In This Edition

1. 2007 MBPs Now Available in myVRS
2. myVRS Continues to Attract Members
3. Reminders Concerning the VRS-45
4. Eligible Retired Public Safety Officers May Exclude Portion of Health Insurance Premiums from Taxes
5. Changes to VSDP Long-Term Care Benefit Effective December 1, 2007
6. Register for December Webinar for State Agencies on 457 Plan Automatic Enrollment
7. State Agencies: Watch for 457 Plan New Employee Packets
8. Your Turn to Ask

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2007 MBPs Now Available in myVRS

By logging into their myVRS accounts, members can view and print their 2007 Member Benefit Profiles (MBPs). Registered users can also get information on "How to Read Your MBP" and compare their 2006 and 2007 MBPs.

Encourage your employees to use myVRS to view their annual benefit statements online. It’s convenient and their benefit statements are available at anytime. VRS shipped the printed MBPs to employers in early October.

A small pilot group of employers did not receive printed MBPs for their members this year. Instead, members accessed their statements through myVRS. Other employers have expressed an interest in providing MBPs through myVRS instead of printed copies. If your employees have Internet access and you are interested in the electronic-only option, contact Kelvin Allen at kallen@varetire.org.

myVRS Continues to Attract Members

Since July, more than 18,000 new users have joined the 60,000-plus VRS members using myVRS. That’s over 14 percent of all active and deferred members eligible to create secure, personal online accounts.

Since the launch in May 2006, myVRS users have:

• Generated about 132,000 log-ins.
• Created more than 135,000 benefit estimates.

myVRS for Employers Sees Steady Demand

Since February 2007, the number of employers authorized to access member information has grown from 764 to 1,310. About 75 percent of authorized users - or more than 980 - created myVRS for Employers online accounts. To date, employer users have:

• Generated about 26,600 log-ins.
• Created more than 35,000 benefit estimates.

Register Now for myVRS for Employers.

Retirement Planner to Expand myVRS Suite

The myVRS suite of secure online customer services is set to expand with the release of a new retirement planner in early 2008.

Unlike many retirement planning tools on the Web, the myVRS Retirement Planner will allow members to create a comprehensive "what-if" picture of their estimated income and expenses in retirement. Members will be able to:

• See benefit and estimated net income scenarios in current and future dollars.
• Try different tax-deferred compensation amounts and rates of return. This function will be especially appealing to younger members who can see how even small increases in savings or tax-deferred contributions early in their careers could yield big dividends when they retire.
• Calculate a Social Security estimate and federal and state tax withholdings.
• Include spouse's income, income from tax-deferred annuities or employment and the health insurance credit.
• Factor in health insurance premiums using current industry trends.
• Itemize their retirement expenses.

Depending upon each member's financial acumen, the new planner will allow members to quickly perform retirement scenarios using "intelligent defaults" or to deliberately customize the planner by changing its underlying assumptions.

Reminders Concerning the VRS-45

Employees retiring with at least 15 years of service may be eligible for a valuable credit towards the cost of their health insurance premiums in retirement. However, many retirees are missing out on this credit or experiencing delays in receiving the credit because they do not complete the Request for Health Insurance Credit (VRS-45) 75kb at retirement.

Remind eligible employees to fill out this form when they come to you for retirement planning advice.

Employees enrolling in the State Retiree Health Benefits Program or other employer-sponsored plan for which VRS deducts premiums do not need to complete the VRS-45. However, employees who are claiming the credit for other types of eligible plans must complete the form. Other types of eligible plans include an individual policy, a spouse’s plan, a dental plan or a vision plan.

Retirees also must use the VRS-45 to notify VRS when they become eligible for Medicare or to report a change in coverage or premium amounts. All information in Sections A, B and C of the form must be complete. Incomplete forms or outdated forms can cause delays.

Learn more about the health insurance credit.

