In This Edition

1. Employer Update Arrives Monthly
2. VSDP Long-Term Care Benefit Increases
3. 457 Plan Automatic Enrollment Begins
4. Regional Education and Enrollment Meetings Start Again in March
5. Retirees Open to Online Services, Survey Shows
6. Your Turn to Ask

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Employer Update Arrives Monthly

Beginning this month,VRS will publish Employer Update the first Monday of each month. Don’t miss a single issue. Become a subscriber and you’ll receive an e-mail with a link to the latest issue as soon as it’s posted.

Subscribe now to Employer Update.

VSDP Long-Term Care Benefit Increases

On December 1, 2007 VRS began administering the VSDP long-term care plan previously administered by Aetna. Also effective December 1, the maximum VSDP long-term care daily benefit increased from $76 to $96 and the lifetime maximum increased from $54,750 to $70,080.

Read more about the VSDP Long-Term Care Benefit.

457 Plan Automatic Enrollment Begins

Effective January 1, 2008, all newly hired and re-hired classified state employees are enrolled automatically in the Commonwealth of Virginia 457 Deferred Compensation Plan (457 Plan). Great-West Retirement Services, the record keeper for the 457 Plan, is mailing New Employee Packets to the home addresses of employees hired on and after January 1, 2008.

Learn more about 457 Plan Automatic Enrollment.

Regional Education and Enrollment Meetings Start 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 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.

Get the REEMs schedule 309kb.

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).

Retirees Open to Online Services, Survey Shows

A recent survey of VRS retirees suggests that, while direct mail is still the preferred method of communication, more retirees will be open to online communication in the future. Eighty percent said they would be interested in secure online access to their retiree information.

When asked to rank the information they would like to see online in order of importance to them, respondents said cost-of-living adjustments, benefit payments, tax withholding and health insurance. They also want to be able to update personal information online.

The survey, conducted for VRS by the Southeastern Institute of Research, Inc. (SIR), asked VRS retirees who retired within the last five years about their retirement experience and future expectations.

Over three quarters of those surveyed said they felt prepared coming into retirement and are generally satisfied with retirement life. They are satisfied with the role VRS and their employers played in their retirement; however, most respondents said they would like to receive a little more information than they are currently receiving. Health insurance information, information about their benefits and the retirement process in general and tax information topped their list of information needs.

“These results are excellent news for the development of myVRS for retirees,” said VRS Director Robert P. Schultze. Members and employers currently have secure online access through myVRS and myVRS for Employers. A version for retirees is planned in 2008.

“It’s also great news for our modernization program,” says Schultze. “One of the important objectives of modernization is delivering the information members, retirees and employers want through their preferred channels. This survey tells us that the online channel will be important to retirees in the future.”

Your Turn to Ask

Q: When an employee leaves a VRS-covered position and applies for a refund, when should I send the refund application to VRS?

A: Send the Request for Refund (VRS-3) 57kb to VRS after you make the last payroll contributions to VRS on behalf of the employee.

Complete Part B of the VRS-3 to certify that the employee terminated employment and, to the best of your knowledge, is not returning to work in a part-time position. An employee who moves to a part-time or wage position from a full-time position with the same employer without a 30-day break in service is not eligible for a refund. Include the date that the last payroll report will be submitted to VRS on which retirement/group life insurance contributions will be reported for the terminating member. The refund process takes 45-60 days from the date the last payroll contributions are made on behalf of the employee or from the date VRS receives a valid VRS-3, whichever is later.

Remind employees that taking a refund cancels all VRS benefits. Employees who are vested (have at least five years of service) are eligible for a future retirement benefit and may need a retirement estimated generated prior to making the decision to take a refund.

Employees taking a refund need to be aware of the tax consequences of having the refund paid directly to them. This information is included on the IRS 402(f) – Special Tax Notice 58kb that accompanies the VRS-3.

Use the current version of the VRS-3 provided on the VRS Web site. Any forms with an earlier revision date should be discarded.

Read more about refunds in the Employer Manual Ch. 7 - Refunds 174kb.