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State Employees, Teachers and General Political Subdivision Employees (VRS) (Plan 1)

This page applies to you if:

  • you are a state employee, school division employee or a general employee of a participating political subdivision;
  • you were hired or rehired before July 1, 2010; and
  • you were vested as of January 1, 2013.

If this doesn't describe you, select your retirement plan here.

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Your Retirement

Welcome to the Virginia Retirement System (VRS). As a member of VRS, you have a tremendous opportunity to lay the foundation for your future retirement needs. You also have other benefits that protect you and your loved ones while you are working and after you retire.

About Your Plan

Your plan is a defined benefit plan. Under this plan, your retirement benefit is based on your age, service credit and average final compensation at retirement using a formula. For most members in the defined benefit plan, the unreduced benefit replaces approximately 51 percent of the member's average highest salary.

Plan Provisions

You are in Plan 1 if your membership date is before July 1, 2010 and you were vested as of January 1, 2013.

Retirement Contributions

You contribute 5 percent of your compensation each month to your member contribution account through a pre-tax salary reduction. However, some school divisions and political subdivisions have elected to phase in the required 5-percent member contribution so all employees will be paying 5 percent by July 1, 2016. Your contributions are tax-deferred until you withdraw them as part of your retirement benefit or as a refund.

Your employer makes a separate contribution to VRS for all covered employees. VRS invests contributions to provide for your future benefit payment.

Vesting

You become vested when you have at least five years (60 months) of service credit. Vesting means you are eligible to qualify for retirement if you meet the age and service requirements for your plan. You also must be vested to receive a full refund of your member contribution account balance if you leave employment and request a refund. Read more about leaving employment.

Average Final Compensation

Your average final compensation is the average of your 36 consecutive months of highest compensation as a covered employee.

Service Retirement Multiplier

A retirement multiplier is a factor that determines how much of your average final compensation will be used to calculate your retirement benefit. Your retirement multiplier is 1.7 percent.

Disability Retirement

If you are eligible to be considered for disability retirement and retire on disability, the retirement multiplier will be 1.7 percent on all service credit, regardless of when it was earned, purchased or granted.

You may be covered under the Virginia Sickness and Disability Program (VSDP). Learn more about VSDP.

Service Credit

Service credit is a retirement asset. It has monetary value when it is used to calculate your retirement benefit or if you take a refund of your member contributions and interest.

You earn service credit for each month you are reported in a covered position. Service credit can include credit for prior service you may purchase or additional service granted by your employer.

Normal Retirement Age

Age 65

Earliest Unreduced Retirement Eligibility

You become eligible for an unreduced retirement benefit at age 65 with at least five years (60 months) of service credit or at age 50 with at least 30 years of service credit.

Earliest Reduced Retirement Eligibility

You can retire with a reduced benefit as early as age 55 with at least five years (60 months) of service credit or age 50 with at least 10 years of service credit.

How Your Benefit is Calculated

Your unreduced Basic Benefit is calculated using the following formula:

Average final compensation × retirement multiplier × total years of service credit at retirement = Annual benefit amount

Annual benefit amount ÷ 12 = Monthly benefit amount before taxes and other deductions

An early retirement reduction factor is applied to your monthly benefit amount if you retire with reduced retirement benefit (see below) or a benefit payout option other than the Basic Benefit. Read more about benefit payout options.

Calculation Example

In this example, the member is retiring at age 50 with 30 years of service credit. The member's average final compensation is $51,400.00.

Average final compensation $51,400.00
Retirement multiplier × .017
Service credit × 30
Annual benefit amount $26,214.00
÷ 12 months ÷ 12
Monthly benefit amount before taxes and other deductions $2,184.50

Cost-of-Living Adjustment (COLA) in Retirement

Matches first 3 percent increase in the Consumer Price Index for all Urban Consumers (CPI-U) and half of any additional 4 percent increase up to a maximum COLA of 5 percent.

Eligibility

For members who retire with an unreduced benefit or with a reduced benefit with at least 20 years of service credit, the COLA will go into effect on July 1 after one full calendar year from their retirement date.

For members who retire with a reduced benefit with less than 20 years of service credit, the COLA will go into effect on July 1 after one calendar year following their unreduced retirement eligibility date.

Exceptions to COLA Effective Dates

The COLA is effective July 1 following one full calendar year (January 1 to December 31) for members in any of the following circumstances:

  • The member is within five years of qualifying for an unreduced retirement benefit as of January 1, 2013.
  • The member retires on disability.
  • The member retires directly from short-term or long-term disability under the Virginia Sickness and Disability Program (VSDP).
  • The member is involuntarily separated from employment for causes other than job performance or misconduct and is eligible to retire under the Workforce Transition Act or the Transitional Benefits Program.
  • The member dies in service and his or her survivor or beneficiary is eligible for a monthly death-in-service benefit. The COLA will go into effect on July 1 following one full calendar year (January 1 to December 31) from the date the monthly benefit begins.

Learn more about the COLA.

 

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