study was preliminary. He said the General Assembly and state employees would have a say in the development of a self-managed program.

``We are only interested in this if it is an option for state employees and does nothing to take anything away from state employees,'' he said.

The current pension program is a defined benefits plan. The state is liable for monthly payments to retirees and the multibillion-dollar portfolio covering benefits.

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