In This Edition
- VRS Experiences 14.1 Percent Return for 2010
- Online MBPs Now Available
- VRS University Available to State Agencies
- Member News Now Online
- State Employees Can Contribute Bonus to Deferred Savings Plans
- COV Voluntary Group Long Term Care Program Fall Enrollment Begins October 18 for Schools and Political Subdivisions
- Celebrate National Save for Retirement Week in October
- September is Life Insurance Awareness Month
- Register for a Deferred Compensation Plan USERRA Webinar
- Your Turn to Ask: If an employee covered under the VRS Plan 2 dies in service, is the beneficiary eligible for any employer contributions paid to the member contribution account?
VRS Experiences 14.1 Percent Return for 2010
The Virginia Retirement System (VRS) experienced a 14.1 percent return on its investment portfolio for fiscal year 2010, ending the year with $47.7 billion in assets. The three-year annualized return was -4.9 percent and the five-year annualized return was 3.1 percent. These returns compare to the intermediate policy benchmark returns of 15.3 percent, -4.4 percent and 2.9 percent, respectively for the last one-, three- and five-year periods.
"We are pleased with last year’s performance, especially in light of a number of defensive positions initiated in the portfolio over the last few years. With over 50 percent of the portfolio allocated to a combination of investment grade bonds, credit strategies and lower volatility equity investments, last year’s performance was particularly strong on a risk-adjusted basis,” said Chief Investment Officer Charles W. Grant.
Online MBPs Now Available
The 2010 Member Benefit Profiles (MBPs) are now available through myVRS. The MBP is your employees’ annual benefit statement based on information you reported to VRS as of June 30. Read more.
VRS University Available to State Agencies
Beginning in September, state agencies will have access to VRS University, a series of online VRS training courses available through the Knowledge Center for state agencies, which is hosted by the Department of Human Resource Management (DHRM). Course topics include coordinating VRS benefits, employer reporting, preparing employees for retirement, legislative changes, severance benefits and more.
Your agency’s Knowledge Center administrator recently received an e-mail from the Knowledge Center list serve announcing the courses available for download. If you need assistance adding the VRS University courses to your Knowledge Center, see the instructions titled “Pull Shared Content into the Knowledge Center” located in the Knowledge Center’s Documentation Team Room/Team Center. View a list of participating agencies.
If your agency does not have a Knowledge Center, you can access these courses at the Commonwealth of Virginia Knowledge Center. First-time users should follow the instructions to register in the Commonwealth of Virginia Knowledge Center 122kb. If you have trouble accessing or registering, please contact the Commonwealth of Virginia Knowledge Center Administrator.
After November, when all employers that report to VRS are registered for a Knowledge Center, VRS training courses will be available through VRS University only. Please stay tuned to Employer Update for details. Modernization courses will be added to the VRS University curriculum. Modernization liaisons will receive a notice along with log-in instructions once the courses are available.
Member News Now Online
The first online issue of Member News was published August 17. Publication and human resource contacts received a link to this issue to distribute to employees by e-mail or post on their internal website. This link connects your employees to information about:
- 2010 Member Benefit Profile
- Details of the VRS Plans 1 and 2
- Purchase of prior service including new requirements for Plan 2 members
- Retirement education opportunities
- Upcoming events and other important information
State Employees Can Contribute Bonus to Deferred Savings Plans
State employees who receive a bonus payment on December 1 may contribute some or all of their bonus to the Commonwealth of Virginia 457 Deferred Compensation Plan, if they participate in the plan. Faculty who participate in their institution’s 403(b) plan also can contribute their bonus to this plan. The contribution will allow state employees to defer income taxes on the bonus until they withdraw the money from their plan.
457 plan participants should submit a Commonwealth of Virginia 457 Deferred Compensation Plan Payroll Authorization Form: One-Time Deferral 80kb to their payroll office by November 12. Payroll offices may choose to extend this deadline as long as the new deadline allows enough time to process the deferral. Employees must indicate on the form the amount they wish to defer or select to defer the entire amount. The Department of Accounts will provide deferral procedures for 403(b) participants in its Payroll Bulletin. FICA tax must be paid on the amount that is contributed, and the annual maximum deferral amounts continue to apply. Since this is a one-time contribution included in employees’ regular paychecks, the deferral amount they enter on the form is in addition to their regular deferrals each pay period.
