Visit the Virginia Retirement Sytem website Employer Update: A publication for VRS Employers
July 2009 A Publication for VRS Employers

Board Approves Increase in Optional Life Insurance Coverage

The VRS Board of Trustees approved an increase in the optional life insurance maximum coverage amount available for employees from $600,000 to $700,000. The spouse maximum coverage limit also increased from $300,000 to $350,000, effective July 1, 2009.

Members who are covered for basic group life insurance may purchase optional group life insurance coverage in an amount equal to one, two, three or four times their compensation, not to exceed $700,000.

Minnesota Life sent letters to employers in June, announcing the increase. Minnesota Life also sent letters to employees who were capped at the old maximum to tell them that their insurance was increasing due to the change and to inform them of the amount of their new premiums.

Training on Employer Reporting Now Available Online

woman at a computer

Political subdivisions and school boards can now get Employer Reporting online training under the Employer Training section of the VRS website. Select from four e-learning modules:

  1. The Basics of Employer Reporting
  2. Paying VRS and the Statement of Account
  3. Submitting Adjustments
  4. Resolving Suspense

You can take one or all four modules at your own pace. The modules use interactive learning elements, such as simulated data-entry in employer reporting software. Each module has a quiz to help you assess your progress. VRS will provide Certificates of Completion upon request.

Print Up to 50 MBPs at a Time in myVRS for Employers

myVRS: At Your Service

A new feature in myVRS for Employers enables employers to print up to 50 Member Benefit Profiles (MBPs) at a time, rather than printing one at a time. Employers search for their employees by the first letters of the last name or by the last four digits of the Social Security number.

To print MBPs, first access the 2009 Annual MBP Detail Report, when it is available in the myVRS for Employers Reports tool, usually just prior to when MBPs are available in September. This report shows the total number of MBPs prepared for your employees, displays actual data used to compile the MBPs and lists employees who will not receive MBPs and the reasons the MBP is not provided. From this report you can select those MBPs you need to print.

How do I access the MBP Detail Report?

  1. Log-In to myVRS for Employers.
  2. Click the Employer Options tab.
  3. Click the Choose Employer link from the left navigation if you have access to more than one employer code.
  4. Enter a five-Digit Employer Code and click the Look Up button.
  5. Click the Reports link from the left navigation.
  6. Then, select the Annual MBP Detail Report from the reports list.

How do I print MBPs?

  1. From the Online Reports list, select the Annual MBP Detail Report.
  2. Filter the listing to locate the employees who need printed MBPs.
  3. Check the box to the left of each employee’s name.
  4. Once you have selected the employees (up to 50), click on the “Export Selected” icon. This will generate one large PDF of the MBPs you selected for printing. You may print the file or save it to print later.

Log-in to myVRS for Employers

Legislative Changes: Get Latest Forms and Publications on VRS Website

The forms listed below were updated July 1, 2009 to remove the notarization requirement:

The following forms were revised to reflect legislative changes:

New versions of the Applying for Service Retirement Booklet pdf icon, Applying for Disability Retirement Booklet pdf icon and the Pre-Retirement Planning Guide pdf icon have been posted to the website. The member handbooks and the Virginia Sickness and Disability Program Handbook for Participants (VSDP) pdf icon 857kb also have been updated with addenda posted on the website. Please print and distribute the addenda with all copies of handbooks you may have in stock.

To ensure you have the latest version of forms and publications, always access them from the VRS website.

Defined Contribution Plans Update

Visit the New Employer Resource Center on DC Plans Website

The Employer Resource Center for information and updates on the defined contribution plan is now available to employers. The website includes:

  • Schedule for DC Regional Education Meetings
  • Plan publications and forms with online ordering capability
  • Investment performance and fact sheets
  • Access to employer webinars
  • Contact information for Registered Representatives
  • A new Guide to the Web & Information Phone Line.

Go to Resource Center for VRS Employers

Counsel Employees about IRS Rules Governing Distributions

The Internal Revenue Service (IRS) determines when and how participants can take money out of tax-deferred VRS defined contribution plans. Generally, participants can take money out of the plan only after termination of employment with the employer that offers the plan and after satisfying a break–in-service requirement.

To comply with the IRS rule, VRS requires a break in service of at least one full calendar month during which the employee receives no compensation or benefits from the employer.

Example: An employee leaves employment during the month of June. July serves as the one full month of a break in service. In August, VRS receives the last employer report and approves a distribution request by the second week in August. ING would issue the payment a few days later.

A break in service does not include summer breaks, periods of leave without pay, educational leave, sick leave and periods of time during which the employee would not normally be at work. For example, teachers on other than 12-month contracts and who receive service credit through the end of June, would be eligible for their first distribution in October since September is the first month they would normally work after the summer break.

After retirement, employees may want to return to work as a wage employee with the former employer or another employer that participates in a tax-deferred VRS defined contribution plan. Employees who wish to take money out of the plan must submit the request for distribution during the break in service and have it processed prior to returning to work in the wage position.

Under the 457 Plan, a few types of distributions do not require a break in service:

  • Withdrawal of balances of $5,000 or less, if the employee has not made contributions to the Plan for the last 24 months.
  • Withdrawals from the 457 Plan to pay for approved VRS service credit.
  • Withdrawals for unforeseen hardships, when the employee meets IRS requirements.
  • Withdrawal of any automatic contributions by an employee who opts out of automatic enrollment in the 457 Plan, provided the employee opts out and requests a distribution within 90 days of the first contribution.

Your Turn to Ask

Q: What is meant by a break in service and why is it important?


A: A break in service is a period of at least one full calendar month when the employment relationship has been terminated and the employee is not working in any capacity for you, including part-time and wage positions. This break-in-service is important because Internal Revenue Service (IRS) guidelines prohibit distributions from a qualified pension plan to members who are actively employed in either a full-time or part-time hourly position with an employer participating in that plan.

To comply with the IRS guidelines, VRS requires this break in service of retirees returning to work in non-covered positions with the same employer the employee retired from. VRS retirees who accept non-covered employment with the same employer must have a bona fide break in service of at least one full calendar month after they retire to continue receiving their benefits. Non-covered employment includes temporary, part-time hourly and adjunct faculty positions that do not provide VRS benefits.

Example: An employee terminating on April 15 is eligible to return to non-covered employment with the same employer June 1.

Public school divisions and political subdivisions are considered separate employers. However, the Commonwealth of Virginia, including all state agencies and public colleges and universities, is considered one employer.

The break in service must occur during a period the employee would normally have worked. Summer months cannot be counted as part of a break in service for certain contract employees, such as teachers, who do not normally work during the summer. A break in service also does not include periods of leave without pay, educational leave, sick leave and periods of time during which the employee normally would not be at work.

Example: A teacher with a contract period of August 25, 2008 – June 14, 2009 may return to the same employer in a non-covered position no earlier than October 1, 2009.

Before hiring a VRS retiree in a non-covered position, read the Return-to-Work Guidelines and Checklist for Employers.

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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