Workforce Transition Act (State Employees)

If you are involuntarily separated from employment, you may be eligible for the Workforce Transition Act (WTA) cash severance benefit.* This benefit includes severance payments and continued state contributions toward health insurance premiums and group life insurance premiums for up to 12 months from your layoff date. At the end of 12 months, you have several options regarding your insurance coverage.

If you meet eligibility requirements under WTA, you may convert the value of your WTA cash severance benefit to WTA additional retirement credit used to calculate your retirement benefit. See Retiring Under WTA for further information.

Severance policies and information are available at the Department of Human Resource Management (DHRM).

Purchase of Prior Service

If you have eligible prior service, you may be able to purchase this service before you leave employment or retire under WTA. You must be an active member to purchase prior service.

Already Purchasing Service?

If you are purchasing prior service through a salary-reduction agreement, your agreement will end when you leave employment or retire under WTA:

• If you are purchasing service through after-tax payroll deduction, you may purchase any remaining service on your agreement in a lump sum.
• If you are purchasing service through pretax salary reduction, your agreement will cease when you leave employment or retire under WTA. You may purchase any service remaining on your agreement by claiming a hardship as provided in the Internal Revenue Code. The hardship provision allows you to purchase your remaining service in a lump sum with after-tax funds or to suspend your agreement if you plan to return to a VRS-covered position.
• To claim a hardship:
  • Write a letter to VRS indicating your intent to purchase your remaining service in a lump sum or requesting that your agreement be suspended.
  • Enclose a copy of a completed Employer Certification of Involuntary Separation Under Workforce Transition Act (VRS-11) or a letter from your employer certifying your involuntary separation under WTA.
  • Send the letter with the enclosure to VRS at P.O. Box 2500, Richmond, VA 23218-2500. You will receive a letter at your mailing address verifying your election.

Health Insurance

If you are eligible for the WTA cash severance benefit, see DHRM for more information about the continuation of your health insurance coverage. To apply, submit the State Health Benefits Program Enrollment Form for Retirees, Survivors and LTD Participants with your retirement application.

Retiree Health Insurance Credit

If you retire under WTA with at least 15 years of service credit, you may be eligible for the health insurance credit. The WTA retirement credit that is applied toward service credit can count toward service needed to qualify for the health insurance credit.

Group Life Insurance

WTA Cash Severance Benefit – No Retirement

Coverage under the Basic Group Life Insurance Program continues for 12 months following your layoff date. If you are enrolled in the Optional Group Life Insurance Program, your coverage ends when you leave covered employment. If you die within 31 days of the last day of the month in which you leave covered employment, your beneficiary will receive your optional life insurance natural death benefit. Learn more about Group Life Insurance coverage.

If you are not eligible for a retirement benefit when you leave covered employment, you may convert your basic group life insurance coverage to an individual whole-life policy.

If you are covered under optional group life insurance, you may convert your coverage whether or not you are eligible for a retirement benefit.

To convert life insurance coverage, submit the Conversion of Group Life Insurance Enrollment (VRS-35E) within 31 days of the last day of the month in which you leave covered employment. This option is not available after 31 days.

Retirement under WTA

Your basic group life insurance coverage will continue into retirement. If you are covered under optional group life insurance, you may continue a portion of your coverage into retirement provided you, your spouse and/or your dependent children were covered during the 60 months preceding your retirement date. Learn more about Basic Group Life Insurance, Optional Group Life Insurance and Insurance in Retirement.

Virginia Sickness and Disability Program (VSDP)

Short-Term Disability

If you participate in the Virginia Sickness and Disability Program (VSDP) and are involuntarily separated from employment while you are on short-term disability, you are eligible for WTA transitional severance benefits. These benefits are not available to VSDP participants on long-term disability.

Long-Term Care

If you participate in VSDP, you are covered under the VSDP Long-Term Care Plan at no cost to you while you are actively employed. Your coverage will end after the 12-month severance period if you have elected the severance payments, or when you retire if you have elected the retirement credits in lieu of the severance payments under WTA. You may elect to continue your coverage. You will be responsible for paying the premiums. You have 60 days from the end of your severance period or retirement date to make this election. This option is not available after 60 days.

