In This Edition

1. 2010 Legislation: Frequently Asked Questions
2. Voluntary Long Term Care Initial Enrollment Period Extended Through May 21
3. 457 Plan Webinars to Review Impact of 2010 Legislation
4. Back to Basics: Purchase of Prior Service Contracts and Leaving Employment
5. Your Turn to Ask

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2010 Legislation: Frequently Asked Questions

The General Assembly adopted several benefit plan changes for current and future VRS members during the 2010 General Assembly session. The governor provided his amendments, which were approved by the General Assembly, to a few of these items during the reconvened session on April 21. Read the updated Legislative Summary 363kb reflecting those amendments as well as Frequently Asked Questions 96kb regarding this legislation.

Voluntary Long-Term Care Initial Enrollment Period Extended Through May 21

The initial enrollment period for the Commonwealth of Virginia Voluntary Group Long Term Care Insurance Program has been extended to May 21. If you provide this program, please communicate the extended deadline to eligible employees. As a reminder, no medical underwriting (proof of good health) is required for employees under age 80 who enroll during this initial period. Spouses under age 66 also may apply with some underwriting until May 21.  This is a limited-time offer and will not be available under the same terms each year.  Eligible employees can enroll online or call Genworth Life Insurance at 1-866-859-6060 to order an information kit.

Employees who work at least 20 hours a week for state agencies, public colleges and universities and political subdivisions or school divisions that have elected the program are eligible to enroll. Eligible participants also can enroll a spouse, adult children, parents, parents-in-law, step parents, step parents-in-law, grandparents, grandparents-in-law, step grandparents and step grandparents-in-law who are between the ages of 18 and 79.

Retirees receiving a VRS benefit and deferred members who have at least five years of service credit also are eligible and may enroll at any time. Medical underwriting is required for a retiree or deferred member applying for the program.

Since the program is employee-paid, it does not cost employers anything to offer it. If you are a school division or political subdivision employer that has not elected the program, consider adding this program to your benefits package, particularly if you do not offer a long-term care benefit. For more information, visit Genworth's website for VRS employers or contact Cathi Ames at GLTCInfo@genworth.com.

Learn more about Voluntary Long-Term Care Initial Enrollment.

457 Plan Webinars to Review Impact of 2010 Legislation

Register for one of the following employer webinars to learn more about how legislation adopted by the 2010 Virginia General Assembly will affect the defined contribution plans. The webinars will include information on changes to eligibility for the standard catch-up and the impact of plan design changes on the optional retirement plans:

Encourage your employees to attend a 457 Deferred Compensation Plan Regional Education Meeting 24kb in your area. Check the Resource Center for VRS Employers for information on the 457 plan as well as the optional retirement plans and the Virginia Supplemental Retirement Plan.

Back to Basics: Purchase of Prior Service Contracts and Leaving Employment

Employees with eligible prior service may purchase their service through a variety of methods. One method is the pre-tax salary or after-tax payroll deduction contract that is established between you and the employee. Employees preparing to leave their positions who are purchasing service through a payroll contract have these options:

After-Tax Payroll Deduction Contract

Employees purchasing service through an after-tax payroll deduction contract may purchase the remaining service in a lump sum before leaving employment. The employee should send a letter indicating his or her intent to purchase the remaining service and the last day of employment to VRS at P.O. Box 2500, Richmond, VA, 23218-2500. VRS will send a new cost letter to the employee with instructions on how to submit payment.

Employees who leave their positions without purchasing their remaining service in a lump sum will not forfeit the service if they return to covered employment. However, the cost may be based on a higher actuarial cost if their three-year eligibility period has expired before they return to work. The eligibility period begins when an employee is first eligible to purchase service.

Pre-Tax Salary Reduction Contract

If applicable, employees may contract to purchase as much service as they wish, up to the allowable amount, under this contract method. However, VRS strongly encourages employees with more than 12 months to purchase to consider purchasing only 12 months at a time. If the employee leaves before purchasing all service under a pre-tax salary reduction contract, he or she will forfeit the remainder. However, if the employee returns to a covered position after at least a 30-day break in service, the purchase can be completed on an after-tax basis through payroll reduction. A member may not purchase this service using a lump-sum payment.

Employees who are involuntarily separated may be able to suspend a pre-tax salary reduction contract by claiming a hardship as provided under the Internal Revenue Code. To claim a hardship, the employee should send a letter to VRS at P.O. Box 2500, Richmond, VA, 23218-2500 indicating his or her intent to purchase the remaining service or request that the contract be suspended and enclose a signed letter from you certifying involuntary separation.

If an employee moves to another covered position with a VRS participating employer, the new employer can transfer the payroll deduction contract by submitting a new Agreement for Salary Reduction to Purchase Service Credit (VRS-26E) 56kb within 30 calendar days of the employment start date.