In This Edition
In This Edition
- Are you in Plan 1? Do you have less than five years of service?
- Your Member Benefit Profile is ready
- Five retirement application mistakes that could hold up your first benefit payment
- National Save for Retirement Week is October 21-27
- New legislation adds workers' compensation leave to types of prior service eligible for purchase
- Employment alternative to disability retirement available to political subdivision employers
- VRS to update its systems October 25 through November 5
- Featured FAQ: I'm in Plan 1 and not vested. However, I'm currently in a payroll contract to purchase prior service. Does this mean I will be vested by January 1, 2013?
Are you in Plan 1? Do you have less than five years of service?
If you answered "yes" to both questions, your retirement plan and other provisions will change if you are not vested by January 1, 2013. It may take longer to qualify for retirement, and your benefit may be less than it would be under your current provisions. You need five years (60 months) of service credit to become vested. You are in Plan 1 if your membership date is before July 1, 2010.
Prior service credit counts toward vesting
If you have prior service eligible for purchase, now is the time to think about whether or not to purchase this service to become vested by January 1, 2013.
There's a tool available if you are thinking about purchasing service
VRS has prepared a Benefit Comparison that shows your projected retirement information based on your current plan provisions and the impact on your retirement if you are not vested by January 1. It also shows the number of months you would need to become vested by January 1 and an estimated cost to purchase this amount of prior service. Your Benefit Comparison is available through myVRS. Log in or create a secure online account.
If you decide to purchase prior service, VRS strongly recommends you apply no later than November 1. Depending on the payment method you wish to use, you may need to apply even earlier. VRS must receive payment for your purchase by no later than December 31, 2012. Go to varetire.org/actnow to access Benefit Changes, a special publication providing an overview of the plan changes coming January 1, information about purchasing prior service, and FAQs and links to other resources.
Your Member Benefit Profile is ready
Your employer will be notifying you soon that your 2012 Member Benefit Profile (MBP), which is your online benefits statement, is available in myVRS. Your MBP helps you map your retirement strategy by providing information about your retirement and other benefits as of June 30, 2012.
Are you eligible to participate in the Commonwealth of Virginia 457 Deferred Compensation Plan?
If so, your MBP will include a retirement income gap analysis that will show a total retirement income estimate compared to a retirement income target of 80 percent of your compensation. Your retirement income estimate includes your estimated unreduced VRS benefit, a Social Security estimate and an estimated deferred compensation plan annuity, if applicable. To maintain a reasonable standard of living when you retire, experts say you will need at least 80 percent of your current earnings during retirement. Your analysis includes tips for "closing the gap" between your projected retirement income and your 80 percent benchmark.
Are you in Plan 1 and not vested?
Your 2012 MBP will show information from your member record except projected retirement information. To see your current retirement estimates and the impact on your retirement if you are not vested by January 1, 2013, look up your Benefit Comparison in myVRS. For more information, see Are you in Plan 1? or go to varetire.org/actnow.
Are you in Plan 2?
If you are in Plan 2, you can find your latest benefit information through myVRS.
Log in or create a secure online myVRS account now to look up your MBP or other benefit information.
Five retirement application mistakes that could hold up your first benefit payment
When you retire, you'll want to get your first retirement benefit payment on time. A complete, correct Application for Service Retirement (VRS-5) means your first benefit payment will be deposited on the first of the month after the month you retire. An incomplete or incorrect application means VRS will have to get back to you before completing your retirement. This delay, or an application submitted too close to your retirement date, could hold up your first payment. Don't let this happen to you!
National Save for Retirement Week is October 21-27
Retirement: Down the road or around the corner? Either way, National Save for Retirement Week, October 21-27, is a good time to evaluate your retirement savings planning and build up your retirement savings. Taking advantage of employer-sponsored retirement plans—such as the Commonwealth of Virginia 457 Deferred Compensation Plan, the 403(b) plan or another tax-deferred savings plan—help make saving automatic. You may be surprised by the amount of additional retirement savings you'll have when you're ready to think about retiring, even if you start saving later in your career.
New legislation adds workers' compensation leave to types of prior service eligible for purchase
If you go on short-term disability under the Virginia Sickness and Disability Program (VSDP) or on leave without pay receiving only workers' compensation, and retirement contributions are not withheld from your workers' compensation payment, you may be eligible to purchase service credit for the time you are on short-term disability or up to 24 months of your leave period. Contact your human resource office for more information. Learn more about purchasing prior service under Plan 1 or Plan 2.
Employment alternative to disability retirement available to political subdivision employers
Political subdivisions that provide enhanced coverage for hazardous duty employees can offer non-hazardous duty employment to full-time salaried law enforcement officers, firefighters, emergency medical technicians, jail superintendents and jail officers who have at least five years with a political subdivision, in a position covered by enhanced benefits and who become disabled and can no longer perform the duties of their hazardous duty positions.
Effective July 1, 2012, these employees, if approved to retire on disability as recommended by the VRS Medical Board, could be eligible to work in the alternate position instead of taking disability retirement and, if so, could retain their enhanced hazardous duty coverage for service retirement. The offer of alternate employment is at the sole discretion of the employer and can be revoked at any time. Contact your human resource office if you would like more information about this provision.
VRS to update its systems October 25 through November 5
VRS is making upgrades to its systems to better serve you in the future.
What will this mean to you?
myVRS will not be available during this period.
There will be no benefit estimates available during this period, including estimates through the myVRS Benefit Estimator. However, you may use the Member Calculator to approximate your retirement benefits from information you enter.
Please submit fall retirement and purchase of prior service applications now to avoid delay during the upgrade.
If you need assistance, you will be able to call VRS toll free at 1-888-VARETIR (1-888-827-3847). However, response times may be delayed. Also, you will not be able to use the automated Interactive Voice Response (IVR) system (option 2 from VRS' toll-free telephone number) during the systems upgrade.
Q: I'm in Plan 1 and not vested. However, I'm currently in a payroll contract to purchase prior service. Does this mean I will be vested by January 1, 2013?
A: If the months of prior service you purchase by December 31, 2012 bring you to at least 60 months of service credit, you will be vested on January 1, 2013 and remain under the retirement provisions for vested Plan 1 members. If the months purchased by December 31 are not enough to bring you to 60 months, you will not be vested on January 1, even if your contract continues after January 1. Therefore, you will come under the retirement provisions for non-vested Plan 1 members that go into effect on January 1. Read more.
You can break your contract and purchase the remaining service in a lump sum if you are in an after-tax contract. If you are in a pre-tax contract, you cannot break this contract and purchase the remaining service. However, if you have additional eligible prior service you have not contracted to purchase and it would bring you to the 60 months needed for vesting, you can purchase this service now using a lump sum.