Service Retirement

When will I be eligible for retirement?
How do I apply for service retirement?
How does VRS calculate my retirement benefit?
Does VRS have a mandatory retirement age?
What are my retirement options?
What if I wish to leave a benefit to someone at my death?
Can I change my retirement option once I retire?
When will I receive my first check?
What happens if I return to work after retiring?
When will I qualify for a cost-of-living increase and how much will it be?
Can I receive my retirement through direct deposit?
Does Social Security affect my retirement benefit?
Are retirement benefits taxed?

1. When will I be eligible for retirement?

You are eligible to retire with full benefits at age 65 if you have at least five years of service. You can also retire with full benefits as early as age 50 if you have at least 30 years of service. This applies to state employees, teachers and most political subdivision employees. Some political subdivisions have different requirements. SPORS, political subdivision employees in hazardous duty positions and VaLORS participants may retire with full benefits at age 60 with at least 5 years of service, or at age 50 with 25 years of service. You may retire with a reduced benefit as early as age 50 if you have at least 10 years of service, or as early as age 55 if you have at least 5 years of VRS service credit.

2. How do I apply for service retirement?

You must complete the Application for Service Retirement VRS-5 58kb, have it notarized and then completed and signed by your employer at least three months before your anticipated retirement date. You must also include a copy of your birth certificate, the birth certificate of your contingent annuitant (the person you want to receive a benefit after your death) if you chose a survivor option, a Request Income Tax Withholding Form VRS-15 61kb and a Direct Deposit Authorization Form VRS-57 27kb. State retirees must also include a Retiree Health Benefits Program Enrollment form. Retirement dates are always the first of the month

3. How does VRS calculate my retirement benefit?

Your benefit is based on your age at retirement, your total service credit and your average final compensation, which is the average of the 36 consecutive months of highest compensation in your history of VRS-covered employment. The amount of the benefit is calculated by taking 1.7 percent of your average final compensation and multiplying it by your total service credit.

If you are a member of the State Police Officers’ Retirement System (SPORS) or a sheriff covered under VRS, the amount of your benefit is 1.85 percent of your average final compensation multiplied by your total service credit. Political subdivisions may elect the 1.85 percent retirement multiplier for other full-time salaried local law enforcement officers, firefighters, emergency medical technicians and jail officers of regional jails or authorities. Check with your human resource officer to see if you qualify.

If you became a member of the Virginia Law Officers’ Retirement System (VaLORS) on or after July 1, 2001, the amount of your benefit is 2.0 percent of your average final compensation multiplied by your total hazardous duty service credit and 1.7 percent of your average final compensation multiplied by your total non-hazardous duty service. Members of VaLORS hired before July 1, 2001 had the choice to elect either a 2.0 percent retirement multiplier or the 1.7 percent retirement multiplier with eligibility for a special hazardous duty supplement.

In all cases, a reduction factor is applied for early retirement.

4. Does VRS have a mandatory retirement age?

No. VRS has no mandatory retirement age. However, judges, state police officers, and those law enforcement officers and firefighters who have the same benefits as state police officers have a mandatory retirement age of 70.

5. What are my retirement options?

You may choose to receive the maximum amount of your benefit over your lifetime (the Basic Benefit), or you may choose to receive a lower amount during your lifetime so that a benefit will be paid to your survivor (Survivor Options; see next question for more detail). The Basic Benefit is determined by your age at retirement, your years of credited service and the average of your 36 consecutive months of highest compensation (your average final compensation). Starting January 1, 2002, if you choose to work past an unreduced retirement, you are also eligible for the Partial Lump-sum Option Payment (PLOP). Depending on how many years past retirement you work, the PLOP gives you a cash payment – as high as 3 times your annual benefit amount – in a lump-sum right at the start of your retirement. Taking a PLOP will slightly reduce your monthly benefit. For more details, see our PLOP summary 77kb.

6. What if I wish to leave a benefit to someone at my death?

VRS offers you choices for taking what is called a Survivor Option. By taking a smaller benefit for yourself, at your death you can provide an income to another person that will continue for the rest of that person's life. You may customize a survivor option by specifying a percent (any whole number between 10 – 100%) of your reduced benefit that you wish to leave for your survivor. You yourself cannot receive less than 50% of the basic benefit. And your survivor cannot receive a greater benefit than you did. Example:

Basic Benefit and Survivor Option Comparison
Basic Benefit	Benefit with 30% Survivor Option	Survivor's Benefit
$1,000/mo	$909.50/mo	$272.85

7. Can I change my retirement option once I retire?

You may not change your retirement option if you chose the Basic Benefit or the Partial Lump-sum Option Payment (PLOP). You may change your option under some circumstances if you chose a survivor option. If you chose a survivor option, you may change to the Basic Benefit if:

your contingent annuitant (the person who would receive your benefit or a portion of your benefit after your death) dies,
you divorce your contingent annuitant and you have been married fewer than 20 years, or
you have been married for more than 20 years and have the written consent and proof of good health of your contingent annuitant.

If you change to the basic benefit from a survivor option, you are not allowed to later name another survivor option.

8. When will I receive my first check?

If VRS receives your retirement application 90 days in advance of your retirement date, you will receive your first check on the first of the month following the month you are last reported to VRS by your employer. For example: If you want to retire on July 1, VRS needs to receive your application no later than April 1. You stop working June 30, but your employer reports your June earnings to VRS in July. Therefore, you will receive your first retirement check on August 1.

9. What happens if I return to work after retiring?

You may return to work without affecting your retirement benefit as long as the position is not covered by VRS, the Judicial Retirement System, the State Police Officers' Retirement Systems, the Virginia Law Officers' Retirement System, or the Optional Retirement Plan. If your new job is covered by one of these systems, your monthly retirement benefit stops and you become a contributing member of that retirement system. Exception: Retired teachers who are rehired because of a teacher shortage may return to work without interrupting their retirement benefits, provided there is a break in service and the retiree did not leave under a local early retirement program.

10. When will I qualify for a cost-of-living increase and how much will it be?

You will be eligible for a cost-of-living increase the second calendar year after you retire. If you retire on September 1, 2002, for example, you will qualify for an increase on July 1, 2004, with the increase reflected in your August payment. The amount of the increase is the first 3 percent of the Consumer Price Index (CPI-Urban) and then a half of each percentage increase in the CPI from 3 up to 7 percent, with a maximum increase of 5 percent. View the COLAs that have been granted in recent years.

11. Can I receive my retirement through direct deposit?

Direct deposit is automatic for all new retirees. You must fill out the Direct Deposit Authorization Form VRS-57 27kb when you apply for retirement and attach a voided deposit slip from your bank or other financial institution.

12. Does Social Security affect my retirement benefit?

You will receive Social Security benefits in addition to your VRS benefit. Unless you retire due to a disability, your Social Security benefit does not affect your VRS benefit.

13. Are retirement benefits taxed?

Retirement benefits are generally subject to federal and state income taxes. A portion of each benefit payment may be excluded from taxable income if you have funds in the system that were contributed on an after-tax basis. You can have federal and state taxes withheld from your benefit through payroll deduction by completing the Request for Income Tax Withholding form VRS-15 61kb . If you do not file this form, VRS is required by law to withhold taxes from your monthly benefit based on a status of married claiming three allowances for federal and married with zero allowances for state income taxes. VRS will mail you a Yearly Tax Withholding Form (1099-R) each January.