Not subscribed to Member News? Sign up now.
Having trouble viewing? 
View this email in your browser.
    
A Publication for VRS Members
February 2019 | Archives

ideaHave an idea for a future article?

Stay Informed About Your Pension Plan: Review VRS' 2018 Annual Financial Reports

Take a minute (59 seconds, actually) to get some key facts about VRS from 2018.

VRS 2018 in 60 seconds

In fiscal year 2018, VRS served more than 700,000 active and retired members and beneficiaries, paid $4.8 billion in retirement benefits and became the 19th largest public or private pension system in the U.S. Read more about VRS' latest fiscal year results in the Popular Annual Financial Report (PAFR) PDF Icon.

For more in-depth information about VRS investments, finances and member statistics, refer to the 2018 Comprehensive Annual Financial Report (CAFR) PDF Icon.

 

Starting a New Job? Make the Most of Your Money

Are you starting the new year with a new job? Welcome to VRS!

Although your priority right now may be learning your new responsibilities, making a commitment to build your retirement savings should be next.

If you are a Hybrid Retirement Plan member, start by saving as much as possible through the defined contribution component of your plan. You contribute a mandatory 1 percent of your creditable compensation each month to your Hybrid 401(a) plan account and your employer contributes 1 percent. You can save more by making additional voluntary contributions, up to 4 percent of your creditable compensation to your Hybrid 457 plan. And, your employer will match up to 2.5 percent of your contribution, increasing your savings. Don’t miss out on the match!

Want help on setting financial goals early in your career or need tips on reducing debt and building retirement income mid-career? VRS has a number of courses to help you save wherever you are in life. Check out courses like Starting Point: For Early Career Investors and Looking Ahead: Prioritizing Saving for Retirement.

Participate in Other Savings Plans

School Division and Political Subdivision Employees
If you are a school division or political subdivision employee, check with your employer to see what supplemental plan may be offered, such as a 457 or 403(b) plan.

State Employees
All state employees, including higher education employees, can add to their retirement savings by participating in the Commonwealth of Virginia 457 Deferred Compensation Plan. And if you contribute at least $10 per pay period to the Commonwealth’s 457 Plan, you are eligible for an employer match through the Virginia Cash Match Plan, equal to 50 percent of your contributions, not to exceed $20 per pay period. Hybrid Retirement Plan members must contribute the maximum 4 percent voluntary contribution to the hybrid plan before qualifying for the cash match in the Commonwealth’s 457 plan.

Learn how the 457 Deferred Compensation and Cash-Match Plans work, the details of investing and what happens when you leave your job or retire, through workshops, webinars and individual counseling.

Plans From Other Employers
Perhaps you have a 401(k) or other supplemental savings account with your previous employer. You can roll over money from other plans to your Hybrid 457 Deferred Compensation Plan, Commonwealth of Virginia 457 Deferred Compensation Plan or Virginia 401(a) Cash Match Plan account, if you participate. A rollover is a transfer of a pre-tax, lump-sum contribution to another qualified plan. A rollover allows you to move the money to another qualified plan and continue to defer income taxes until you withdraw the money from your plan. To learn more about deferred compensation options available for after-tax or Roth rollovers, please visit your plan’s website at www.varetire.org/dcp.

There are advantages to rolling over other plans into your hybrid 457 or cash-match plan:

  • Low administrative fees and investment products that are competitively priced compared to other similar investment options.
  • The plans offer a variety of investment options.
  • You have easy access to your account 24 hours a day, seven days a week and specialists are available to answer questions at no cost.

You can roll over any of the following plans:

  • 401(a) plan other than the Hybrid 401(a) Cash Match Plan (you cannot roll over money from other plans to your hybrid 401(a) plan).
  • 401(k).
  • 457(b) and 403(b) plans.
  • Federal Thrift Savings Plan.
  • Traditional Individual Retirement Account (IRA).

Whether you are beginning your career, at the midpoint or closing in on retirement, it’s smart to take advantage of every opportunity to save for the future.

