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A Publication for VRS Employers
March 2017 | Archives
Your Turn to Ask: Can employees apply to purchase approved FMLA leave that was taken before January 1, 2017?

Modernization Update: Purchase of Prior Service Coming to myVRS for Members in April

VRS is expanding the offerings within myVRS to allow members to calculate cost estimates and initiate purchases of prior service (PPS) online. Please share this article with your colleagues in human resources, payroll and benefit communications to ensure your team is fully up to date on how purchase of prior service is changing for members in myVRS.
 
Beginning in early April, members will have access to a new PPS self-service section within myVRS, where they can:
  • View prior service in their account that is eligible for purchase.
  • Select the type and amount of service to purchase.
  • Choose the order in which to purchase service.
  • Calculate the cost to purchase service.
  • See the impact of purchasing service on their future retirement benefit.
  • Evaluate the time it will take to recover the purchase cost in retirement.
The site also will include counseling tips to guide members through each step of the purchase process. Once members make a purchase decision, they can make lump-sum payments directly to VRS. Or, they can print their cost estimate page and coordinate purchase payment agreements with their employers.
 
You also can use myVRS Navigator to assist the member with calculating cost and navigating a purchase decision. In addition, you will continue to play an important role in certifying and adding new service eligibility to the member’s account. If the member has refunded service before 1988, contact VRS for assistance in researching and certifying this service.
 
A number of resources, coming to VRS University in the Commonwealth of Virginia Learning Center (COVLC) later this month, will aid employers as they assist members in the purchase process:
  • An updated Coordinating VRS Benefits Purchase of Prior Service e-Course will cover the new purchase rules and process.
  • A myVRS Navigator demonstration will walk employers through processing purchase requests.
  • The Purchase of Prior Service Process Guide for Employers will include step-by-step directions and screenshots to assist employers with processing purchase requests in myVRS Navigator.
  • A sneak peek of three member videos in myVRS – an overview of the PPS process, how to select service and how to select payment methods.
  • A myVRS Member Pages Tutorial will feature views of members’ screens for purchasing prior service in myVRS so employers can better assist members in the purchase process.
By viewing these training materials in advance, employers will be better prepared to answer member questions about the new purchase of prior service process within myVRS. To access these materials in the COVLC later this month, search the key words: purchase prior service, purchase service, prior service or PPS.
 
Details on purchase of prior service types, cost windows and payment methods are available on the VRS website and in member handbooks.
 
Refer to the February Employer Update for details on the new Retirement Planner and refreshed Benefit Estimator now available in myVRS. And, you can follow the latest updates coming to myVRS and myVRS Navigator on the modernization webpage.

Mark Your Calendars: Webinar Offers Preview of PPS Self-Service for Members in myVRS

Register now for the third and final installment of the Modernization Update webinar series, Modernization Update 3: A Preview of PPS Self-Service, which takes place Thursday, March 23, 10-11 a.m. Get an overview of the new functionality in myVRS that allows members to initiate the purchase of prior service online starting in April. This presentation will walk through the screens, explain purchasing rules, outline the steps needed to finalize the purchase and discuss the employer’s responsibilities. Register today.

 

Political Subdivisions and Schools: Notify VRS of VLDP and Local Program Disability Claims or Status Changes

Whether you provide the Virginia Local Disability Program (VLDP) or a comparable disability plan to your Hybrid Retirement Plan members, it’s essential to notify VRS when an employee has a long-term disability claim or change in disability status so that other VRS benefits can continue.

For example, members on long-term disability continue to accrue VRS service credit and remain eligible for Group Life Insurance and the health insurance credit, if the employer participates in these programs.

If you provide a comparable disability program: 
You are responsible for notifying VRS about new long-term disability claims or changes to a member’s disability status. Use the Reporting Employees on Long-Term Disability With a Comparable Plan job aid  to help you report these members.

If you offer the Virginia Local Disability Program: 
The program’s third-party administrator will submit information to VRS when an employee has a long-term disability claim or change in disability status.

Your Employment Processor will need to take the following steps in myVRS Navigator:
  1. Change the status in the Employment Status field from Active to Leave Without Pay (LWOP).
  2. Change the Group Life Insurance End Date to the date the disability claim ends. If you do not know the end date, estimate three to six months. Members on long-term disability continue to be eligible for VRS Group Life Insurance.
  3. If the member is on a less-than-12-month contract, you must change the contract to 12 months. The start date of the contract should be the same as the long-term disability start date.
  4. If the long-term disability claim ends, change the Employment Status to Active or Separated.
 

