Transitional Benefits Program

If you are involuntarily separated from employment, you are eligible to receive a transitional severance benefit. The severance benefit amount is based on your consecutive years of service with your employer as follows:

• Two years or less of consecutive service = Four weeks of salary
• Three to nine years of consecutive service = Four weeks of salary plus one additional week for every year over two years
• 10-14 years of consecutive service = 12 weeks of salary plus two additional weeks for every year over nine years
• 15 years or more of consecutive service = Two weeks of salary for every year of service, not to exceed 36 weeks of salary

Service credit with other employers cannot be used in calculating the severance benefit. If you are eligible for a retirement benefit at the time of your layoff, you may elect to receive the severance benefit instead of the enhanced retirement credit, in addition to a retirement benefit (see Enhanced Retirement).

Health Insurance

If you elect a severance benefit, your employer will continue to pay your health insurance premiums for up to 12 months. Contact your employer before the end of your 12-month period to discuss your health insurance options once the severance benefit ends.

Group Life Insurance

If you are covered under the VRS Group Life Insurance Program, your employer will submit the Employer Certification of VRS Basic Group Life Insurance Coverage Under the Transitional Benefits Program (VRS-11C) to VRS. Note that:

• Any VRS optional group life insurance coverage will end and can be converted within 31 days of your layoff date.
• If you do not meet retirement eligibility at the time of termination from employment, you have the option to convert your group life insurance coverage to an individual whole-life policy by submitting the Conversion of Group Life Insurance Enrollment (VRS-35E) to Securian Financial within 31 days after the severance benefit ends. This option is not available after 31 days. If you die within 31 days after the severance benefit ends, your beneficiary will receive the natural death benefit.
• If you choose to receive the severance benefit, retire and are covered under the VRS Group Life Insurance Program, some basic group life insurance benefits will continue into retirement. You also may be eligible to continue all or a portion of your optional life insurance coverage, if applicable. Read more about Insurance in Retirement.

If you are covered under an employer-administered group life insurance plan, your coverage will continue for 12 months following your layoff date.

Forfeiture of Severance Benefits

If you are receiving the severance benefit and return to work with your previous employer in the same or a similar position or as an independent contractor performing the same or similar duties, your severance benefit will stop.

If you are at least age 50 and vested at your layoff date, you may be eligible for enhanced retirement under the Transitional Benefits Program. You may elect one of the following:

• Enhanced retirement credit, which will be applied to your age, service credit or both to enhance your retirement benefit;
• Transitional severance benefit without the enhanced retirement credit, in addition to your retirement benefit;
• Transitional severance benefit with deferred retirement; or
• Transitional severance benefit without retirement.

If additional credit does not bring you to retirement eligibility, you are eligible only for the transitional severance benefit. You cannot defer your retirement or retire on disability with an enhanced retirement. If you are eligible for an unreduced retirement benefit and choose to receive an enhanced retirement, you are eligible for additional service credit only. No credits will be applied to your age.

Enhanced Retirement Credit Calculation

The enhanced retirement credit is calculated using your salary, years of consecutive service rounded up to a whole year and the employer’s portion of health insurance and life insurance premiums.

Cost of Living Adjustment (COLA)

You are eligible for a COLA effective July 1 following one full calendar year (January 1 to December 31) from the effective date of your disability retirement. Read more about the COLA.

Health Insurance Credit and Hazardous Duty Supplement

• If you elect the enhanced retirement credit, the portion of the enhanced credit applied to your service credit, if applicable, will count toward the health insurance credit. You must retire with at least 15 years of service credit to be eligible for the health insurance credit.
• If you elect the enhanced retirement credit and are covered under SPORS, VaLORS or enhanced benefits for political subdivision employees in a hazardous duty position, the portion of the enhanced credit applied to your service credit, if applicable, will count toward eligibility for the hazardous duty supplement.

Life Insurance

Some basic group life insurance benefits continue into retirement if you retire under the program and are covered under the VRS Group Life Insurance Program. You also may be eligible to continue some or all of your optional life insurance coverage, as applicable. Read more about Insurance in Retirement.

Forfeiture of Benefits

If you retire with the enhanced retirement benefit and return to covered employment with any VRS-participating employer in any capacity, you will forfeit the enhanced retirement credit when you retire again.

Employees may elect the Basic Benefit or Survivor Option, and if they meet eligibility requirements, the Partial Lump-Sum Option Payment (PLOP) or the Advance Pension Option. The benefit payout option is irrevocable, which means the employee cannot change it, except for the Survivor Option under some conditions. Read more about benefit payout options.

Complete and submit the required service retirement forms, including the Application for Service Retirement (VRS-5), to your employer. Your employer will certify the application and complete the Employer Certification of Involuntary Separation Under the Transitional Benefits Program (VRS-11B).

Be sure to submit the application to your employer, not to VRS. VRS requires employer certification of the application and the enhanced retirement credit calculation to process the application.

The effective date of retirement is the first of the month following the month you are laid off.

If you are retiring under the Transitional Benefits Program and purchasing prior service, you must complete your purchase for the prior service credit to count toward your retirement benefit calculation. If you are purchasing service through a payroll contract, you have the following options:

• You can forfeit the remaining service.
• If you are purchasing service through an after-tax payroll deduction contract, you can purchase the remaining service in a lump sum before retirement. Send a letter indicating your intent to purchase the remaining service and your last day of employment to VRS at P.O. Box 2500, Richmond, VA 23218-2500. You will receive a cost letter from VRS with instructions about submitting payment.
• If you are purchasing service through a pretax salary reduction contract, you may be eligible to claim a hardship and purchase the remaining service in a lump sum with after-tax funds or suspend the contract, as provided under the Internal Revenue Code. To claim a hardship, send a letter to VRS indicating your intent to purchase the remaining service in a lump sum or request that the contract be suspended. Enclose a completed and signed Employer Certification of Involuntary Separation Under the Transitional Benefits Program (VRS-11B) certifying the involuntary separation with your letter.

If you participate in the Commonwealth of Virginia 457 Deferred Compensation and Cash Match Plans, you have these options:

• You may keep your funds in the 457 Plan and continue to manage your investments. You cannot contribute to the plan unless you return to salaried or wage employment with an employer that offers the plan.
• If you have a Virginia Cash Match Plan account, you may request a rollover of your 457 Plan funds to your cash match account, an Individual Retirement Account (IRA) or another qualified retirement or tax-deferred savings plan.
• You may request a payment of your 457 plan funds and any cash match funds by electing a lump sum, a periodic payment or a combination of these distribution methods. Funds paid directly to you are subject to federal and state income taxes. Cash match funds also may be subject to a 10% federal tax penalty if you withdraw them before age 59½. Payments from the 457 Plan are not subject to this tax penalty.
• If you receive a payment for unused sick leave or annual leave at your layoff date, you can roll over this payment to your 457 Plan account. This is allowed only if you provide your employer with a properly completed Payroll Authorization - One-Time Deferral form before your last day of employment. The form must be submitted to your employer no later than the month prior to the month in which the contribution will be sent to the plan.

As provided under the Internal Revenue Code, participants cannot contribute cash severance payments to the 457 Plan. For more information, go to Defined Contribution Plans.