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VA House Bill HB1189 - VRS Modifications

posted Feb 24, 2010, 1:50 PM by Alexander Romero
The house is presently discussing additional reforms to the VRS system. See HB 1189 for more info.

Virginia Retirement System; new employees. Modifies for new employees, all the defined benefit retirement plans administered by the Virginia Retirement System ("VRS"), as follows: (i) requires employees to contribute five percent of creditable compensation, and (ii) increases the number of months used to calculate average final compensation from 36 to 60, (iii) increases the cost, and decreases the time in which employees may purchase certain prior service credits, and (iv) reduces the portion of the increase in the Consumer Price Index used for determining annual retirement allowance supplements ("COLA") from three percent plus one-half percent of the additional increase up to seven percent, to two percent plus one-half percent of the additional increase up to ten percent. The bill also decreases the Commonwealth's contribution for employees in institutions of higher education participating in an optional retirement plans by 2.4 percent of creditable compensation.

In addition to these modifications, for new state and local employees covered under the main defined benefit plan, (i.e. excluding the separate plans for state and local law enforcement employees and judges), the bill changes the requirements for unreduced early retirement benefits from 50 years of age and 30 years of creditable service, to one whereby the sum of age plus years of service equals 90. The average final compensation multiplier for new state and local employees excluding law enforcement employees, and for new judges, is reduced from 1.70 percent to 1.65 percent. Finally, for new judges, the weighted years of service factor used in calculating years of creditable service is reduced from 2.5 to 2.

- Source:  http://leg1.state.va.us/cgi-bin/legp504.exe?101+sum+HB1189
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