Employer Update

The following cost-of-living adjustments (COLAs) for fiscal year 2023 take effect July 1 for eligible retirees in Plan 1, Plan 2 or the Hybrid Retirement Plan (defined benefit component on

• Plan 1: 3.85%
• Plan 2 and Hybrid Retirement Plan: 3.00%

If retirees are eligible for a COLA, the increase applies to benefit payments deposited on August 1. The VRS COLA is calculated annually per statute.

In addition, eligible members on long-term disability (LTD) will see an increase in creditable compensation used to calculate pension benefits:

• 4.00%: Plan 1, Plan 2 and Hybrid Retirement Plan members who have received long-term disability benefits for one year under the Virginia Sickness and Disability Program (VSDP).
• 3.74%: Hybrid Retirement Plan members who have received long-term disability benefits for at least one year under the Virginia Local Disability Program (VLDP). *

Eligible VSDP members who have been in receipt of an LTD benefit for at least one year will also receive a July 1 COLA on their LTD benefit:

• Plan 1: 3.85%
• Plan 2 and Hybrid Retirement Plan: 3.00%

The VLDP plan does not provide a COLA on long-term disability benefits.

* Corrected from the March issue of Employer Update. VLDP only covers Hybrid Retirement Plan members.