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VRS Logo Monday, October 19, 2020

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1111 East Main Street
Richmond, VA 23219
8:30 a.m.–4:00 p.m.
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Administrative Offices
1200 East Main Street
Richmond, VA 23219

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After You Retire on Disability

Receiving Your Benefit and the COLA

Your disability retirement benefit will be deposited to the financial institution account you designate on the Authorization for Direct Deposit of Monthly Benefit (VRS-57). You will begin receiving cost-of-living adjustments (COLAs) effective July 1 of the second calendar year after you retire and each July 1 thereafter. The COLA will be reflected in your August 1 benefit payment. If you elect the Survivor Option, the COLA will be based on your reduced benefit amount. During years of no inflation or deflation, the COLA will be 0%.


Your benefit will be subject to federal income taxes and, if you live in Virginia, state income taxes, unless you retire on work-related disability with the guaranteed benefit. If taxes are being withheld from your benefit, you will receive a 1099-R form from VRS each January for the previous calendar year's benefit payments and tax withholdings. You will file this form with your federal and state income tax returns.

Group Life Insurance Coverage

If you have VRS group life insurance coverage, some basic benefits will continue after you retire on disability. See Basic Group Life Insurance. Your coverage will begin to reduce by 25% beginning on the January 1 following one calendar year from your normal retirement age under your plan. It will continue to reduce by 25% each January 1 until it reaches 25% of its original value. Example: If your normal retirement age is 65 and you turn age 65 on May 2, 2013, your first 25% reduction will occur on January 1, 2015.

If you have optional group life insurance coverage, you may continue a portion of your coverage into retirement if you were continuously covered during the 60 months preceding your retirement date. See Optional Group Life Insurance. If you were not covered during this period, your coverage will continue until the end of the month in which you reach your normal retirement age. In either case, you have the option to convert your coverage to an individual policy. For more information, contact Securian Financial, the insurer for the VRS Group Life Insurance Program, toll-free at 1-800-441-2258.

Health Insurance Credit

The health insurance credit is a tax-free benefit that assists with health insurance premiums you pay for single coverage, excluding any portion of the premiums covering a spouse or dependents. The credit cannot exceed the amount of your monthly premiums.

  • If you retire on disability as a state employee, the maximum health insurance credit is $120 per month or $4 per year of total service credit per month, whichever is higher.

  • If you retire on disability as a teacher or administrative school employee, the maximum health insurance credit is either (a) $4 multiplied by twice the amount of your service credit per month or (b) $4 multiplied by the amount of service you would have earned had you remained an active employee until age 60 per month, whichever is less.

  • If you retire on disability as a political subdivision employee and your employer participates in the health insurance credit program, you are eligible for a maximum credit of $45 per month.

Disability Reexamination

After you retire on disability, you will be required to provide updated medical information until your normal retirement age under Plan 1 or Plan 2. You also may be required to have annual follow-up examinations until you reach your normal retirement age. If you refuse to provide updated information or be examined, your benefits will stop until you comply. If you refuse to comply for six months following a request for reexamination or if VRS determines you are no longer disabled, your benefits will end.

Working After Disability Retirement

In some cases, you can continue to receive your disability retirement benefits if you work in a non-covered position with a VRS-participating employer. If you work for any employer in a position that requires the same or similar duties as those you performed before retiring on disability, your disability retirement benefits will end.

If you return to covered employment, your benefits will stop and you will become an active member. When you retire again, you will be required to retire under service (regular) retirement. The period of time you were retired on disability will be included in the calculation of your service retirement benefit. If you wish to retire on disability, you must reapply by submitting all required disability retirement forms and documents. Your application will be evaluated under the medical review process based on the duties of your new position.

If you are considering employment after you retire on disability, call VRS toll-free at 1-888-827-3847 to determine whether the position would disqualify you from continuing to receive your disability retirement benefits. Read more about working after retirement.

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