Need Help Submitting Members’ Auto-Escalated Voluntary Contributions and Employer Match?

The Hybrid Retirement Plan’s auto-escalation feature went into effect January 1. If you had hybrid plan members who had not elected to make voluntary contributions prior to January, you will need to adjust their contribution rates in your payroll system to ensure the voluntary contributions and corresponding employer matches are properly submitted to ICMA-RC.
 
Your employees also may notice new information added to their statements as a result of auto-escalation. Members making voluntary contributions receive three statements, one for the Hybrid 401(a) Cash Match Plan, one for the Hybrid 457 Deferred Compensation Plan and a combined statement for both Hybrid Retirement Plans.
 
Correct reporting of contributions to the hybrid defined contributions component is essential each pay period. Likewise, it’s important to quickly correct any contribution reporting errors so that you avoid incurring adjustment fees or causing the employee to miss investment earnings. Please refer to the Hybrid Retirement Plan Adjustment Policy  for more information.
 
VRS and ICMA-RC are here to help you ensure your hybrid member and employer contributions are set up correctly and invite you to take full advantage of the following resources.
 
EZLink Deferral Changes Report
  • Decentralized state agencies, school divisions and political subdivisions must download the Quarterly Deferral Changes Report via EZLink  to see the new deferral amounts and process payroll changes.
  • Centralized state employers using the Commonwealth’s Integrated Personnel and Payroll System (CIPPS) should follow the normal payroll certification process.
Training and Support
The Creating EZLink Contribution Submissions Online webinar covers the full process, from creating an initial file through submission.
 
If you need additional assistance, please contact the ICMA Defined Contribution Plans Employer Support Team at 1-877-327-5261 and select option 3.
 
Continue to Encourage Voluntary Contributions
Employees in the Hybrid Retirement Plan may voluntarily contribute up to an additional 4 percent of their creditable compensation to the defined contribution component of their retirement plan each month. They can increase their voluntary contribution elections on a quarterly basis. The next quarterly deadline is March 15 at 4 p.m.
 
Please encourage employees to take advantage of this opportunity to maximize retirement savings. It’s quick and easy! They’ll just need to log into their hybrid plan account, click View Account for the Hybrid 457 Deferred Compensation Plan, then select Contributions and click on Change My Contribution Amount. Or, they can call ICMA-RC Investor Services at 1-877-327-5261 and select option 1.
 

Important Reminder for State Employers: VSDP Has One-Year Waiting Period for Non-Work-Related Short-Term Disability Benefits

The Virginia Sickness and Disability Program (VSDP) provides income protection to state employees who cannot work because of a non-work-related or work-related illness or injury.
 
Members of VRS Plans 1 and 2, the Hybrid Retirement Plan, the State Police Officers' Retirement System (SPORS) and the Virginia Law Officers' Retirement System (VaLORS) are enrolled automatically in VSDP upon state employment.
 
A key provision of VSDP requires a one-year waiting period (12 consecutive calendar months) from the date of hire for state employees before they become eligible for non-work-related short-term disability. (The one-year waiting period does not apply to work-related short-term disability.)
 
To bridge the one-year gap in VSDP coverage for non-work-related disabilities, newly hired state employees may consider purchasing short-term disability coverage from one of these insurance vendors. Employees pay for this voluntary coverage through payroll deduction. The Commonwealth of Virginia does not endorse any of these companies.
 
Resources for Employers
 

Retiring or Separating Employees Retain Option
to Keep Funds With VRS

Leaving funds in their VRS defined contribution plan may be a cost-effective option for members who are retiring or separating from their VRS-covered positions.
 
Eligible Plan 1 and 2 members who participate in the Commonwealth of Virginia 457 Deferred Compensation Plan and the Virginia Cash Match Plan are setting aside dollars for their retirement. Likewise, members of the Hybrid Retirement Plan save for retirement by participating in the Hybrid 457 Deferred Compensation Plan and the Hybrid 401(a) Cash Match Plan.

State employees in the hybrid plan also may participate in the Commonwealth of Virginia 457 Plan if they are contributing the maximum 4 percent voluntary contribution to the Hybrid 457 Plan. Higher education, school division and political subdivision employees in the hybrid plan may participate in the Commonwealth of Virginia 457 Plan as well, or a 403(b) plan, if offered by their employers.
 