State employees who are not participating in the 457 Plan should enroll before November 1 to take advantage of this opportunity. They can enroll by:
- Submitting the Enrollment Form 94kb and Beneficiary Form 239kb (the mailing address is on the forms); or
- Calling toll free 1-VRS-DCPLAN1 (1-877-327-5261).
Employees covered under an optional retirement plan (ORP) may not contribute the bonus to their ORP account. Employees who contribute the bonus to the 457 Plan or a 403(b) plan will not receive an employer cash match on the bonus.
COV Voluntary Group Long Term Care Program Fall Enrollment Begins October 18 for Schools and Political Subdivisions
Employees of school divisions and political subdivisions that elected to participate in the Commonwealth of Virginia (COV) Voluntary Group Long Term Care Insurance Program before July 16 can enroll during a fall enrollment period scheduled for October 18 to December 10. If you did not participate in the spring enrollment period, your active employees under age 80 can enroll without medical underwriting during this period. They also can enroll their spouses under age 66 with limited underwriting.
Celebrate National Save for Retirement Week in October
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) plan or government 457 plan you offer.
myVRS Retirement Planner
The myVRS Retirement Planner allows your employees to anticipate their future retirement income needs and track their savings progress. If they participate in the 457 and Cash Match Plans, they can look up their account balance to see whether they need to increase their contributions. Even an increase of as little as $10 per pay period could have a big impact on their future plan balance. If they have an Individual Retirement Account (IRA) or participate in another savings plan, they can include these figures to get a complete picture of their retirement savings progress.
Other Online Resources
- You can find more information and marketing materials at National Save for Retirement Week or the National Association of Government Defined Contribution Administrators, Inc.
- The American Association of Retired Persons and the American Savings Education Council offer saving and financial planning tips.
- Employees with low to moderate incomes may qualify for the federal Savers Credit when they file their income tax returns. Refer employees to IRS Publication 4703 6,225kb for more information.
- The Social Security Administration website provides a Social Security benefit calculator.
September is Life Insurance Awareness Month
This month is a great time to remind your employees of the importance of life insurance protection. If you participate in the VRS Group Life Insurance Program, your employees are automatically covered under the Basic Group Life Insurance Program upon employment. As their families grow, they can purchase additional coverage for themselves as well as their spouses and dependent children through the Optional Group Life Insurance Program. According to the Life and Health Insurance Foundation for Education (LIFE), there is a gap between the life insurance coverage most Americans have in place and their actual need. LIFE has created a marketing toolkit you can use to communicate this important message to your employees. You can find that and more information at Life Insurance Awareness Month.
Register for a Deferred Compensation Plan USERRA Webinar
The following employer webinar will provide an overview of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) and its impact on participants in the 457 Plan. Two sessions will be available:
|September 28||2:30 - 3:30 p.m.||Register|
|October 22||9:30 - 10:30 a.m.||Register|
Your Turn to Ask
Q: If an employee covered under the VRS Plan 2 dies in service, is the beneficiary eligible for any employer contributions paid to the member contribution account?
A:If an employee dies in service, his or her named beneficiary will be eligible for a lump-sum payment of the balance of the member contribution account, if any, including any employer contributions in the account. It does not matter whether the employee is in Plan 1 or Plan 2 or vested at the time of death. If the named beneficiary is the employee’s spouse, minor child or parent, he or she may elect the lump-sum payment or a 100 percent monthly survivor benefit. See Designating a Beneficiary and Death-in-Service Benefits.
Have a question?
E-mail the editor. If your question has broad appeal, it could be featured in a future edition of Employer Update.
Important note: Do not send a question regarding an individual employee or the employee’s confidential or personal information, such as a Social Security number, to the editor. For assistance with a specific case, call VRS toll free at 1-888-VARETIR (1-888-827-3847) to speak with an Employer Advisor (select menu option 3) or contact your Employer Representative.