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Member News Archives | Fall 2010 A Publication for VRS Members

Introducing Member News Online

Welcome to your first issue of the online Member News. You will find that the electronic newsletter is a good way to:

  • Keep up to date on your VRS benefit news
  • Link to answers to your benefit questions
  • Link to further information on retirement planning
  • Complete forms.

We hope you enjoy having Member News just a click away.

Your 2010 Online Benefit Statement Coming Soon

member benefit profile

Your Member Benefit Profile (MBP) for 2010 will be available through the secure myVRS online system. The MBP is your annual benefits statement based on information your employer reported to VRS as of June 30, 2010. Your employer will notify you when you can look up your MBP in your myVRS member online account.

Your MBP shows your:

  • VRS membership date
  • Last reported salary
  • Total service credit
  • Earliest unreduced and reduced retirement eligibility dates
  • Estimated retirement benefit amounts
  • Life insurance coverage
  • Amount of funds in your member contribution account
  • Estimated value of your retirement benefit

Accessing Your MBP

First, log into your myVRS member online account by going to myVRS. From your account home page, select the Member Benefit Profile (MBP) link from the left column. From your MBP list, select your 2010 statement to view and print your statement.

  • Not registered? Register Now
  • Registered but forgot your password? You can still get into your account as long as you can confirm your identity and answer your secret question. Select Forgot Username or Password from the myVRS Welcome page. If you need help, follow the link to myVRS Help.

Were You Hired Before July 1, 2010?

As a result of legislation adopted during the 2010 session of the General Assembly, VRS now has two plans: Plan 1 and Plan 2. You are in Plan 1 if you:

  • Were working full time in a VRS-covered position before July 1;
  • Left covered employment but did not withdraw your funds and have service credit in VRS or an account balance with a Virginia optional retirement plan as of June 30, 2010;
  • Retired before July 1 and have returned to work in a covered position; or
  • Have a signed employment contract before March 15, 2010, even if you began working in a VRS-covered position on or after July 1.

Find out more about your Plan 1 benefits.

Were You Hired on or after July 1, 2010?

You are in the VRS Plan 2 if you:

  • Were working full-time in a VRS-covered position on or after July 1; or
  • Were previously employed in a covered position, withdrew your funds and returned to covered employment with no service credit in VRS or no account balance in a Virginia optional retirement plan.

Find out more about your Plan 2 benefits.

Enhancing Your Benefit

You may be able to enhance your VRS retirement benefit by purchasing eligible prior service as credit in VRS for specific types of leave or other public service. Prior service credit counts toward the five years needed to become vested, eligibility for retirement and eligibility for the health insurance credit. Prior hazardous service credit also counts toward eligibility for the hazardous duty supplement, if you have enhanced coverage for hazardous duty service and meet the requirements for the supplement when you retire.

To be eligible to purchase prior service, you must be an active member. Your cost for the service will depend on whether you purchase prior service within your eligibility period or after your eligibility period. The eligibility period varies depending on whether you are in the VRS Plan 1 or the VRS Plan 2 (see below).

Several payment methods are available, including a lump-sum payment, trustee-to-trustee transfer of funds, pre-tax rollover, after-tax payroll deduction or pre-tax salary reduction. You may be eligible to use a lump-sum payment with a payroll deduction or a salary reduction. For more information, contact your human resource office.

Are You in Plan 2?

Effective January 1, 2011, you will become eligible to purchase up to 48 months of the following types of prior service:

  • Active duty military service
  • Full-time salaried federal service
  • Full-time salaried public service other than previous VRS service
  • Non-covered service with a VRS-participating employer
  • Approved leave for the birth or adoption of a child
  • Approved educational leave
  • Non-ported service

If you apply to purchase this service within one year of January 1, 2011, your cost will be based on a normal cost rate as a percentage of your compensation or average final compensation. Normal cost is the average cost of one year of VRS service credit. If you purchase this service after your one-year eligibility period, your cost will be based on an actuarial equivalent rate. Your cost may be higher.

If you have VRS refunded service or were on active duty military leave, you may apply for this service now or at any time while you are an active member. You do not need to wait until January 1, 2011. For VRS refunded service, your cost will be 5 percent of your compensation or average final compensation. If you purchase refunded service after three years, your cost will still be 5 percent, but you will be required to use a lump-sum payment.

Are you in Plan 1?

Read more about purchasing prior service credit.

Options if You Leave Your Job

You have choices if you leave your job and do not retire. You can:

  • Take a refund of your member contributions and interest in your member contribution account; or
  • Leave your funds with VRS and become a deferred member.

Refunds and Vesting

If you request a refund and are vested (you have at least five years of service credit), you are eligible for a full refund of your member contribution account balance. If you are not vested, you are eligible to take a refund of the contributions you have made to your member contribution account, plus accrued interest on this contribution balance. As a non-vested member, you are not eligible for a refund of any contributions made by your employer after July 1, 2010, or the interest on these contributions.

Taking a refund cancels your membership and eligibility for any future benefits. If you have your refund paid directly to you, pre-tax contributions will be subject to tax withholding at the time the refund is paid. You can request a rollover of your member contributions and interest to an Individual Retirement Account (IRA) or another qualified plan. Before requesting a refund, read the IRS 402(f) Special Tax Notice to learn more about rollovers and the tax consequences of a lump-sum payment of your refund.

To request a refund, submit a Request for Refund (VRS-3). Refunds are effective no earlier than one full calendar month after your employer reports you as terminated from employment, including from non-covered employment. If you request a refund within six months of leaving your job, submit the VRS-3 to your human resource office. After six months, submit the notarized form to VRS. Allow 45 to 60 days for your refund request to be processed.

