Employer Update

The overall funded status for the 603 VRS-participating political subdivisions held steady this past fiscal year, according to a 2024 informational valuation presented to the VRS Board of Trustees at its November meeting.

Although not a contribution rate-setting year, the 2024 valuations prepared by VRS plan actuary Gabriel, Roeder, Smith & Company (GRS) show progress on funded status and provide insight into emerging trends in contribution rates.

FY 2024 Valuation Highlights

The aggregate funded status for all political subdivision plans rose to 89% as of June 30, up a percentage point from the previous year.

Key takeaways:

• The average funded status of plans with no enhanced hazardous duty coverage stands at 96%.
• For plans offering hazardous duty coverage, the average funded status is 87.2%
• Overall, 544 political subdivision plans (90%) have a funded status of 80% or greater.
• More than two-thirds of the plans (417) are funded at 90% or higher.
• More than a third (232 plans) are fully funded at 100% or more.

The valuation also showed the number of active members in political subdivision plans increased by 4.5% in FY 2024. Political subdivision employees’ average salaries increased by 5.7% during FY 2024.

View the full valuation presentation.

Other post-employment benefit plans: The actuary also presented valuations for the health insurance credit, group life insurance and the Virginia Local Disability Program (VLDP). These plans saw funded status increases in FY 2024. The state made additional FY 2024 contributions for the health insurance credit for constitutional officers and social services employees, which improved the funded status of both plans by 3.9% and 4.9%, respectively.

Line of Duty Act: The FY 2024 valuation for the Line of Duty Act (LODA) Fund showed a slight decrease in the number of active participants and a slight increase in the number of health care beneficiaries. By statute, LODA benefits are funded on a “pay-as-you-go” basis, covering the health care premiums for current beneficiaries, disability and death payments, as well as projected costs of any new claims. For a variety of reasons, such as health care inflation and lack of pre-funding, participating employers should expect to see annual LODA premium increases.

View the full LODA valuation presentaiton.

Looking Ahead

In early 2025, political subdivision employers will be able to download from myVRS Navigator their pension valuations, along with valuations for the health insurance credit and Virginia Local Disability Program (if applicable).

In case you missed it: See the November Employer Update to learn more about valuation trends pertaining to the five statewide retirement plans (state employees, teachers, state police, Virginia law officers and judges) and other post-employment benefit (OPEB) plans.