As employees retire or leave their jobs, it’s important for them to make well-informed decisions about their future savings. Refer them to the appropriate Leaving Employment Guide:
When retiring or separating from VRS-covered positions, members do not have to take their money out of VRS defined contribution plans. The Leaving Employment Guides lay out several reasons why they might decide to keep their money with VRS, including: low fees, tax-efficient compounding, a variety of available investment options and support from knowledgeable Defined Contribution Plans Retirement Specialists.
 
Five Questions Members Should Ask Before Moving Money Out of Their VRS Defined Contribution Accounts
  1. Do I understand the plan fees and how they compare to VRS defined contribution plan fees?
  2. Are the investments suitable for my situation? Are they competitively priced?
  3. Will I receive personalized one-on-one assistance when I need it? What other education resources are available?
  4. Is there plan oversight and protection?
  5. Can I withdraw my money when I need it without a tax penalty?
Members can find more information in the April 2017 issue of the FOCUS newsletter, which will be included with their second-quarter statements.
 

Counsel Members on Benefits of Roth 457 After-Tax Savings

Tax season presents employers with an opportunity to advise employees of the Roth contribution option available to all participants in the Commonwealth of Virginia 457 Deferred Compensation Plan.
 
Roth deferrals are made on an after-tax basis. The deferrals and associated earnings can be withdrawn tax-free in retirement if the requirements for a qualified distribution are met. Participants may designate a portion, or all, of their contributions for the Roth treatment. (The Roth option is not available for the Hybrid 457 Deferred Compensation Plan.)
 
What Are the Advantages of Roth Contributions?
  • Qualified withdrawals of Roth assets are not subject to taxes.
  • Having both pre-tax and Roth options available allows participants to choose the type of contributions that best fit their lifestyles. (Roth contributions may be most appropriate for participants who expect to be in a higher tax bracket in retirement.)
  • Compounded earnings: Just as with pre-tax deferrals, Roth contributions are invested in funds chosen by the participant and any earnings on those contributions are reinvested and included in the calculation of future earnings.
Employees Can:  

  Announcements

Legislative session: The General Assembly will return for its reconvened session April 5. VRS will publish a legislative summary in the May Employer Update.
 
Latest VRS valuation reports available online: FY2016 actuarial valuation reports for VRS, other post-employment benefits and the Line of Duty Act Fund are available for download. Be sure to bookmark the VRS Financial Reporting page and refer to it for resources and links to assist with financial reporting related to VRS-administered benefit plans.

Purchase of Prior Service: Employers now use new screens in myVRS Navigator and follow new procedures to add purchase of prior service eligibility and create purchase quotes. Download the Purchase of Prior Service Process Guide for Employers  to use when processing requests until April 1, when members will have access to purchase prior service through their myVRS accounts.

Annual Reports: VRS’ 2016 Comprehensive Annual Financial Report (CAFR)  is now available for download. For the first time, VRS also has produced a Popular Annual Financial Report (PAFR) . The PAFR was designed as an easy-to-read summary and overview of key VRS financial, investment and statistical highlights, all of which are reported in more detail in the CAFR for the fiscal year ending June 30, 2016.

Are you new to administering VRS benefits? Let us know so our employer representative team can introduce themselves to you and assist you with locating resources, manuals and training opportunities.
 
Order VRS Publications.
 

  Employer Training & Events

Classroom and webinar courses are posted on the VRS website as they are scheduled. Stay tuned to Employer Training for new offerings. Other e-learning modules are available through VRS University in the Commonwealth of 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 educational resources are available to Hybrid Retirement Plan members. They can register for a group seminar to learn more about the hybrid plan defined benefit and defined contribution components as well as other VRS benefits. Several seminar sessions are available in early March in various regions across Virginia. 

 

  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. Please use the fax number indicated on the form you are sending to ensure the correct department receives it. 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.

 

Financial Reporting

In the employers’ Financial Reporting section you can find resources and links to assist with financial reporting related to VRS-administered benefit plans.

  Your Turn to Ask

Q: Can employees apply to purchase approved FMLA leave that was taken before January 1, 2017?

Yes, if the leave meets the conditions set out in the purchase of prior service legislation that became effective January 1. The employer must have approved the leave at the time it was taken as leave for a serious health condition either for the employee or an immediate family member (spouse, child or parent), both as defined under FMLA.

FMLA defines “serious health condition” as an illness, injury, impairment or physical or mental condition that involves a) inpatient care in a hospital, hospice or residential medical care facility, or b) continuing treatment by a health care provider.

Members are eligible to purchase up to 12 workweeks of employer-approved FMLA leave in a 12-month period. The member’s current employer or former employer would certify the approved period of leave and enter it into the member’s record. The employee can then apply to purchase this service.

 

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

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