Glossary of Terms
You are an active member if you are working in a covered position with an employer that participates in the Virginia Retirement System (VRS) or you are covered under an optional retirement plan (ORP) administered by VRS. Covered employment is a full-time permanent, salaried position. Some part-time permanent, salaried state positions also are covered under VRS.
Active service is the number of years you work in a covered position. You earn one month of service credit for each month you are employed (in service).
Activities of Daily Living
You may need long-term care if you cannot perform at least two of the following activities of daily living: bathing; transferring, such as getting in and out of bed; dressing; toileting (using the bathroom);continence; or eating (ability to feed oneself).
Actuarial Equivalent Cost
Actuarial equivalent cost is how much money is needed in today's dollars to pay for the increase in your future retirement benefit or earlier retirement date resulting from purchasing prior service.
Actuarial Equivalent Rate
Actuarial equivalent rate represents the amount of money needed in today's dollars to pay for the increase in your future retirement benefit or earlier retirement eligibility date resulting from purchasing prior service. If you purchase prior service after your eligibility period, your cost will be based on this rate.
Approved Domestic Relations Order (ADRO)
If you divorce and your retirement benefit is part of a marital property settlement, VRS will receive a certified Approved Domestic Relations Order (ADRO) by the court directing it to make a payment of part of your benefit to your former spouse.
Average Final Compensation
Average final compensation is one of the factors used to calculate your retirement benefit. For Plan 1 members, it is the average of your 36 consecutive months of highest compensation as a covered employee. For Plan 2 members, it is the average of your 60 consecutive months of highest compensation as a covered employee.
Bona Fide Break in Service
A bona fide break in service is a break of at least one full calendar month from the effective date of retirement over a period the employee normally would work. Periods of leave with or without pay do not count toward satisfying this break in service. For retired teachers and faculty members, summer breaks, intersession periods, educational leave and sabbaticals also do not count toward satisfying this break.
Career State Service
Career state service includes full-time and part-time salaried state service and absences for military leave, layoffs, temporary workforce reductions or periods of reduced hours or job restrictions while on short-term or long-term disability-working.
A catastrophic condition means you are unable to perform at least two of the following activities of daily living without substantial assistance: bathing, transferring (getting in and out of bed), dressing, toileting (using the bathroom), continence and eating (ability to feed oneself). Your condition also may be considered catastrophic if you have a severe cognitive impairment, such as Alzheimer's disease, and require substantial supervision or are placed in a guardianship.
A cognitive disability is a loss or deterioration in intellectual capacity. An example is Alzheimer's disease.
Compensation is your salary reported to VRS by your employer. It does not include payments for overtime, temporary employment, extra duties or other additional payments.
Consumer Price Index-Urban (CPIU)
As defined by the U.S. Bureau of Labor Statistics, the Consumer Price Index-Urban measures the average change over time in the prices paid by urban consumers for goods and services such as food, housing, apparel, transportation, medical care, recreation, education, communication and other goods and services.
Covered employment is a full-time permanent, salaried position with an employer that participates in the Virginia Retirement System (VRS) or under an optional retirement plan (ORP) administered by VRS. Some part-time permanent, salaried state positions and non-adjunct faculty positions requiring at least 20 hours, but less than 40 hours a week, also are covered under VRS.
You are a deferred member if you have left covered employment but have not withdrawn your funds and have service credit in VRS or an account balance in a Virginia optional retirement plan.
Defined Benefit Plan
The retirement benefit amount is paid monthly and is based on age, service credit and average final compensation at retirement using a formula.
Defined Contribution Plan
The retirement benefit depends on the contributions provided to the plan and the investment performance of those contributions. At retirement, members may start receiving distributions from the balance in their account, reflecting the contributions, investment gains or losses, and any required fees.
Hazardous Duty Supplement
Hazardous duty employees who retire with at least 20 years of hazardous duty service credit may be eligible to receive a supplement to their retirement benefit. The supplement is a dollar amount added to the monthly benefit payment. It continues until normal Social Security retirement age for state police officers and political subdivision employees eligible for enhanced hazardous duty coverage. It continues until age 65 for Virginia law officers under the 1.7% retirement multiplier. Virginia law officers under the 2.0% multiplier are not eligible for the supplement.
