In This Edition
- Line of Duty Act Funding Changes Effective July 1, 2011
- Refund Rules for Contract Employees
- K-12 Critical Shortage Reports Due November 1
- VRS University Open to Political Subdivision Employers
- myVRS for Employers: How Do I Become an Authorized User?
- New State Power-of-Attorney Law in Effect
- October is ORPHE Open Enrollment Month
- Celebrate National Save for Retirement Week October 17-23
- Modernization Update
- Your Turn to Ask: Is the employer contribution rate the same for Plan 1 and Plan 2 members?
Line of Duty Act Funding Changes Effective July 1, 2011
Among the legislative actions taken during the 2010 session of the General Assembly was a change in how benefits under the Virginia Line of Duty Act (LODA) will be funded. The 2010 Appropriations Act established a new Line of Duty Act (LODA) Fund with VRS as the investment manager. The Commonwealth of Virginia and localities that employ eligible hazardous duty professionals on a paid or voluntary basis will contribute to the LODA Fund for their respective covered individuals. Localities have the option to establish their own fund rather than participate in the LODA Fund. These changes go into effect July 1, 2011.
As defined by the Code of Virginia, those eligible for LODA benefit coverage include hazardous duty state and local employees and fire department and rescue squad volunteers. These covered individuals may be full time or part time. VRS-participating employers that hire hazardous duty employees are not required to have elected enhanced hazardous duty coverage for these employees to be covered under LODA.
VRS is now identifying eligible hazardous duty professionals who work for political subdivisions that do not participate in VRS as well as volunteer professionals. VRS also will be verifying local hazardous duty employees covered under VRS who are eligible for LODA benefits to ensure all eligible LODA employees are identified. Over the next several months, your county, city or town administrator or manager will be contacted to confirm the list of LODA-eligible individuals compiled by VRS.
The 2010 Appropriations Act did not change the LODA benefit provisions, only how they will be funded. The identification of covered individuals is an integral part of the process. It will allow the actuary to calculate the cost of the program and the contributions necessary for proper funding. The Department of Accounts will continue to administer LODA benefits. VRS will be responsible only for collecting contributions as well as managing and investing the LODA fund.
Local Enrollment Period to Occur This Spring
If your locality employs paid and/or volunteer hazardous duty professionals eligible for LODA benefits, you will receive an enrollment packet from VRS this February. The packet will include information about the spring 2011 enrollment period, a sample resolution and guide and your contribution rate should your local board elect to participate in the LODA Fund. Local elections are due by no later than June 30, 2011.
Refund Rules for Contract Employees
Refunds are payable no earlier than one full calendar month from an employee’s last day of employment. The one-full-calendar month break in service must take place over a period he or she normally would work. For teachers and other contract employees, summer breaks or intersession periods do not count toward this break in service. Employees cannot receive a refund until your payroll indicates that they have terminated all full- and part-time employment. Please mark these employees as terminated, not inactive, on your September VRS payroll report.
Example: Jim leaves his teaching position at the end of the school year in June and wants to take a refund. The clock for his one-full-calendar month break in service will begin September 1. Following receipt of his employer’s payroll in October for the month of September, VRS will be able to process his refund application. His application should be processed within 45-60 days from that point. The refund application should be submitted to VRS in the month Jim is marked as terminated in your VRS payroll report.
- Before receiving a refund, employees must leave all employment with a VRS-participating employer, including non-covered employment. For example, an employee who works in a covered position and a wage position would have to leave both jobs in order to receive a refund.
- Before receiving a refund, employees must have at least a one-full calendar month break in service from their employer before returning to a non-covered position. For example, an employee who leaves a covered position for a wage position with the same employer without a break in service is not eligible for a refund. The Commonwealth of Virginia, including all state agencies and public colleges and universities, is considered one employer. Public school divisions and political subdivisions are considered separate employers.
