In This Edition
It's Here: myVRS for Retirees
VRS extended access to myVRS to Retirees in June. Using this secure online system, retirees can:
- View benefit payment information, tax withholdings and cost-of-living adjustments.
- Review health insurance coverage, premiums and health insurance credit, if eligible.
- View life insurance coverage.
- View and update personal contact information.
VRS will publish a special edition of Retiree News this summer to include more information on myVRS and instructions for retirees to set up their secure personal online accounts. Employer Update will provide a link to the special edition when it’s available.
Look for Member Benefit Profiles in August
VRS will mail 2008 MBPs to employers for distribution to their employees in August. Your employees will be able to view their 2008 Member Benefit Profiles (MBPs) online, using myVRS, and compare their 2008 MBP to their 2007 and 2006 MBPs. They can access their MBPs through myVRS at any time and print them whenever they need a printed copy for their records.
The information displayed on the MBP is based on service credit and salary information you reported to VRS as of June 30, 2008.
Encourage your employees to review their MBPs carefully and report any discrepancies to VRS as soon as possible, using the Request for Review of Membership Records (VRS-70) 
71kb. Employees should enclose a copy of the MBP when submitting this form.
Employers With Online Option
If you elected to have your employees view their MBPs through their secure myVRS accounts this year, you will not receive printed MBPs. Instead, you will be notified by e-mail as soon as the MBPs are available for viewing in myVRS so you can notify your employees. You can print MBPs for employees who request them, using myVRS for Employers. Copies printed using myVRS will appear identical to the printed copies.
To access their 2008 MBPs online, your employees need to:
- Log into their myVRS for members account.
- After logging into their myVRS online account, select the “Member Benefit Profile (MBP)” link from the left navigation column.
- From the MBP page, select the “View 2008 Member Benefit Profile” link to view their MBP in a PDF file.
- To retain a copy for their records, select the print button from the PDF screen.
IRS Ruling Affects Employer Pick-Up Plans
Internal Revenue Service (IRS) Ruling 2006-43 requires employers to have formal authorization for pick-up plans by January 1, 2009. Pick-up plans allow employers to pick up or pay the member contribution rate of 5 percent and to allow purchase of prior service on a pre-tax basis.
Generally, the formal authorization is in the form of a written document, and most commonly, a resolution approved by the governing body. The irrevocable resolution must contain certain basic information that is required by the IRS ruling.
As a result of the IRS ruling, VRS is conducting a review of pick-up plan resolutions to ensure that they are compliant with the IRS ruling. State agencies are already in compliance.
To start the process, VRS recently sent a letter to local governments and school boards, outlining the requirements and including sample resolutions. Employers must return resolutions approved by their governing boards to VRS no later than September 30, 2008. VRS is required to ensure all employer pick-up plans are compliant with the IRS ruling. With your help, we can account for all employers’ pick-up plans by January 1, 2009.
Retiring Employees Can Increase Their Benefit with Unused Sick Leave
Your employees can increase their retirement benefit if they have unused sick leave at the time they retire. Eligible VRS-covered employees may use all or a portion of their unused leave to purchase service credit.
The cost to purchase service credit with payouts for unused sick leave is based on the actuarial rate. You can use the actuarial estimator on the VRS Web site under Employer Resources to assist employees with determining the cost.
Payment for unused sick leave is subject to income tax; however, the employee can add personal funds to make up for the tax withholding. The employee pays his or her employer, who in turn submits the payment for the full amount to VRS.
Only whole months can be purchased; rounding up is not permitted. For example, if an employee’s payout could purchase the equivalent of 10.7 months of service credit, only 10 months can be purchased.
Using myVRS, the employee can estimate his or her monthly retirement benefit and see how the additional service credit will affect the monthly retirement benefit.
To initiate this type of purchase, submit an Employer Certification of Accumulated Sick Leave Eligible for Conversion to Service Credit (VRS-26F) 38kb to VRS.