 
America Saves Week

America Saves Week: Make 2019 Your Year to Save

America Saves Week is a good time to think about saving and how to make the most of your money. The best way to do that? Check out the myVRS Financial Wellness program, aimed at helping boost your financial health.

Monday: February 25
myVRS Financial Wellness is free, self-paced and easy-to-use. Get started with your Financial Health Assessment. It takes only 30 minutes!

Tuesday: February 26
Find out why you make money decisions the way you do and better understand your spending habits through the Your Money Personality assessment in myVRS Financial Wellness.

Wednesday: February 27
Are you ready to commit to improving your financial health? Using Credit Cards Responsibly is a helpful mini-course available to you in myVRS Financial Wellness.

Thursday: February 28
If you live paycheck to paycheck, you’re not alone. According to Bankrate.com, 27 percent of Americans have no savings. Need motivation to start a rainy day savings account? Read this myVRS Financial Wellness article about how a six-month cushion saved one woman and her family from financial ruin.

Friday: March 1
Wish you were debt-free? One habit of the debt-free is a willingness to learn. Demonstrate that habit and learn about other helpful habits to develop by reading this article about the habits of people who are debt free.

 

IRS Increases 2019 Deferred Compensation Limits

There’s good news if you contribute to the Commonwealth of Virginia 457 Deferred Compensation Plan or other tax-deferred savings plan. The Internal Revenue Service (IRS) has increased the amount participants may contribute annually.
 

 457 Deferred Compensation Plan Contribution Limits 2019
Annual deferral limit for participants younger than 50 $19,000
Pre-retirement Standard Catch-Up
(not to exceed participant’s catch-up credit)
$19,000
($38,000 total)
Age 50+ Catch-Up Limit $6,000
($25,000 total)
 

The annual limit includes any voluntary contributions that Hybrid Retirement Plan members make to the Hybrid 457 plan and other tax-deferred supplemental plans. Roth after-tax contributions made to the Commonwealth‘s 457 plan also count toward the limit.

Want to see how increasing your contributions will affect your paycheck? Try the 457 paycheck calculator, which compares your current paycheck amount to the amount of your paycheck with increased contributions. To increase your Commonwealth of Virginia 457 Plan contributions, log into your online account or call 1-VRS-DCPLAN1 (1-877-327-5261).

 
Thinking About Retiring This Year? Do This Now

Thinking About Retiring This Year? Do This Now

So this is the year. You’ve decided to retire in 2019. Before you send in your Application for Service Retirement (VRS-5) PDF Icon, take some time to carefully confirm your readiness.

Log into your myVRS account to verify your retirement eligibility date.
From your account homepage, view the first date you can retire with either a reduced or an unreduced benefit. Do the dates match what you had planned? Your myVRS account also provides your member contribution account and your deferred compensation account balances, as well as information on your other VRS benefits.

Next, take advantage of the myVRS tools that allow you to enter different benefit options and financial scenarios based on your goals in retirement.

  • The myVRS Benefit Estimator creates estimates of your VRS retirement benefit based on different benefit payout options or retirement dates. Remember to create a new estimate if your circumstances change.
  • The myVRS Retirement Planner allows you to set retirement income goals and estimate your expenses and income upon retirement. The planner integrates the estimate you create in the Benefit Estimator and allows you to enter estimated income and project expenses, such as healthcare, in retirement.
  • Explore the cost benefits of purchasing any eligible prior service. Under the Manage My Benefits tab, select the Purchase Prior Service option. If you have service eligible for purchase post-1989, it will appear. Or, you may have eligible service that is older or not yet certified that you would like to report and possibly purchase. Service eligible for purchase includes service from previous public employment, active duty military service, an eligible period of leave or VRS refunded service as service credit. Buying service may increase the amount of your retirement benefit. It also counts toward your eligibility for the health insurance credit, if your employer provides this benefit.

