Employer Update

Summer is a busy time, with fiscal year-end reporting activities and the implementation of new fiscal-year changes in employer contribution rates and retiree COLAs. Here’s a list of key changes to keep you on track:

1. Stay on top of fiscal year-end and year-beginning tasks: The Fiscal Year-End Reminders webpage provides detailed information on tasks employers perform in myVRS Navigator during the summer. The page organizes reminders based on the month in which employers must take certain actions. For instance, July kicks off the automatic renewal process for covered contract employees. Also, look for an alert in myVRS Navigator for when VRS’ fiscal year-end processing is complete and you can confirm your July snapshot.
    
2. Updates to handbooks and websites: VRS made several updates to member handbooks and websites, as is typical for July 1. If you have printed handbooks and guides on hand, they are out of date. Please recycle them and refer to the publications section of the VRS website for July 2022 editions. You may order printed copies of the Hybrid Retirement Plan Handbook for Members. Other handbooks and guides are available on the VRS website for employees to view or download.
    
3. New employer contribution rates: The 2023-2024 state budget holds employer contribution rates for state employees and teachers at levels established in the budget for the previous biennium, and increases the contribution rates for the State Police Officers’ Retirement System (SPORS), the Virginia Law Officers’ Retirement System (VaLORS) and the Judicial Retirement System (JRS). The 2023-24 budget also holds contribution rates for most other post-employment benefits at current levels (the Virginia Local Disability Program rate for political subdivision employees increased slightly). Employer contribution rates for non-professional school board and political subdivision plans, including the Virginia Local Disability Program (VLDP) and health insurance credit for political subdivisions, which the VRS Board of Trustees certified last fall, also took effect July 1.
    
4. Retiree COLAs: Eligible retirees in Plan 1 will receive a 3.85% cost-of-living adjustment (COLA) to their benefit amount beginning with their August 1 payments. Plan 2 and Hybrid Retirement Plan retirees will receive 3.0%. This year marks the largest VRS COLA since 1991. The Code of Virginia caps the annual COLA at 3% maximum for Plan 2 and hybrid plan members, and a 5% maximum for Plan 1 members.
    
5. Group life insurance program minimum benefit increases for 30-year retirees: The minimum group life insurance benefit for members retired with at least 30 years of service increased by the same COLA applicable to VRS Plan 2 members (3.0%), effective July 1, 2022. The new minimum life insurance payout is $8,984.
    
6. Optional group life insurance program expands coverage maximum: Members may now apply for optional group life insurance coverage up to eight times their annual salary, a twofold increase. The maximum coverage amount remains unchanged at $800,000 (for individuals) and $400,000 (for spouses). Stay tuned for a special enrollment opportunity coming this fall.