In This Edition

1. Watch for Member Benefit Profiles to Arrive in September
2. VRS Uses Employer Survey to Guide Modernization
3. Virginia Sickness and Disability Program Increases Long-Term Care Benefit
4. Help Avoid Delays in Retirement Processing
5. Payroll Reporting Reminders
6. Remind New Faculty of Optional Retirement Plan Deadline
7. Deferred Compensation Plan Automatic Enrollment Begins January 1, 2008
8. Encourage Members to Observe National Save for Retirement Week

Have an idea for a future article?

Watch for Member Benefit Profiles to Arrive in September

Please distribute MBPs as soon as possible after you receive them. MBPs will also be posted in myVRS in late September. Report any discrepancies to VRS using the Request for Review of Membership Records (VRS-70) 71kb.

What’s Changed for This Year’s MBP?

The following information is new this year:

• The present value of a member's retirement benefit, an estimated value over a member's actuarial life expectancy. It assumes retirement on an unreduced benefit and annual cost-of-living adjustments. This is the estimated total amount that is paid out monthly over the member's lifetime, based on the value of today's dollar, and is not refundable. Only the amount that appears in the Member Contribution Account is refundable if the member leaves employment.
• Employer-paid contributions between 1980-1990, if applicable. While the member was credited with these contributions, they were not reported in previous years.

More information is available from the What's New 2007 MBPs Arriving Soon article.

VRS Uses Employer Survey to Guide Modernization

In June VRS conducted a survey with Southeastern Institute of Research to find out how employers interact with VRS and what tools and information they might expect from VRS in the future.

The online survey was sent to 1,665 agency heads, human resource, payroll and finance officers of state agencies, local governments and school boards.

VRS Director Robert P. Schultze expressed his thanks to all employers who participated in the survey. “Important information gathered from this survey will help us build new channels of service for employers and members,” he said. Results are guiding the Modernization Project, a long-range undertaking to update VRS systems, business processes and customer services.

Virginia Sickness and Disability Program Increases Long-Term Care Benefit

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.

More information is available from the What's New Long-Term Care Benefit to Increase article.

Help Avoid Delays in Retirement Processing

A retirement application that is not completed correctly or an incomplete retirement application can result in delays in retirement processing. Help your employees get their retirement benefits on time by reviewing each retirement application to make sure it includes:

• A specific retirement date.
• A signature and spouse’s signature, if applicable; no initials. (A spouse may not sign prior to the date the member signs.)
• No more than one payout option elected.
• A completed Employer Certification (Part E).

Application for Service Retirement (VRS-5) 58kb

Payroll Reporting Reminders

Report Salary Increases

Salary information is critical in calculating an accurate average final compensation. It is particularly important for employees who receive a salary increase in December 2007, and who plan to retire on or after January 1, 2008. Report salary changes by submitting a Change to Certification for Retirement (VRS-49) 99kb.

Notify VRS of Changes in Payroll Reporting Systems

Notify the VRS Employer Reporting department when you make a change to a payroll system. If you are submitting a payroll file that has been generated from a new payroll system, VRS is available for consultation and testing. By testing with VRS, you will have a smoother transition in reporting your monthly payrolls. Any new system needs to include the same data elements and file format as you use today.

Remind New Faculty of Optional Retirement Plan Deadline

Let your new faculty know about the deadline for electing the Optional Retirement Plan (ORP) for Higher Education. The Code of Virginia allows employees with faculty rank to choose between the retirement benefits provided by the VRS defined benefit plan and the Optional Retirement Plan (ORP) for Higher Education.

Eligible employees wishing to choose the ORP must do so within 60 days from the date of employment. Employees elect the ORP by completing the Election to Participate – Optional Retirement plan for Higher Education (VRS-65) 28kb. If they do not complete and submit the VRS-65 within the 60-day period, they will be covered by the VRS defined benefit plan.

In August, VRS mailed an Information Bulletin to institutions of higher education. This bulletin provides more information on eligibility and enrollment procedures. Read the Bulletin 78kb.

Deferred Compensation Plan Automatic Enrollment Begins January 1, 2008

Starting January 1, 2008, newly hired salaried state employees will be enrolled automatically in the 457 Deferred Compensation Plan (457 Plan). The 2007 General Assembly passed legislation making enrollment in the 457 Plan automatic for salaried state employees unless they opt out of the plan.

Automatic deferrals of $20 per pay period with a $10 employer cash match begin the first pay date occurring 90 days after Great-West Retirement Services, the record keeper for the plan, sends the new employee an automatic enrollment notice. After the deferrals begin, new employees have an additional 90 days to opt out of the program.

Great-West Extends Online Option to Non-CIPPS Employers

In preparation for auto-enrollment, Great-West is extending the online options to state employers that do not report through the Commonwealth Integrated Payroll/Personnel System (CIPPS). Effective October 1, 2007, employees of agencies that have chosen to use this method will have a new online option for making changes to their 457 Plan and Cash Match Plan. By logging in to www.vadcp.com, employees can increase or decrease deferral amounts or reinstate or suspend deferrals.

Employees who do not wish to use the online option or KeyTalk, the telephone automated system, may continue to use the Payroll Authorization Form. The paper form is required if a participant is using the Standard Catch-Up or Military Leave Make-Up or deferring unused sick and annual leave to the plan. The paper form also is needed when a participant changes agencies to ensure that deferrals continue.

Read the DCP Agency Update regarding processing changes (15kb).

Encourage Members to Observe National Save for Retirement Week

The Commonwealth of Virginia is joining public and private retirement plan sponsors around the country to support National Save for Retirement Week, October 21-27. Congress designated this week as a national observance to raise public awareness about saving for retirement through individual and employer-sponsored savings plans.

You can help celebrate National Save for Retirement Week by promoting the resources VRS makes available free of charge to members:

• Retirement Education Seminars and Group Counseling Sessions
• Regional Enrollment and Education Meetings (for eligible state employees and political subdivision employees)
• Newsletters and publications on the VRS Web site
• Annual Member Benefit Profile
• Web resources, including calculators and personal planner in myVRS

For more information about National Save for Retirement Week and other resources you can use to promote retirement saving, visit these sites:

• ICMA Retirement Corporation
• The National Association of Government Defined Contribution Administrators, Inc.

Editor’s Note: We’re interested in hearing about how you celebrate National Save for Retirement Week. Share your ideas with others by sending an e-mail to the editor.