Not sure how purchasing prior service will impact your benefit or if the investment will pay off? There are webinars on purchase of prior service available for both Plan 1 and Plan 2 members and for hybrid members.

If you decide to purchase prior service, use your myVRS account to estimate your total purchase cost and follow the steps for obtaining certification of service.

Register for a VRS retirement session or webinar.
As retirement nears, a number of questions may be swirling in your head: Are my finances in order? Have I saved enough? Have I maximized my benefit? How will I spend my time in retirement? VRS offers education and counseling sessions to help you answer those questions.

  • Are You Ready to Retire? – Current Plan 1 and Plan 2 members who are within five years of retirement are guided through important retirement decisions, such as when to retire and selecting a benefit payout option. Other topics include using myVRS and benefits after retirement.
  • Nearing Retirement Workshop – Members within five years of retirement are invited to this half-day workshop, featuring industry professionals who will provide resources to help prepare for the transition to retirement.
  • Eye on the Prize: Almost There! – Late-career members can view this webinar to learn about health care costs and other expenses in retirement, Social Security planning and the VRS ready-to-retire checklist.
  • Your Next Steps – Current Plan 1 and Plan 2 members who are less than 12 months from retirement are guided through the retirement application process. Topics include a timeline of action items, an overview of the required forms, post-retirement considerations, such as taxes and cost-of-living adjustments (COLA) and your VRS resources after retirement.

Final Steps
You’re almost there. VRS counseling is available in person or by phone if you have any final questions, and the Getting Ready to Retire Guide PDF Icon and Getting Ready to Retire Guide for Hybrid Members provide guidelines for completing your Application for Service Retirement (VRS-5) PDF Icon and other forms. You can also watch the tutorial on how to complete the retirement application, which takes you step-by-step through the forms needed tor retirement.

Retirement is a big decision. Take advantage of your VRS resources and be ready to make the most of it.

 

myVRS Outage Ahead

VRS is preparing for system updates in April that will require a multi-day myVRS outage. The site will not be available to members for approximately one week in mid-April. Watch the VRS website and myVRS for upcoming details on the outage. VRS greatly appreciates your understanding as we make enhancements to myVRS and our other systems.

Should an urgent need arise when myVRS is unavailable, call VRS at 1-888-827-3847. Be aware, however, that VRS team members also will have extremely limited access to member records during the outage.

 

2019 Virginia General Assembly Session Underway

The 2019 Virginia General Assembly opened January 9 for a scheduled 30-day session. The General Assembly is considering several pieces of legislation that could affect VRS. Follow the progress of bills on the legislation webpage and look for a summary of VRS-related legislation in the May issue of Member News.

 

FAQ: I Made a New Year’s Resolution to Improve My Financial Awareness. Which VRS Resources Can Help Me the Most?

That’s a smart New Year’s resolution! And if America Saves Week is inspiring you to do more, VRS has the resources for you.

Start with your myVRS account. Through your secure online account you have access to myVRS Financial Wellness, with videos, articles, calculators and courses to assess and improve your financial health.

A good first step is learning about your money personality. Take the Money Personality Assessment to discover the "why" behind your money decisions and your spending habits. Tap into your saving strengths and become more aware of your spending weaknesses, as well as what influences your money decisions. Your quiz results will include steps you can take to improve your finances.

Use the information in your assessment to select the courses, articles and tools you need for your goals. Learn about:

  • Debt and credit management
  • Personal budgets
  • Spending habits
  • Credit cards
  • Student loan repayment
  • Career-development strategies
  • Saving and investing
  • Planning for the future
  • Health insurance and long-term care costs and coverage

If you haven’t activated your myVRS account or haven’t checked it in a while, take time to register or log in today at myVRS.varetire.org.

 

Member Education Icon  Member Education

Classroom and webinar courses are posted on the VRS website as they are scheduled. Register from our Education and Counseling pages.

Retirement Planning
Copyright © 2019 Virginia Retirement System

get adobe reader


unsubscribe from this list    update subscription preferences