- Employees must be vested (have at least five years of service credit) to be eligible for a full refund of their member contribution account balance. Employees who are not vested are eligible for a refund of any contributions they have made to their member contribution account, plus accrued interest. They are not eligible for a refund of any contributions made by their employer after July 1, 2010, or the interest on these contributions. Taking a refund cancels an employee’s membership and eligibility for any future benefits. Employees covered under Plan 1 who leave employment and withdraw all their funds will be rehired under Plan 2 if they return to covered employment with no service credit in VRS or no account balance in a Virginia optional retirement plan.
K-12 Critical Shortage Reports Due November 1
November 1 is the deadline to report information on employees working full time in K-12 critical shortage teaching and administrative positions for the 2010-2011 school year. Please complete and submit a Certification of Eligibility for Critical Shortage Teachers and Administrators (VRS-160) to VRS for each eligible employee. If you are not currently employing critical shortage personnel, complete and submit a Certification of Non-Participation of Critical Shortage Teachers and Administrators (VRS-160A) 26kb.
The Virginia Department of Education has established criteria for K-12 critical shortage positions. VRS is required by the Code of Virginia to monitor the critical shortage program annually by accounting for all employees serving in critical shortage positions in any school division.
To be considered for a critical shortage position, VRS retirees must:
- Be licensed by the Virginia Board of Education for the position they will hold.
- Have a bona fide break in service of at least 12 consecutive months between their retirement date and the date they are hired in a critical shortage position. This break in service means not working in any full-time, part-time or temporary position, including a summer school or substitute teaching position, with any VRS-participating employer.
- Not have retired under an Early Retirement Incentive Program (ERIP), if applicable, unless the retiree is receiving an unreduced VRS benefit.
- Not have taken a refund of their member contributions and interest or deferred their retirement.
For more information see Return to Work.
VRS University Open to Political Subdivision Employers
If you are an administrative, payroll or primary or secondary human resource contact of a political subdivision employer, you will be able to access VRS University through the Knowledge Center in early October. You will receive two e-mails during the registration process. The first one will come from VRS (externalKC@varetire.org) advising that you will soon be pre-registered to log into VRS University. Once VRS registers you, you will receive a second automated e-mail with your log-in information.
Through VRS University, you will be able to take online courses anytime via the Knowledge Center. Course topics include coordinating VRS benefits, employer reporting, preparing employees for retirement, legislative changes, severance benefits and more. The Knowledge Center is a web-based platform designed to present a variety of training courses and knowledge-sharing opportunities to users. In addition, the system allows VRS to track usage of these courses to assess future employer education needs.
Once you receive the automated e-mail message with your personal log-in ID and password, log into VRS University by selecting the link in the e-mail. VRS advises that you bookmark the Web page for your convenience. The log-in page includes a user’s guide and course navigation information for new users.
Employer e-learning courses will remain on the VRS website until November. After November, these courses will only be available through VRS University via the Knowledge Center.
myVRS for Employers: How Do I Become an Authorized User?
To access myVRS for Employers, you must be listed as an authorized primary or secondary human resource or payroll contact. Your agency administrator can update this list by completing and submitting a signed Authorization of Employer Contacts (VRS-67) . Once your agency administrator receives a confirmation notice from VRS, you can register for a myVRS for Employers account.
Online MBPs Available
The 2010 Member Benefit Profiles (MBPs) are available through myVRS for Employers and in employees’ myVRS member online accounts. The MBP is your employees’ annual benefit statement based on information you reported to VRS as of June 30, 2010.
New State Power-of-Attorney Law in Effect
Effective July 1, the Virginia General Assembly passed, and the Governor signed, the new Uniform Power of Attorney Act governing the appointment of agents acting under powers of attorney. The act is modeled after the Uniform Power of Attorney Act developed by the National Conference of Commissioners on Uniform State Laws.
TheVRS Durable Power of Attorney (VRS-901) 43kb has been updated to reflect the provisions of the new act. Read more about the provisions and what this means for your employees.