Deferred Membership

If you leave your funds with VRS, you will become a deferred member. If you are vested, you may be eligible for a future retirement benefit if you meet the age and service requirements for your plan. If you return to covered employment, member contributions and the service credit you earn upon reemployment will be added to your member record.

Are You in Plan 1?

As a member of VRS Plan 1, if you take a refund and return to work in a VRS-covered position, you will be rehired under Plan 2.

Learn more about leaving employment.

State Police Officers Have Additional Protection under VSDP

If you are a state police officer covered under the Virginia Sickness and Disability Program (VSDP) and you suffer a work-related illness or injury on or after July 1, 2010 in the line of duty, you may be eligible for income replacement equal to 100 percent of your pre-disability income for up to six months.

You also may be eligible for an additional six months of short-term disability at 100 percent of your pre-disability income if the Superintendent of State Police certifies based on a medical evaluation that you are likely to return to service within another six months.

If you are still disabled after 12 months, you will go on long-term disability. For more information about whether you qualify, contact your human resource office. For more information about VSDP, see Virginia Sickness and Disability Program.

Cash Match Temporarily Reduced

Legislation passed during the 2010 session of the General Assembly temporarily reduced the maximum employer cash match for members who participate in the Commonwealth of Virginia 457 Plan Deferred Compensation and Cash Match Plans or a 403(b) plan. The cash match is currently $10 per pay period. Effective July 1, 2011, it will return to a maximum of $20 per pay period depending on the amount you contribute to your plan.

Read more about the 457 Plan.

Celebrate National Save for Retirement Week by...Saving

retirement weekOctober 17-23 is National Save for Retirement Week. If you are not putting money away for retirement, take this opportunity to get into the habit. Or look at what you are saving now to see if you can increase the amount. Even $10 more per pay period could have a big impact on your future nest egg.

National Save for Retirement Week was created to raise awareness of the importance of saving for retirement and the availability of employer-sponsored retirement plans, such as the Commonwealth of Virginia 457 Deferred Compensation Plan, the 403(b) plan and other deferred savings plans. Financial experts say you will need at least 80 percent of your pre-retirement income to live comfortably in retirement. Personal savings, combined with your future VRS retirement benefit and Social Security, will help you meet your retirement income target.

Learn more about National Save for Retirement Week.

Use myVRS to Plan Your Savings

As a member of VRS, you have instant access to myVRS, one of your most important resources. This secure, online system is your personal avenue toward securing your future. You can estimate your income and expenses upon retirement and track your savings progress through the myVRS Retirement Planner. If you participate in the 457 and Cash Match Plans, your account balance will display in the planner.

If you participate in a 403(b) plan, an IRA or another tax-deferred savings plan, enter the balances of your account to estimate your retirement income and see a complete picture of your retirement savings progress.

Log into or register for myVRS.

Employed with a School Division or Political Subdivision? Voluntary Long-Term Care Program Open Enrollment Coming in the Fall

Missed signing up for the Commonwealth of Virginia (CoVa) Voluntary Long Term Care Insurance Program this past spring? If you work for a participating political subdivision or school board, you’ll have another chance during the fall open enrollment scheduled for October 16 through December 10. During open enrollment you will not have to provide evidence of insurability (proof of good health). Proof of good health will be required of any family members you enroll.

Long-term care services are not covered by most medical insurance plans. If you need them and do not have long-term care coverage, these costs could quickly deplete your savings.

VRS has contracted with Genworth Life Insurance Company as the insurer for the Commonwealth’s Voluntary Group Long Term Care Insurance Program. Contact your human resource office for more information about eligibility.

If you are a state employee, you can enroll in the CoVA long-term care program at any time, but must provide evidence of good health to be eligible.

State Employees Can Contribute Bonus to Deferred Savings Plans

If you are a state employee and participate in the 457 Plan or are a faculty member with a 403(b) plan as well as a 457 plan, you can defer state and federal income tax on your December 1 bonus payment by contributing some or all of the bonus to your plan. Submit a Payroll Authorization One-Time Deferral form pdf icon 80kb to your payroll office by November 12. Enter the amount you wish deferred or state “all” in the amount box if you wish to defer the entire amount.

If you are not enrolled in the 457 Plan and want to take advantage of this tax-deferred savings opportunity, you can enroll by submitting the Participant Enrollment Form pdf icon 95kb and Beneficiary Designation Form pdf icon 240kb to ING, the plan record keeper, by November 1, 2010.

You also can enroll by calling the toll free Plan Information Line at 1-VRS-DCPLAN1 (1-877-327-5261). Select Option 1 from the main menu, press 0 and follow the prompts.

The employer cash match is not paid on the bonus. It is paid on the regular contributions made each payday.

Featured FAQ: What is the Virginia Retirement System (VRS)?

The Virginia Retirement System (VRS) is an independent state agency that administers retirement and other benefits for members of VRS, the State Police Officers' Retirement System (SPORS), the Virginia Law Officers' Retirement System (VaLORS) and the Judicial Retirement System (JRS). Membership in VRS is automatic with employment in a covered position. Members include full-time permanent, salaried state employees, public college and university faculty members, instructional and management employees of local public school divisions and employees of VRS-participating political subdivisions. Some part-time permanent, salaried state employees also are covered under VRS.

For more information about your benefits, see the VRS Retirement Plan 1 or the VRS Retirement Plan 2.

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