Having trouble viewing? 
View this email in your browser.
    
A Publication for VRS Employers
November 2017 | Archives
Your Turn to Ask: Do I have to follow the return-to-work rules if I bring back a retiree using a temp agency?

VRS Board Certifies State and Teacher Employer Contribution Rates for Legislative Action

At its October meeting, the VRS Board of Trustees voted to certify to the governor and the General Assembly the contribution rates for state employees, teachers, the State Police Officers' Retirement System (SPORS), the Virginia Law Officers' Retirement System (VaLORS) and the Judicial Retirement System (JRS) for fiscal years 2019 and 2020. The board also voted to certify contribution rates for Other Post Employment Benefits (OPEBs). The board will review contribution rates for political subdivisions at its November meeting.

In December, the governor will present his fiscal year 2019-2020 budget, including a recommendation regarding the funding of the VRS-certified contribution rates. Final contribution rates for these plans will be available at the conclusion of the 2018 General Assembly session.

The VRS board-certified rates, which have stabilized and, in some cases, slightly declined, reflect favorable investment returns and the efforts of the General Assembly and the governor to:

  • Accelerate funding of the board-certified rates ahead of the statutory schedule.

  • Advance additional funds to pay down the deferred contributions from the 2010-2012 biennium for the state plans.

  • Reduce the remaining balance of the deferred contributions for the teacher plan.

Increasing the funding level two years earlier than scheduled for the state plans, and one year earlier for the teacher plan, is estimated to reduce future contributions by $232 million over the next 20 years. Accelerated repayment of deferred contributions for the state plans will eliminate approximately $26.5 million in interest costs and also save employers approximately $34 million in plan costs for the teacher plan. The statutory schedule requires funding of the total actuarially determined rates beginning in fiscal year 2019.

Current and proposed employer contribution rates and other post employment benefits (OPEB) contribution rates are available on the VRS Financial Reporting page.
 

view current contribution rates
 

How We Measure Up: VRS Releases Benchmark Results

Once a year, Cost Effectiveness Management (CEM), a benchmarking company, conducts a study comparing retirement systems in the U.S. and around the world, focusing on service and cost to their customers. How does VRS compare?

VRS delivers quality service: According to CEM, VRS delivers better customer service at a lower cost, compared to a group of 67 leading retirement systems in the U.S., Canada and other countries, and to a peer group of 12 state retirement systems in the U.S.

In the latest study for fiscal year 2016, VRS received a service score of 82 out of 100, which compares to a score of 80 for the peer group. The service score takes into account phone call results, web and newsletter effectiveness and member participation in counseling and presentations. VRS has outperformed its peer group in every benchmarking comparison since 2008.

VRS’ administrative costs are low: VRS’ total benefit administrative cost was $69 per active member and retiree. The cost was $25 below the peer average of $94 and $58 below the all-participant average of $127.


CEM attributed VRS’ low administrative cost to lower transaction volumes per member, higher productivity and lower costs in office support, technology and project expenses as compared to other retirement systems.

VRS participates in the benchmarking comparison each year to identify opportunities to further improve service and reduce costs for members and retirees.


 


Changes Ahead for myVRS: Get the Scoop


Higher Ed, Political Appointees to Elect Their Plans in myVRS

Beginning in December, newly eligible members of the VRS Optional Retirement Plan for Higher Education (ORPHE) and members of the Optional Retirement Plan for Political Appointees (ORPPA) can use their myVRS accounts to elect their retirement plan and provider.

How it works: Direct new hires to register for their online myVRS accounts. Once logged in, new hires with a choice of plans will see a message indicating how much time they have remaining to select a retirement plan. The Compare Plans page in myVRS helps members evaluate key features of a VRS plan versus an optional retirement plan. The comparison is based on several factors such as contributions, vesting and their options after leaving their ORPHE- or ORPPA-eligible position. A plan comparison calculator allows members to view retirement income projections under each plan.

After evaluating their options, members can select their retirement plan from within their myVRS accounts. Higher education members who select an ORPHE plan also will choose one of three investment providers: DCP (VRS investment options record-kept by ICMA-RC), Fidelity or TIAA.

Employer’s role in the plan-election process: Employers are required to review payroll and other applicable records to ensure employee contributions are correctly deducted and submitted in a timely fashion. When ORPHE- or ORPPA-eligible employees elect their plans in myVRS, employers will acknowledge the elections have been reviewed, are correct in myVRS Navigator and the appropriate deductions have been set up in payroll. VRS will send ORP plan codes to the Department of Accounts (DOA) twice a month for centralized state agencies using CIPPS.

Attend a modernization webinar: To help pave the way for a smooth transition in the plan-election process, VRS will present webinars for ORPHE and ORPPA employers. The webinars will cover the changes in the plan election and provider selection process as well as what actions employers need to take in myVRS Navigator. Register today for one of these sessions:



Members Gaining Access to Personalized Financial Wellness Content

Personal finance just got personal! Next month, VRS members who log into their myVRS accounts will have access to personalized and expanded content from the myVRS Financial Wellness program, powered by Enrich. Calculators, educational games, budgeting tools and a library of mini-courses will help members evaluate their current financial knowledge and improve the money skills most important to them. Members also will receive content recommendations, based on their retirement plan and age.

VRS is providing these resources to help members grow their knowledge and confidence in making day-to-day financial decisions, which will, in turn, aid them in preparing for retirement.

 

Offer a 403(b)? Inform VRS of Employee Election Changes by December 10

School divisions that elected to provide the employer‐sponsored hybrid 403(b) option have a December 10 deadline to enter the employees’ elections in myVRS Navigator.

