Gov. George Allen is telling retired federal employees who were illegally taxed during the 1980s to take the settlement the state legislature passed this summer or leave it.
Allen's comments last week came after the U.S. Supreme Court ruled that Georgia must pay refunds to its federal retirees who were illegally taxed. Allen attempted to encourage the retirees to respond favorably to the settlement by the Feb. 1 deadline to avoid more litigation.
The $340 million settlement ended five years of litigation in Virginia and represents about 80% of claims, excluding interest, by about 185,000 federal retirees. If the legislature and attorneys for the retirees had not reached a settlement, the state could have been liable for more than $700 million.
The state will mail final offers on Thursday, and each retiree has until Feb. 1 to accept or reject the settlement. Repayment will begin March 31. Those receiving small settlements will be repaid in one check, but the larger amounts could be repaid over five years.
If a retiree with a claim of more than $20 million rejects the settlement offer and pursues further court action, the entire settlement is considered void and Allen and the legislature must amend the law or renegotiate the settlement.
Derivatives have no place in Henrico County investments, county officials say.
Henrico, whose county seat is Richmond, said that it "has no derivative products in the county's $177 million investment portfolio." The announcement followed Orange County, Calif.'s massive losses from derivative instruments and the California county's subsequent bankruptcy filing.
In a news release, county officials also said that Henrico County's investment practices do not permit leveraging of investments through reverse repurchase agreements or other types of borrowings.
"We are known for our very conservative investment policies, which consist of U.S. government, federal agency, high-quality corporate obligations, and bank certificates of deposit," said county manager Virgil R. Hazelett.