Hybrid Retirement Plan
Contributions are made to both the defined benefit and defined contribution components of the retirement plan. At retirement, members receive a monthly benefit that is paid from the defined benefit component of the plan and are eligible to receive distributions from the defined contribution account.
Major Chronic Condition
A major chronic condition is a life-threatening health condition that exists over a prolonged period of time and is not expected to improve.
Minimum Guaranteed Benefit
If you qualify for primary Social Security benefits, the minimum guaranteed benefit will be equal to 33? percent of your average final compensation. You will receive the minimum guaranteed benefit or the full VRS formula amount, whichever is higher. If you do not qualify for primary Social Security benefits, the minimum guaranteed benefit will be equal to 50 percent of your average final compensation. You will receive the minimum guaranteed benefit or the full VRS formula amount, whichever is higher.
Non-covered employment is a part-time position with a VRS-participating employer. Non-covered positions do not provide eligibility for benefits. Part-time positions typically require less than 80 percent of the hours of comparable full-time permanent positions. Some full-time positions may be considered non-covered if they are temporary and require less than 80 percent of the hours per year that would be considered full-time and permanent for that position.
You are covered under the provisions of Plan 1 if your membership date is before July 1, 2010 and you were vested (you had at least five years of service credit) as of January 1, 2013. If you leave employment but do not take a refund of your member contributions and interest or are maintaining an account balance in an optional retirement plan authorized or administered by VRS, you will be considered a deferred member. If you return to covered employment, you will be rehired under Plan 1. If you are a deferred member but were not vested as of January 1, 2013, or if you took a refund of your member contributions or your full account balance in an optional retirement plan authorized or administered by VRS, you will be rehired under Plan 2 if you return to covered employment.
You are covered under the provisions of Plan 2 if your membership date is before July 1, 2010 and you were not vested (had less than five years of service credit) as of January 1, 2013, or your membership date is on or after July 1, 2010. If you were previously employed in a position covered under Plan 1 and took a refund of your member contributions and interest or withdrew your full account balance in an optional retirement plan authorized or administered by VRS, you will be rehired under Plan 2 if you return to covered employment.
You are a retiree if you are no longer employed in a covered position and are receiving a retirement benefit from VRS.
Under the VRS Plan 1, the retirement multiplier is 1.7 percent for service and disability retirement. Under the VRS Plan 2, the retirement multiplier is 1.65 percent for service retirement for service earned, purchased or granted on or after January 1, 2013. Service earned, purchased or granted before this date comes under the 1.7 percent multiplier. For disability retirement under the VRS Plan 2, the multiplier is 1.65 percent on all service, regardless of when it was earned, purchased or granted. Under SPORS, and for sheriffs and regional jail superintendents, the multiplier is 1.85 percent. Under VaLORS, the multiplier is 2.0 percent. For all other political subdivision hazardous duty employees, the retirement multiplier is 1.7 percent, unless the employer elected the 1.85 percent multiplier for these employees.
Service credit includes active service. You earn service credit for each month you are employed in a covered position. It also may include credit for prior service you may have purchased or additional service credit granted by your employer. Your total service credit is one of the factors used to determine your eligibility for retirement and calculate your retirement benefit. It also counts toward eligibility for the health insurance credit in retirement.
Transitional Retirement Credit
The number of years that can be used to enhance the member's VRS retirement benefit.
Transitional Severance Payment
The amount the member may receive as a severance benefit when not using the additional service credit toward a VRS retirement benefit.
You become vested in VRS when you have at least five years of service credit. Vesting is the minimum length of service needed to qualify for a future retirement benefit, if you meet the age and service requirements for your plan, or to receive any contributions made by your employer to your member contribution account after July 1, 2010 should you leave covered employment and request a refund.
VRS Refunded Service
Service represented by a refund of member contributions and interest is called refunded service. If you leave covered employment, take a refund and return to covered employment, you can purchase your refunded service and add it as credit toward your plan.