Eligible Retired Public Safety Officers May Exclude Portion of Health Insurance Premiums from Taxes

Eligible retired public safety officers may exclude a portion of their health insurance premiums from federal income taxes. Up to $3,000 a year of their health insurance premiums being deducted from their monthly retirement benefit payment can be excluded. The exclusion is provided by the Health Enhancement for Local Public (H.E.L.P.) Safety Retirees Act, a provision of the Pension Protection Act of 2006.

The amount of health insurance premiums deducted from monthly benefit payments is included as an information item on the 1099-R forms that VRS mails to retirees in January. To take advantage of this benefit, eligible retirees must elect to deduct the amount from their taxable income on the 1040 form when filing their personal income taxes.

To be eligible, VRS must be deducting health insurance premiums from the monthly retirement benefit payment and the retiree must have retired under service retirement at normal retirement age (age 60) or under disability retirement at any age.

Changes to VSDP Long-Term Care Benefit Effective December 1, 2007

Employees who participate in the Virginia Sickness and Disability Program (VSDP) will see an increase in their long-term care benefit. Effective December 1, 2007, the long-term care daily benefit amount will increase from $75 to $96. The maximum lifetime amount will increase from $54,750 to $70,080.

Also on December 1, VRS will begin administering the long-term care program. The current administrator, Aetna Life Insurance Company, is no longer offering group long-term care insurance.

VRS is revising the Virginia Sickness and Disability Program Handbook for Participants to reflect the changes and will post the new edition later this fall.

Learn more about Long-Term Care Benefit Increase.

Register for December Webinar for State Agencies on 457 Plan Automatic Enrollment

State agencies can find out more about automatic enrollment and opt-out procedures for the 457 Deferred Compensation Plan (457 Plan) by attending a VRS-sponsored webinar on December 6.

Automatic enrollment was provided by HB 1830, enacted by the 2007 General Assembly. All salaried state employees hired or rehired on or after January 1, 2008 will be enrolled automatically in the Commonwealth of Virginia 457 Deferred Compensation Plan (457 Plan) when they are first hired, unless they opt out of the plan. Eligible employees at colleges and universities will be enrolled automatically in the 457 Plan unless they elect not to participate in the plan or enroll in the 403(b) offered by the college or university.

Learn more about automatic enrollment.
Register for Webinar.

State Agencies: Watch for 457 Plan New Employee Packets

Great-West Retirement Services, the 457 Plan record keeper, will ship a supply of a 457 Plan New Employee Packet to you in December. This packet of orientation materials is designed for distribution to all eligible state employees hired or re-hired on and after January 1, 2008.

In October, VRS mailed you a 457 Plan Automatic Enrollment Employer Kit that included an advance copy of the 457 Plan New Employee Packet. The packet includes: a Welcome Letter, a highlights brochure, an Investment Guide, a Planning Guide and information on recent performance of the various investment options. The packet also includes an enrollment and beneficiary designation form if an employee wishes to enroll immediately to maximize the benefits of the plan.

On-site information meetings: If you would like Great-West to visit your site to present "Introduction to the 457 Deferred Compensation Plan" to your new and current employees, contact the Great-West Local Service Center at 804-643-1882 or toll free 1-866-226-6682 (option 2).

Your Turn to Ask

Questions received by Employer Representatives and the Customer Contact Center will be routinely selected for publication in Employer Update.

Q: What happens when an employee submits a retirement application and then changes his or her mind about the retirement date?

A: Instead of having the member submit a revised retirement application, complete a Change to Certification for Retirement (VRS-49) 99kb. This form is processed immediately and separately from the retirement application. It prevents an account from being set up on the retiree payroll and benefits from being paid, which the member would need to repay while a second retirement application is processed.

For example: Harriet Simpson (fictitious name) changed her mind about retiring on July 1 and decided to retire October 1 instead. Her employer submitted a VRS-49. When this form arrived at VRS, it was prioritized to be processed within 24 hours and the retirement payroll information was revised to reflect the new date. If Ms. Simpson had not submitted this form, she would have received two pension checks based on the July 1 retirement date. She would have had to repay all retirement benefits received and would have had to submit the entire retirement application information again to begin retirement on the preferred date. This creates frustration on the part of the member and additional processing time and paperwork for her employer to complete.