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A Publication for VRS Employers
April 2017 | Archives
Your Turn to Ask: Are rollovers allowed to the defined contribution component of the Hybrid Retirement Plan from another retirement savings account?

Couple at computer with myVRS logo

Modernization Update: Members Can Initiate Purchases of Prior Service Online Through myVRS

VRS members now 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 offers 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.
Training Resources for Employers
A number of resources are available in VRS University in the Commonwealth of Virginia Learning Center (COVLC) to help you assist members in the purchase process:
  • An updated Coordinating VRS Benefits Purchase of Prior Service e-Course covers the new purchase rules and process.
  • A myVRS Navigator demonstration walks employers through processing purchase requests.
  • The Purchase of Prior Service Process Guide for Employers includes 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 features views of members’ screens for purchasing prior service in myVRS so employers can better assist members in the purchase process.
Viewing these training materials will help you answer member questions about the new purchase of prior service process within myVRS. To access these materials in the COVLC, search the key words: purchase prior service, purchase service, prior service or PPS. Never visited the COVLC? Learn how to access VRS University online courses.
And if you missed the Modernization Update 3: A Preview of PPS Self-Service webinar in March, take time to review the recorded version. It provides an overview of the new PPS functionality in myVRS. Additional details on purchase of prior service types, cost windows and payment methods are available on the VRS website and in member handbooks.
Police officer with LODA logo

Line of Duty Act Update

LODA Health Coverage Information Sent to Employers, Participants
As you may be aware, the Virginia General Assembly made changes to the Line of Duty Act (LODA) benefits, eligibility and administration that become effective July 1, 2017:
  • VRS will make all LODA eligibility determinations and issue benefit payments for employers that participate in the VRS-administered LODA Fund.
  • The Department of Human Resource Management (DHRM) will administer LODA Health Benefits Plans for all eligible LODA recipients to provide consistent coverage.
In late March, DHRM mailed an information booklet  to current LODA health plan participants, which included a summary of the new health benefits program and instructions for transitioning to the new plans.
  • Employers not participating in the Line of Duty Act Fund: DHRM also provided monthly health plan premium information  for each coverage group. 
  • LODA Fund participating employers: Health coverage premiums for eligible participants will be paid from the LODA Fund by VRS. Participating employers will not receive a separate bill for this coverage since it is covered in their annual premium contributions to the LODA Fund.
For additional information about DHRM’s administration of the LODA Health Benefits Plans, refer to DHRM's transition Q&A for participants and employers .
You also may refer to the LODA Transition Overview  for information about upcoming changes to eligibility requirements and benefits.
LODA Fund Participating Employers: Update Your Coverage Lists
If you participate in the LODA Fund, VRS will contact you this month to request an update of your LODA Fund coverage list.
Packets will be sent to human resource staff and will include your list of fiscal year 2017 eligible employees and volunteers, along with instructions for updating the list. Please return updated lists to VRS on or before May 31.
VRS will review the coverage list and contact you regarding any questions. If a person has a change in his or her role, please note it in the LODA coverage list you provide to VRS.

If you do not receive a packet by the end of April, please email loda@varetire.org.

Encourage Employees Retiring This Summer to Apply Now

Summer is a busy season for retirement applications, so remind employees contemplating retirement to prepare for the big day now.
Employers may send retirement applications to VRS at least 60 days in advance of the date the employee plans to retire. (As a reminder, VRS cannot process applications received more than four months in advance of retirement.)

Tips for Employers Employees may contact a VRS member counselor by phone at 1-888-VARETIR (1-888-827-3847). In-person counseling sessions are offered on a first-come, first-served basis at 1111 East Main Street, Richmond, VA 23219 from 8:30 a.m. to 4 p.m., Monday through Friday.
Women at desk on phone

Counsel Employees About Key Return-to-Work Provisions

Whether you’re counseling pre-retirees, hiring a retiree or assisting an employee with a subsequent retirement, it’s helpful to consider the following guidelines to ensure you comply with all applicable Internal Revenue Service and VRS rules:
  1. If retirees return to work in a non-VRS-covered position, they can continue to receive VRS service retirement benefits. However, you cannot designate a position as non-VRS-covered simply to accommodate a retiree in the position.
  2. If a retiree returns to part-time, non-covered employment:
    1. There can be no verbal or written offer of reemployment between you and the employee before retirement. Both you and your employee must certify this by signing the Application for Service Retirement (VRS-5)  or the Application for Disability Retirement (VRS-6) .
    2. Structure the position so the hours worked are 80 percent or less than a full-time position.
    3. A retiree should not be expected to perform all the duties of his or her pre-retirement, full-time position.
    4. Employers should evaluate the need for the position periodically if it does not have an end date.
  3. If a retiree returns to covered employment — usually meaning a full-time, salaried position with an employer that participates in VRS — you will begin to report the retiree to VRS, the retirement benefits will stop and the retiree again will become an active member.
For more information, refer to the Post Retirement Benefits chapter in the Employer Manual  or Code of Virginia § 51.1-155(B).

