Employer Update

What types of pay should be excluded from creditable compensation reported to VRS?

VRS uses creditable compensation (current annual base salary) and service credit to calculate retirement benefits. However, the following types of pay should be excluded from what you report to VRS:

• 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 Checklist

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