In This Edition
Track Active Bills Related to VRS Benefits
A total of 56 bills related to VRS benefits have been filed since the 2008 session of the Virginia General Assembly convened on January 9. Get the summaries and check on the status of active bills by visiting our Legislation page.
myVRS Offers New Retirement Planning Tool
VRS members have a new tool for financial planning. In January VRS expanded myVRS, the secure member area of the Web site, with the release of the Retirement Planner.
Using the Retirement Planner, members can create a comprehensive “what-if” picture of their estimated income and expenses in retirement. Members can:
- See estimated gross and net retirement income in current and future dollars.
- Estimate monthly income from tax-deferred compensation accounts or annuities.
- Try alternate tax-deferred contribution amounts and calculate the impact of different rates of return.
- Younger members can see how even small increases in savings or tax-deferred contributions early in their careers can yield big dividends when they retire.
- Calculate a Social Security estimate.
- Estimate net income after deducting health insurance premiums and state and federal tax withholding.
- Include a spouse’s income and retirement plans.
- Itemize retirement expenses and apply inflation factors.
Keep in mind:
- The Retirement Planner estimates potential income and expenses as of the first month of retirement. It does not project changes in retirement income over a lifetime.
- Social Security estimates simply duplicate the Social Security Administration’s calculator. If a member is not eligible for Social Security on the chosen retirement date, an estimate does not display in the Planner.
“We’re excited about this new retirement planning tool,” says VRS Director Robert P. Schultze. “It will provide a more complete picture of income and expenses immediately upon retirement and help eliminate surprises, so often mentioned by members, after seeing their net retirement income reduced by tax withholding and insurance premiums.”
Want to learn more about the Retirement Planner?
VRS will hold webinars for employers on the Retirement Planner later this month. Watch for webinar announcements under the Employer tab of the VRS Web site.
Inform Employees of 457 Plan Automatic Deferrals
Effective January 1, 2008, all newly hired and re-hired salaried state employees are enrolled automatically in the Commonwealth of Virginia 457 Deferred Compensation Plan (457 Plan) unless they opt out of the plan or they are actively contributing to a 403(b) tax deferred annuity. The 2007 General Assembly passed legislation making enrollment in the 457 Plan automatic.
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, the employee has an additional 90 days to opt out of the program and request a refund of any deferrals made.
Would you like an on-site information meeting?
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).
Read more about auto enrollment.
Read Q&As from December 6 webinar 
55kb.
457 Plan Will Offer New Investment Option in 2008
457 Plan participants will have a new investment option in spring 2008. Participants will have the opportunity to invest in shares of the VRS defined benefit plan. The new option is referred to as a Unitized Pool (UP). The UP Fund will be invested on a commingled basis with the large VRS Trust Fund, using the same investment strategies and managed by the same VRS professionals.
While this type of investment is more common in the private sector, public sector plans are beginning to adopt this strategy. Unitizing gives 457 Plan participants the same investment expertise, risk monitoring and account rebalancing provided by the defined benefit plan.
Many VRS investments are not liquid, so trading in and out of the UP Fund will be allowed only quarterly. And, as with other investments available to participants, the UP Fund cannot guarantee earnings and will incur risks like other variable investments.
Watch for more information to come.
Regional Enrollment and Education Meetings Start Up Again in March
Great-West Retirement Services will offer Regional Enrollment and Education Meetings (REEMs) beginning in March 2008. These meetings will include a new presentation, “Introduction to the 457 Deferred Compensation Plan,” and a revamped presentation entitled “Account Management Strategies and Tools.”
These meetings are appropriate for eligible new employees who are enrolled automatically, existing participants and those who want additional information about the 457 Plan. The presentation entitled “Retirement Planning and Distribution Options” is for participants who are retired and those approaching retirement.
Your Turn to Ask
Q: Can an employee use purchased prior service credit to qualify for the Partial Lump-Sum Option Payment (PLOP)?
A: With the PLOP, an employee may receive up to three years of benefits in a lump-sum payment for working beyond the time he or she becomes eligible for an unreduced retirement benefit.
An employee may use purchased service to reach the required number of years to retire on an unreduced retirement benefit; however, the employee may not use purchased service to reduce the time required to work past becoming eligible for unreduced retirement. An employee must be actively employed and earning service credit during that time to qualify for the PLOP.
Example: John, a 57 year old VRS member, has 27 years of service. John is eligible to purchase six years of prior service credit. After purchasing three years, John will reach the required 30 years for an unreduced retirement benefit. If he wants to take the PLOP; however, John must continue to work at least one year past the date he becomes eligible for an unreduced benefit. Working one year past eligibility qualifies John for a one-year PLOP. For a two-year PLOP, he must work two years after becoming eligible for an unreduced retirement benefit; and for a three-year PLOP, he must work three years past eligibility. During the time he is working, John also may continue to purchase any remaining prior service he has, according to policy.
Q: I have an employee who temporarily cannot perform all the duties of the job. Do I need to require this employee to file a claim for VSDP benefits?
A: It is not necessary to require an employee to file a claim when he or she has a reasonable short-term restriction in job duty, but no lost time and the agency is able to make accommodations.
If an employee must lose income due to the disability, he or she may be eligible for partial disability benefits. For new claims filed as of November 13, 2007, when an employee is working but does not have the ability to complete all job functions, UNUM applies the 80 percent of pre-disability earnings test to the claim. It is considered a partial disability when an employee is able to perform some but not all of the duties of the job or can perform all duties of the job on a part-time basis. In addition, the employee must be earning less than 80 percent of pre-disability income as a result of the disability.
Need more information? Send an email to Mike Pote at MPote@unum.com
Ask your question
To submit a question, send an e-mail to the editor. Only questions of a general nature are published. If your question is an individual case or involves sharing any personal information, such as Social Security number, do not use e-mail. Instead, call the VRS Customer Contact Center at 1-888-VARETIR (827-3847) or contact your Employer Representative.
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