Rehiring Retirees on an Interim Basis
In some cases, retirees can work on an interim basis for up to six months without interruption in their retirement benefits. Examples include hiring a retiree while recruiting for a full-time permanent employee for the position or while an incumbent is on leave. Interim appointments are evaluated on a case-by-case basis. If you are considering hiring a retiree on an interim basis, please call VRS toll-free at 1-888-VARETIR (1-888-827-3847) and ask to speak to your Employer Representative

Rehiring Retirees for Consulting or Independent Contractor Services
If you hire a retiree as a consultant or independent contractor, it is important to know that the retiree may still be considered a VRS-covered employee depending on the nature of your business relationship with the retiree. In addition to VRS return-to-work implications, the misclassification of an employee as a consultant or contractor can also have tax consequences. VRS and the IRS examine these situations on a case-by-case basis.
VRS advises that you consult with legal counsel to accurately determine whether an employment relationship exists between you and any retiree who you hire.

Collecting Benefit Overpayments
If you hire a retiree in a position that would be considered covered and do not report the retiree to VRS, or if you hire a retired former employee in a non-covered position without a bona fide break in service, you may be required to repay to VRS any retirement benefits the retiree receives while working in the position.
As provided in Code of Virginia § 51.1-124.9(B), VRS is authorized to recover benefit overpayments from an employer whose noncompliance with return-to-work provisions caused the overpayment.

COLA Rate for 2017 Set at 1.26 Percent

The VRS Board of Trustees announced a 1.26 percent cost-of­-living adjustment (COLA), effective July 1 for eligible retirees (Plan 1, Plan 2 and the Hybrid Retirement Plan). If retirees are eligible for a COLA, the increase applies to benefit payments deposited on August 1.
COLAs help retirement benefits keep pace with inflation. The COLA is based on the Consumer Price Index for all Urban Consumers (CPI-U) as provided for in the Code of Virginia. Each year, the U.S. Bureau of Labor Statistics publishes the CPl-U, which is a measure of the average change in prices paid by consumers for food, rent, mortgages, clothing, transportation, medical care and fuel. During years of no inflation or deflation, the COLA is 0 percent.
Find more information on how the COLA is calculated in Your Retirement Roadmap: Handbook for Retirees Under Plan 1 and Plan 2  and the Getting Ready to Retire Guide for Hybrid Members .
RealizeRetirement truck

RealizeRetirement Tour Rolls Into Virginia

Retirement planning doesn’t have to be a chore. In fact, it can be exciting to envision the myriad possibilities for life after work. That’s the aim of ICMA-RC’s RealizeRetirement Tour, stopping at several locations in Virginia next month.
When the brightly colored tour truck rolls into town, it brings the fun with it. A number of engaging, interactive displays will encourage members to begin saving for their future. For those wanting travel in retirement, for example, a “selfie station” will spirit them to the far-flung locales they might visit if they start planning now. A virtual-reality experience will transport them into the work other public-sector employees do to serve their communities.
If your workplace is located near a tour stop, encourage members to turn out for the activities, which aim to inspire some forward-thinking about retirement and how to save for it now.
State employees working in Richmond can enjoy the virtual retirement experience when the tour makes a stop May 8 (at VRS) and May 9 (City of Richmond). VRS counselors will be on hand May 8 to help answer members’ questions about retirement and other benefits.
Other stops happening in the commonwealth include:
  • Henrico County, May 10
  • Tidewater area, May 11 and 12
  • Northern Virginia in June
For more information, visit www.varetire.org/rrtour.

VRS Member Handbooks Revised

VRS has updated plan handbooks to include guidance to members on purchasing prior service using the self-service features now available in myVRS.
Electronic PDF versions of the handbooks, dated March 2017, are available for download from the VRS website. If you have ordered handbooks since January, VRS will mail backorders of printed copies in April and fill all new orders as well.
The Code of Virginia requires that all new employees receive a summary plan description (member handbook) within 90 days of employment. Providing a print or an electronic copy is acceptable.

