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General

When will I receive my first benefit payment?
Can I change my retirement option once I retire?
What happens to my life insurance when I retire?
Can I change the beneficiary for my VRS life insurance?
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 receive my first benefit payment?

If VRS receives your retirement application 90 days in advance of your retirement date, you will receive your first benefit payment 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 benefit payment on August 1.

2. Can I change my retirement payout option once I retire?

You may not change your retirement payout 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.

3. What happens to my life insurance when I retire?

If you are covered under the VRS Group Life Insurance Program your Basic Group Life Insurance continues at no cost to you after retirement, provided you are at least 55 years of age and have at least five years of service or are 50 years of age with at least 10 years of service. The amount of your life insurance is based on your current annual compensation unless your retirement date is on or after July 1, 1999 and you have 25 years or more of service. In this case, your life insurance is based on the higher of your current annual compensation, or the annual compensation you earned in the 24 months prior to your retirement date. Your life insurance begins to reduce January 1 of the first full year after retirement at a rate of 25 percent per year until it is valued at 25 percent of its original value.

4. Can I change the beneficiary for my VRS life insurance?

Yes. Just fill out the Beneficiary Designation Form VRS-2 60kb and send it to VRS for processing.

5. 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. Once you stop working and retire again, VRS will recalculate your benefit to include the additional service and compensation, if higher than your previous compensation. Your benefit is based on the option you chose when you first retired and on the provisions of the plan under which you worked during this second period of VRS covered employment. The sole exception to the stipulations above applies to retired teachers who are rehired because of a teacher shortage. They 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.

Your group life insurance is also based on your compensation during this second period of covered employment unless your retirement date is on or after July 1, 1999 and you have 20 years or more of service. In this case your life insurance is based on the higher of the coverage amount you would have received had you remained retired or the coverage amount you are eligible for based on your second period of employment.

6. 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.

7. Can I receive my retirement through direct deposit?

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

8. 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.

9. 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 a 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. If your basic group life insurance is more than $50,000, you will also receive a W-2 form showing the income tax and FICA withheld on the value of that insurance coverage.