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Partial Lump-Sum Option Payment (PLOP)
If you work at least one year beyond the date you are eligible for an unreduced retirement benefit, you may elect to receive a one-time Partial Lump-Sum Option Payment (PLOP). This option reduces your monthly benefit in order to provide you a lump sum payment at your retirement. You can elect this option with the Basic Benefit or Survivor Option.
You may elect up to three times the amount of your annual benefit. The amount depends on how long you work beyond your eligibility for an unreduced retirement as shown in the following table:
| Earned Service Beyond Unreduced Retirement Eligibility Date | PLOP Payment Amount | Example PLOP Payment Amount (Annual Benefit Amount = $32,000) |
|---|---|---|
12 months |
1 x annual Basic Benefit Amount |
$32,000 |
24 months |
1 or 2 x annual Basic Benefit Amount |
$32,000 or $64,000 |
36 months or more |
1, 2, or 3 x annual Basic Benefit Amount |
$32,000, $64,000 or $96,000 |
Taxes and Rollovers
The PLOP is subject to federal income tax of 20 percent and, if you live in Virginia, state income tax of 4 percent. You are not taxed on any portion of the PLOP on which you already paid taxes. You may defer taxes by rolling over the taxable amount of the PLOP to the Virginia Cash Match Plan, an Individual Retirement Account (IRA) or other qualified tax-deferred savings plan. For additional information, read the IRS 402(f) Special Tax Notice 
58kb, contact your tax advisor or contact the Internal Revenue Service at www.irs.gov.
Qualifying for the PLOP
You must be actively employed during the period beyond your unreduced retirement eligibility date to qualify for the PLOP. Purchased service credit or granted service credit may not be used to qualify for the PLOP.
Your eligibility for the PLOP is based on the date you first become eligible for an unreduced retirement benefit. Examples:
Example One
When you joined VRS, you were eligible for unreduced retirement at age 55 with 30 years of service credit (55/30). On July 1, 2008, when you were age 51 with 30 years of service credit, you changed to a position providing unreduced retirement at age 50 with 30 years of service credit (50/30). You want to retire on July 1, 2009 when you will be age 52 and have 31 years of service credit. Are you eligible for a PLOP?
Yes. You first became eligible for an unreduced retirement on July 1, 2008, when you moved from the 55/30 plan to the 50/30 plan. Therefore, you will qualify for a one-year PLOP on July 1, 2009.
Example Two
Effective July 1, 2008, state law changed to provide all VRS-covered deputy sheriffs with enhanced coverage for hazardous duty. This coverage provides for unreduced retirement at age 50 with 25 years of service credit (50/25). You are a deputy sheriff who, before the law changed, was eligible for unreduced retirement at age 50 with 30 years of service credit (50/30). You are now age 51 with 26 years of service credit and want to retire with a PLOP. Are you eligible?
Not yet. When you changed to the 50/25 plan, you became eligible for an unreduced retirement benefit on July 1, 2008. You have to work at least one year beyond your unreduced retirement eligibility date to qualify for a PLOP.
Let myVRS Estimate Your Benefit
You can create estimates using different benefit payout options through your personal myVRS member online account. Go to myVRS Log-in Page.
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