As a reminder, all Plan 1 handbooks are no longer available in print and Plan 2 handbooks for state, teacher and local government employees are no longer available in print, as those plans are closed to new members. However, the handbooks are available on the VRS website and you can provide links to members who want to know more about their plans.
VRS does print Plan 2 handbooks for VaLORS, SPORS and certain hazardous duty employees in political subdivisions and handbooks for Hybrid Retirement Plan members. Handbooks also are available for the Virginia Local Disability Program (VLDP), Virginia Sickness and Disability Program (VSDP) and VRS Disability Retirement.

Financial Literacy Month logo

Financial Literacy Month: VRS Offers Resources to Help Members Up Their Financial Game

To mark Financial Literacy Month, you can help your employees improve their understanding of financial principles and best practices. VRS offers a variety of educational presentations and resources related to retirement planning and financial literacy, including:
  • Are You Ready to Retire? This presentation for current Plan 1 and Plan 2 members (hired before January 1, 2014), who are within five years of retirement, guides them through important retirement decisions (such as when to retire and selecting a benefit payout option). Other topics include using myVRS and benefits after retirement. Upcoming classroom sessions are set for April 11 in Chester, April 12 in Lynchburg and April 20 at VRS. Live webinars are planned for April 3, May 24 and June 6 (recordings will be made available online).
  • Nearing Retirement Workshop: During this half-day workshop, industry professionals will share information to help members better prepare for the transition to retirement. Featured topics include social and psychological changes that accompany retirement, how to determine retirement costs and the timing of Social Security benefits. Upcoming sessions: April 11 at John Tyler Community College (Chester) and April 12 at Central Virginia Community College (Lynchburg).
  • Securing Today and Tomorrow, a session focusing on Social Security, 10-11:30 a.m. April 13 at VRS, 1200 East Main Street, Richmond, VA 23219.
  • ICMA-RC Plan Investments and Distribution Strategies, noon-1 p.m. April 20 at VRS, 1111 East Main Street, Richmond, VA 23219 (third floor conference room in the pavilion).
  • Hybrid Retirement Plan Features and Benefits, 2-3 p.m. April 20 at VRS, 1111 East Main Street, Richmond, VA 23219 (third floor conference room in the pavilion).         
  • VRS also offers Money Matters courses to help members up their financial game.
Check the VRS website for additional details and registration information.
Public Service Recognition Week logo

Public Service Recognition Week Set for May 7-13

Celebrated the first full week in May, Public Service Recognition Week recognizes those who have chosen public service careers as well as the many ways government services make life better for all citizens.
VRS is committed to serving those who serve others. We salute dedicated public service employees whose work improves lives in communities throughout Virginia.
The Virginia Department of Human Resource Management (DHRM) offers a Public Service Recognition Week toolkit for managers that includes ideas and resources to help employers honor the work and service of their employees.



Virginia Sickness and Disability Program (VSDP) and workers’ compensation training: VSDP and workers’ compensation will be on the agenda at several training sessions for state employers this spring. Coordination of these services is essential to providing employees with the best experience possible during their disability or injury. You may register for one of these sessions through the Commonwealth of Virginia Learning Center. Search the key words: DHRM, WC, WCS Roadshow.

Legislative session: The General Assembly will return for its reconvened session April 5. VRS will publish a legislative summary in the May Employer Update.
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

Be sure to register for a pair of Coordinating VRS Benefits webinars scheduled for later this month.
  • Purchase of Prior Service, 10 a.m. to noon Thursday, April 20: This webinar is designed to assist benefit administrators in understanding current Purchase of Prior Service rules and processes. Learn more about the rules surrounding types of service, eligibility to purchase and available payment methods, as well as ways employers can help employees complete the purchase process.
  • Service Retirement, 10-11 a.m. Wednesday, April 26: This webinar will help employers explain the service retirement eligibility requirements, payout options and educational opportunities to their employees.
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

VRS has updated the Application for Purchase of Prior Service Credit (VRS-26)  to include instructions for members on using the new self-service tools to initiate purchases of prior service in myVRS. The following forms — Authorization for After-Tax Payroll Deduction to Purchase Service Credit (VRS-26C) and Authorization for Pre-Tax Salary Reduction to Purchase Service Credit (VRS-26E) — no longer are available because members confirm their purchases online through myVRS.

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.

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.  

  Your Turn to Ask

Q: Are rollovers allowed to the defined contribution component of the Hybrid Retirement Plan from another retirement savings account?

The defined contribution component of the hybrid plan includes two accounts: the Hybrid 401(a) Cash Match Plan and the Hybrid 457 Deferred Compensation Plan. Rollovers are not allowed into the hybrid 401(a) cash match plan. Members can roll over money into their hybrid 457 plan from other eligible plans, which include a:
  • 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)
  • 457(b) and 403(b) plans
  • Federal Thrift Savings Plan
  • Traditional Individual Retirement Account (IRA)

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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