Treasurer, Vermont Financial Literacy Commission call for improvement of financial capability
Vermont Business Magazine - State Treasurer Beth Pearce, House Speaker Mitzi Johnson, Champlain College Center for Financial Literacy Director John Pelletier, and members of the Vermont Financial Literacy Commission today urged policymakers to act on the recommendations contained in the Commission’s 2017 Financial Literacy Report.
“The Financial Literacy Commission believes strongly that the State of Vermont can do more to advance the financial capability of our citizens by building on successful programs and more efficiently utilizing existing resources,” said Treasurer Beth Pearce, who serves as Co-Chair of the Commission.
Commission members noted that many Vermonters struggle with personal finance concepts and lack financial capability at all income levels and stages of life. The Commission called on the General Assembly and Vermont leaders to take substantive steps to promote responsibility, affordability, and sustainability for the financial well-being of all Vermont citizens. The steps, which are detailed in the full report, include:
• Promote expanded financial literacy education at the primary, secondary, and postsecondary levels;
• Increase access to available state resources by appointing an interagency task force to evaluate current programs and to coordinate and improve the effectiveness of existing outreach efforts to our schools, colleges, and with citizens; and
• Launch a financial health campaign to educate our citizens about the importance of basic financial education, credit worthiness, saving, investing, and to direct them to existing reputable personal finance resources.
"Too many Vermonters struggle with debt, poor credit, and costly emergencies with little to no savings, sending them in to a dangerous debt spiral,” noted House Speaker Mitzi Johnson. “Financial literacy is a critical skill for Vermonters and for the economic growth and prosperity of our state. Vermont must do better. We must give our citizens access to financial literacy tools to ensure our communities are strong and our economy is healthy." The Vermont General Assembly established the Vermont Financial Literacy Commission during the 2015 Legislative session. The 12-member commission was created to make recommendations to measurably improve the financial literacy and financial capability of Vermont's citizens (attached is an Executive Summary of the report).
To date, several of the Commission’s recommendations have been enacted, or are moving through the legislative process, including the development of a public retirement plan option for Vermonters who do not currently have access to employer-sponsored plans (proposed in S.135), changes to state policy to address benefit cliffs and asset tests (proposed by H.326), and the State Treasurer’s Office’s successful launch of VermontABLE accounts, which allow individuals with disabilities the opportunity to save and invest up to $14,000 per year without being removed from public benefit programs. John Pelletier, Co-Chair of the Commission and Director of the Center for Financial Literacy at Champlain College, noted the importance of prioritizing policies to increase the financial sophistication of Vermont’s citizenry: “many state initiatives such as decreasing poverty and increasing the proportion of young Vermonters continuing their education beyond secondary school rest on our citizens having the financial tools they need for a better future. The number of financial decisions Vermonters face continues to intensify as the variety and complexity of financial products grow.”
Commission members shared data that individuals often do not fully understand debit and credit cards, mortgages, banking, investment and insurance products and services, retirement planning, and an array of other financial topics. A lack of financial capability can limit an individual’s access to credit and saving options, leading to a higher cost of living.
“We believe that by prioritizing how we provide Vermonters with the tools to manage their money, we can help improve our state’s economy and stretch our dollars to ensure maximum benefit for taxpayers,” said Pearce.
Members of the Commission include diverse thought leaders and advocates representing the financial literacy community:
• Beth Pearce, State Treasurer, Co-Chair
• John Pelletier, Champlain College Director of the Center for Financial Literacy, Co- Chair
• Mark Perrin, member State Board of Education
• Courtney Poquette, Business Educator, Winooski High School
• Justin Brown, Assistant Principal, Colchester High School
• Sabina Haskell, Director of Public Affairs, designee of the Vermont Student Assistance Corporation
• Lisa Falcone, Working Bridges Director, United Way of Northwest Vermont
• Mary Niebling, Director of Community Economic Development, Capstone Community Action
• Thomas Leavitt, President and CEO of Northfield Savings Bank
• Yvonne Garand, Senior Vice President, VSECU
• Linda Tarr-Whelan, Consultant, Tarr-Whelan & Associates
The enabling legislation creating the Commission defines financial literacy as, "the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being." Financial capability is defined in the law as having "financial literacy and access to appropriate financial products; and the ability to act—including knowledge, skills, confidence and motivation; and the opportunity to act—through access to beneficial financial products and institutions."
Source: Treasurer. 4.21.2017. For more information on the Vermont Financial Literacy Commission visit the webpage linked here.