In myVRS Navigator you must indicate which members have elected to participate in the employer-sponsored 403(b) and which members have elected to no longer participate. This action can only be performed from November 1 to December 10 each year.

No action is required for employees who wish to use the Hybrid 457 Deferred Compensation Plan or have previously made an election to use the 403(b) option for voluntary contributions and wish to continue to do so.

View the process guide: For additional information, refer to the myVRS Navigator: Maintaining Employer-Sponsored Hybrid 403(b) Option Information Process Guide in the Commonwealth of Virginia Learning Center (VLC). You must log-in to access the process guide. Alternately, you can do a keyword search for “403(b)” once you’ve logged into VLC.

 

New SmartStep Simplifies Savings for Hybrid Retirement Plan Members

VRS and ICMA-RC have introduced a new SmartStep feature to make savings easier for Hybrid Retirement Plan members. SmartStep helps members save more for retirement with automatic, annual increases to their voluntary contributions.

How does it work? The member chooses an annual increase amount, from 0.5 percent to 3.5 percent, and which month the increase will occur: January, April, July or October. The member’s voluntary contribution will increase each year until it reaches the maximum of 4 percent.

How does a member start SmartStep? Members should log into Account Access at www.varetire.org/hybrid and select their Hybrid 457 plan account. From the Contributions page, the member will enter an amount for SmartStep. Members also can use the Hybrid Member Paycheck Calculator on the hybrid website to see the impact of contributions and other deductions on their paychecks.

 

  Announcements

Annual MBPs Provide a Checkup on Retirement Planning: Member Benefit Profiles for 2017 are now available to Plan 1 and Plan 2 members in their myVRS accounts. The MBP is a member’s annual benefit statement, which is based on information reported by an employer to VRS as of June 30. It provides information on the member’s account balance, retirement eligibility and eligibility for other benefits, such as group life insurance and the health insurance credit.

Employer Manual Updated: VRS has made a change to its Employer Manual. The Service Retirement chapter now includes information on post-retirement benefits as well. Stay tuned for updates to other chapters.

Keep Your EZ Link Account Up to Date: To ensure you get important communications from ICMA-RC, keep your EZLink account information up to date, especially email addresses. Be sure to log in periodically. Your account will be deactivated after 12 months of inactivity.

Enhanced EZ Link Dashboard: You may have noticed some changes to your employer dashboard in EZLink. In addition to the default main dashboard, six function-specific dashboards have been added to help streamline the features a plan administrator accesses regularly, such as contributions, enrollments and investments.

Encourage Voluntary Contributions: Hybrid plan members may increase their voluntary contribution elections (up to 4 percent of their creditable compensation each month) on a quarterly basis. The next quarterly deadline is December 15 at 4 p.m. Hybrid members can use a paycheck calculator to see the impact of contributions and other deductions on their take-home pay and choose a percentage that works for them.

New to administering VRS benefits? Regardless of your title, if you help administer any of the VRS benefits provided to employees and are new to your position, we want to hear from you. Take a few minutes to introduce yourself to VRS. Our team can give you the tools and expertise you need as you get up to speed on all things VRS.

Order VRS Publications.

 

  Employer Training & Events

Classroom and webinar courses are posted on the VRS website as they are scheduled. Other e-learning modules are available through VRS University in the Virginia Learning Center.

Current Training

 

  Member Education & Events

Classroom and webinar courses are posted on the VRS website as they are scheduled. Plan 1 and Plan 2 members may register from our Education and Counseling pages for new offerings.

Several hybrid plan educational resources are available. Hybrid plan members can register for a group seminar or a one-on-one consultation to learn more about the hybrid plan defined benefit and defined contribution components as well as other VRS benefits. Hybrid plan seminars are available in various regions across Virginia.

For members who have recently retired or those close to retirement, VRS offers its Living in Retirement workshops at various locations throughout the state.

 

  Form Updates

To ensure faster processing of retirement and other forms — and to ensure you are using the most up-to-date versions of VRS forms — use the latest fillable VRS forms on the website.

VRS now also accepts copies and faxes of all forms. All forms may be faxed to 804-786-9718. If you are on a deadline when faxing a document, please call or email to alert VRS of its pending arrival. Also, it is good practice to use a cover sheet, particularly if you are sending the fax to a specific VRS staff member.

Important note: VRS does not accept forms via email, which is not considered a secure form of communication.

 

Financial Reporting

Be sure to bookmark the employers’ Financial Reporting section, where you can find resources and links to assist with financial reporting related to VRS-administered benefit plans. In addition, you will now find a new section with fiscal year-end reporting reminders.

 

  Your Turn to Ask

Q: Do I have to follow the return-to-work rules if I bring back a retiree using a temp agency?

The simple answer to the question is yes—you must follow return-to-work rules, especially if the retiree is returning to identical or similar work that was done before retirement, or if the retiree will be working full time. The services of a temp agency cannot be used to circumvent the Code of Virginia or the rules established by the Internal Revenue Service.

At a minimum, VRS would require the retiree to have a bona fide break in service before returning to work with his or her former employer, and there must be no prearrangement between the retiree and employer, even if the retiree was returning to his or her former employer through a temp agency.

For more information on return-to-work rules, refer to the Service Retirement chapter of the Employer Manual PDF Icon.

 

Have a question?

Email the Employer Support Team or contact your Employer Representative.

Important Email Notice: Do not send personal or confidential information, such as a Social Security number, by email. VRS will send only non-confidential replies.

Copyright © 2017 Virginia Retirement System

get adobe reader


unsubscribe from this list    update subscription preferences