October is ORPHE Open Enrollment Month
If you have employees who participate in the Optional Retirement Plan for Higher Education (ORPHE) Plan 1 or Plan 2, remind them that they have until October 31 to change the provider for their plan contributions. The two plan providers are Fidelity Investments and TIAA-CREF. ORPHE participants should read the Open Enrollment Notice to Participants 14kb for more information and instructions on submitting a change. Please communicate the process for changing providers to your employees.
Celebrate National Save for Retirement Week October 17-23
For most workers, a paycheck means an opportunity to achieve the American dream. That dream includes a comfortable retirement. Increasingly, that means saving for retirement to supplement retirement benefits such as the VRS benefit and Social Security. October 17-23, National Save for Retirement Week, offers a great opportunity to promote a culture of saving among your employees.
The easiest way for employees to save is through an automatic payroll contribution to an employer-sponsored tax-deferred savings plan, such as the Commonwealth of Virginia 457 Deferred Compensation Plan or a 403(b) or government 457 plan you offer.
Modernization Systems Requirements Sent to Employers
VRS recently distributed Modernization systems requirements documents to employers. These documents, which are crucial to initiating Modernization, discussed the technical requirements and reporting methods available to employers. Employers were asked to confirm their reporting method with VRS by October 1. If you have not yet responded, please e-mail email@example.com as soon as possible. State agencies who report through CIPPS will receive information regarding Modernization at a later date. Questions? Contact firstname.lastname@example.org.
Updated Creditable Compensation Webinars Available
Two Creditable Compensation and Service Credit Accrual webinars are available again on the Modernization tab at www.varetire.org. The version for schools and higher education employers features four new slides addressing calculations for a contract employee paid over 12 months. Due to feedback from employers, these slides were added to this presentation following its initial release. You can find the new content on slides 30-33.
Introducing: myVRS Navigator
In November 2011, myVRS Navigator will replace myVRS for Employers and other tools that you currently use to provide data to VRS. myVRS Navigator will be a more robust tool that will guide you in your interaction with VRS, such as enrolling new members and sending data to VRS.
The logo, as shown here, is a modification of the established myVRS logo and builds on the familiarity you already have with the myVRS product.
In the future, members and retirees will interact with VRS using myVRS Navigator. Through this tool, members will see all of the information they currently view in their myVRS accounts, and this enhanced tool will enable them to apply for retirement and other benefits online. In addition, retirees will be able to transact business online with VRS.
Q: What are the “job names” VRS will require for employees after Modernization?
A: Job name is a new data field VRS will require beginning November 2011 with the launch of the myVRS Navigator employer portal. Job names are VRS-defined, based on plan-specific benefits provided by the Code of Virginia. In most cases, they may not be the same as the position names or titles you use for your employees.
VRS job names replace the special coverage indicators (such as for enhanced benefits) that you use now to identify members eligible for particular benefits.
When you enroll a new employee, myVRS Navigator will offer you one or more options in the job name data field. The job name you select for the employee will populate the benefits and programs that apply to that employee. This selection also will generate specific communications to the employee about his or her VRS membership and benefits.
This month, VRS will send your organization’s Modernization Liaison a customized list of job names that reflect the benefits you provide for your employees under VRS. Your Modernization Liaison should share the list with your human resource, payroll and IT departments.
Your Turn to Ask
Q: Is the employer contribution rate the same for Plan 1 and Plan 2 members?
A: Yes, for employees covered under the VRS defined benefit plans, the employer contribution rate is the same for both Plan 1 and Plan 2 members. You will not be required to prepare separate payroll reports for each group.
If you have employees participating in the Optional Retirement Plans for Higher Education, Political Appointees or School Superintendents, the employer contribution sent to the plan’s third-party administrator will differ depending on whether the employee qualifies for Plan 1 or Plan 2.