Announcements
New COLA Effective July 1
Eligible retirees in Plan 1 will receive a 3.85% cost-of-living adjustment (COLA) to their benefit amount, and eligible Plan 2 and Hybrid Retirement Plan retirees will receive a 3.0% COLA to their benefit amounts. The increase takes effect July 1 and will be included in the August 1 benefit payment for eligible retirees.
The COLA is based on the annual monthly average of the Consumer Price Index for all Urban Consumers (CPI-U), published by the U.S. Bureau of Labor Statistics, and is updated each July 1. During years of no inflation or deflation, the COLA will be 0%.
This year marks the largest VRS COLA since 1991. The Code of Virginia caps the annual COLA at a 3% maximum for Plan 2 and Hybrid Retirement Plan members, or a 5% maximum for Plan 1 members.
If you retired under the Basic Benefit or Advance Pension Option, the COLA calculation is based on your Basic Benefit amount. If you retired under the Basic Benefit with the Partial Lump-Sum Option Payment (PLOP), Survivor Option or Survivor Option with the PLOP, the COLA calculation is based on your reduced benefit amount. See the Retiree Handbook available on the VRS Publications page for eligibility details.
Governor Appoints New Chair to VRS Board of Trustees
Gov. Glenn Youngkin recently announced his appointment of A. Scott Andrews to serve as chair of the Virginia Retirement System Board of Trustees. Andrews, of The Plains in Fauquier County, A. Scott Andrews is chairman and CEO of Northern Contours Inc., and a managing partner of Harvest Equity Investments.
View the entire VRS Board of Trustees.
VRS Leaders Schmitz and Faison to Retire
Chief Investment Officer Ronald S. Schmitz will retire December 31. Schmitz joined VRS as CIO in October 2011, and before that served as the chief investment officer for the Oregon Public Employees Retirement System. During Schmitz’s tenure, the VRS Trust Fund almost doubled in size, moving from $54.6 billion at the conclusion of fiscal year 2011 to $101.8 billion, as of June 30, 2021. Schmitz and the incoming CIO will work in tandem for a period to ensure continuity of the program before Schmitz retires at the end of the year.
Chief Financial Officer Barry C. Faison, whose career with VRS began in 1979, also will retire December 31. Faison has served in his current position since 2001. Under his leadership, VRS has received an Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada for 39 consecutive years, and an Award for Outstanding Achievement for its Popular Annual Financial Report since its inception five years ago. Faison was also instrumental in the development of myVRS Navigator, VRS’ record-keeping and accounting system.
VRS Board Appoints Junkin as Chief Investment Officer
The VRS Board of Trustees has appointed Andrew H. Junkin as chief investment officer.
Junkin will begin serving as VRS’ CIO in September. He comes to VRS from his position as CIO for Rhode Island, where he oversaw the state’s $10.5 billion pension plan, a $2 billion defined contribution plan and other funds.
Previously, he was with Wilshire Consulting for 15 years, serving as president for five years. Check out the full press release.
Retirees Can Access Securian Through myVRS
Retirees who elected to continue optional group life insurance coverage into retirement can now use myVRS to access and manage coverage with Securian Financial, the insurer for the VRS Group Life Insurance Program. Log in to your myVRS account, select Life Insurance under the My History tab and select the Visit Securian button. You may view, reduce or cancel your coverage.
The value of your VRS optional life insurance reduces by 25% beginning with your normal retirement age under your plan, with additional reductions occurring at ages 70 and 75. All optional life insurance coverage ends at age 80.
Considerations Before Returning to Work
If you’re considering working after retirement, make sure you know how it will affect your monthly retirement benefit. You can work for any employer that does not participate in the Virginia Retirement System, such as a nonprofit organization or private company, and continue to receive your monthly retirement benefit.
However, if you’re considering returning to work with your former employer, or for a different VRS-participating employer, there are a number of things you should consider to ensure you continue receiving your monthly retirement benefit. Be sure to check out the online course VRS developed explaining return-to-work rules. Go to the Retirees page and select Working After Retirement.
The course explains different scenarios under which you may return to work for VRS-participating employers and continue to receive your monthly benefit, including working part-time in a non-covered position, filling an interim position or performing contract work, among others. Learn how various return-to-work situations impact your benefits and how best to navigate your options.
If you want to work after you retire, call VRS at 888-827-3847 to determine the effect of accepting covered or non-covered employment on your retirement benefits. Also contact the Social Security Administration (SSA) toll-free at 800-772-1213 or visit the SSA website for information on the effect of earnings during retirement on your eligibility for Social Security benefits.
Updates to Tax-Withholding Formula Results in Form Changes
The IRS has changed the formula to calculate federal tax withholdings to your retirement benefit. No action is required unless you need to change your tax withholdings in the future.
Starting in July, if you need to make a change to your federal taxes, you’ll be asked to specify annual tax withholdings in dollar amounts instead of choosing the number of withholding allowances. Follow the instructions on the form. You’ll also report total income, in addition to your VRS pension. The steps for state tax withholding are unchanged.
The easiest way to update your tax-withholding is to log in to your myVRS account. The Request for Income Tax Withholding (VRS-15) form is also available here.
