Employer Update

VRS uses creditable compensation and service credit to calculate retirement benefits. Creditable compensation is the member's current annual base salary excluding:

• Overtime.
• Extraordinary pay.
• Bonus pay.
• Housing and moving expenses.
• Mobile device and internet costs.
• Vehicle allowances.
• Termination pay for leave.
• Non-permanent shift differentials.
• Payments of a temporary nature including but not limited to acting pay (if not permanently confirmed for the position).
• Payments for extra duties, such as pay for teachers who serve as coaches.
• A member's election to defer salary to a deferred compensation plan, such as a 403(b), a 457(b) or a 125 plan, may only be included in creditable compensation if the member voluntarily elects the deferral, the deferral is not conditional or performance based, and the deferral would otherwise be included in the member's gross income.

Other exclusions apply. Consult the Creditable Compensation Job Aid and Checklistto guide you through different scenarios when reporting compensation to VRS. It lays out numerous examples specific to school divisions, political subdivisions, state agencies and higher education institutions. A yes/no checklist quickly helps you decide what amounts should not be included in an employee's current annual base salary you report to VRS. There's also model contract language to assist with developing contracts for executive-level positions.

Still have questions about creditable compensation inclusions or exclusions? Reach out to your employer representative.