For more information, contact illumifin Corp. at 1-800-761-4057.

457 Deferred Compensation and 401(a) Cash Match Plans

If you participate in the Commonwealth of Virginia 457 Deferred Compensation and Virginia Cash Match Plans, you have the following options at the time of layoff:

• You may keep your funds in the Commonwealth's 457 Plan and Cash Match Plan. You continue to manage your investments. You cannot contribute to your plan unless you return to salaried or wage employment with an employer that offers the plan.
• You may request a rollover of your Commonwealth 457 Plan funds to the Virginia Cash Match Plan, an Individual Retirement Account (IRA) or other qualified retirement or tax-deferred savings plan.
• You may request your funds in a lump sum or as a periodic payment. You will be required to pay federal income taxes and state income taxes if you live in a state that taxes income.
• If you receive a payment before age 59½, there is no penalty for early withdrawal of funds from the Commonwealth's 457 Plan. The Internal Revenue Service (IRS) may impose an additional 10% federal tax penalty for early withdrawal of funds from the cash match plan.

Note If you are electing the WTA cash severance benefit, you may not roll over your severance to the Commonwealth's 457 Plan.

If you are a Hybrid Retirement Plan member and separate from employment, you can take a refund of your defined benefit member contribution account and/or take a distribution from the defined contribution component. You may also choose to leave your retirement funds in the Hybrid Retirement Plan. For more information, see your human resource office.

You may be eligible to retire under WTA if you meet the following criteria:

• A state employee covered under VRS, VaLORS or SPORS
• Vested
• Age 50* or older if you are in Plan 1, or age 60 or older if you are in Plan 2 or the Hybrid Retirement Plan

You can choose from the following options:

• WTA cash severance benefit and retirement in lieu of the WTA additional retirement credit.
• or
• WTA additional retirement credit in lieu of the cash severance benefit.

Plan 1 members between 50 and 55 years of age who choose the WTA additional retirement credit must be at least age 55 with five or more years of creditable service, or at least age 50 with 10 or more years of creditable service, once the credit is added.

If you participate in an optional retirement plan, or separate from service but defer your retirement, or retire on disability, you are not eligible for the WTA additional retirement credit. However, you are eligible for the cash severance benefit.

WTA Cash Severance Benefit and Retirement in Lieu of the WTA Additional Retirement Credit

If you qualify for unreduced or reduced retirement at the time of your layoff, you may elect to take the WTA cash severance benefit and retire from covered employment in lieu of the WTA additional retirement credit. You will be covered for health and life insurance for up to 12 months from your layoff date.

You may retire at any time after your layoff date. To retain your eligibility for state retiree health insurance coverage, you must apply for retirement within 12 months of your layoff date.

When you retire, your life insurance coverage will change to retiree coverage.

WTA Retirement Credit in Lieu of the Cash Severance Benefit

If you choose WTA retirement credit, the total value of your WTA severance payments, health insurance and group life insurance will be converted to credit toward your eligibility for an unreduced or reduced retirement benefit. If the addition of the WTA retirement credit does not qualify you for retirement, you will be eligible for the WTA cash severance benefit only and no retirement.

Retirement Eligibility Requirements

• Plan 1 Members
• Plan 2 Members
• Hybrid Retirement Plan Members

Note If you were not working in a covered position on June 30 and July 1, 2002, you must be credited with at least five years of service credit while covered under SPORS, VaLORS or an eligible local hazardous duty position to retire under these enhanced provisions.

Cost-of-Living Adjustment (COLA)

You are eligible for a COLA effective July 1 following one full calendar year (January 1–December 31) from the effective date of your service retirement.

Applying for WTA Retirement

Your employer will complete the Employer Certification of Involuntary Separation Under Workforce Transition Act (VRS–11) and submit it to VRS with your Application for Service Retirement (VRS–5) and other forms and documents required to apply for retirement.

Working after Retirement

If you choose to work after retirement.

• You may work for an employer that does not participate in VRS and continue to receive your retirement benefits.
• If you return to VRS–covered employment or a position covered under an optional retirement plan, your retirement benefits will end and you will be considered an active member.
• You will not be eligible to retire under WTA a second time, unless you are again involuntarily separated from state employment.