Important Information for State Employees
State employees who participate in the Virginia Sickness and Disability Program (VSDP) are not eligible to use their unused sick leave to purchase service credit at retirement. However, employees who have unused disability credits may convert those credits to service credit when they retire. The amount of service credit the employee can purchase is determined by dividing the total disability credits by 173 and rounding to the next whole number.
To initiate this type of purchase, assist the employee in completing and submitting the VSDP Conversion of Disability Credits (VRS-5A) 27kb to VRS.
457 Plan Auto Enrollment Update
Many eligible state employees are getting the advantage of earlier deferrals and the employer match by enrolling as soon as they are employed, rather than waiting to be enrolled automatically in the Commonwealth of Virginia 457 Deferred Compensation Plan (457 Plan). Unless they opt out, all newly hired and re-hired salaried state employees are enrolled automatically in the 457 Plan. It takes approximately 90 days after an employee receives the automatic enrollment notice from Great-West Retirement Services for the first deferral to begin. Employees can speed up the process, however, by self enrolling. They can enroll online at the 457 Plan’s Web site at www.vadcp.com. Or, they can enroll by calling the voice response system at 1-866-226-6682.
Counseling Employees Regarding Refunds after Deferrals Begin
Employees who opt out of the 457 Plan after the first deferral may receive a refund of the deferral amount as long as they observe specific timeframes. To be eligible for a refund, they must complete the 457 Plan Automatic Enrollment 90-Day Permissible Withdrawal Form 153kb and submit it to Great-West Retirement Services no later than 90 days after the pay date of the first deferral. Employees opting out and taking a refund of the deferral amount will receive a 1099R to use for filing their income taxes. The employer match is not refundable. The form is available at www.vadcp.com or by calling Great-West at 1-866-226-6682 (option 2) or 1-804-643-1882.
Learn more about 457 Plan auto enrollment.
Encourage Employees to Attend Regional Enrollment and Education Meetings
Regional Enrollment and Education Meetings (REEMs) are an excellent way to learn more about the 457 Plan. Three presentations are offered, according to individual needs and interest:
- Introduction to the 457 Deferred Compensation Plan: For non-participants and plan participants who want more general information.
- Management Strategies and Tools: For participants who want to better understand the importance of diversification and how to achieve it within the plan. Includes demonstration of online tools to help them manage their account and how to read a participant quarterly statement.
- Retirement Planning and Distribution Options: For participants who are retired or nearing retirement. Provides a comprehensive overview when combined with Account Management Strategies and Tools.
Choose the presentation or combination of presentations that best meet your needs and interests. Preregistration is not required.
Get the REEMs Schedule
(309kb)
Your Turn to Ask
Q: Can a retiree who selected the survivor option at retirement change that option if the survivor dies before the retiree does?
A: In most cases, the retirement payout option may not be changed after retirement. However, if the retiree chose a survivor option and the survivor pre-deceases the retiree, the retiree may name a new survivor.
Naming a new survivor could result in a decrease or increase in the benefit amount, depending on the age of the survivor. VRS re-calculates the benefit, based on the difference in age between the retiree and the newly named survivor.
There is another choice the retiree may make upon the death of the contingent annuitant. He or she may choose to revert to the higher Basic Benefit. This is sometimes referred to as the “Pop-Up” Option.
Naming a new survivor or reverting to the Basic Benefit upon the death of a survivor is a once-in-a-lifetime option.
To initiate a change in the Survivor Option, the retiree contacts the VRS Customer Contact Center for a Request for Estimate of Retirement Benefit Payout Option Change (VRS-5B). VRS calculates a new estimate of retirement benefits based on the changes requested. VRS mails the estimate with an Authorization to Change Retirement Benefit Payout Option (VRS-5C) to the retiree. The retiree must sign the VRS-5C, have it notarized and return it to VRS before any change can be made.
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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