How is a State employee's health insurance handled after retirement?

Generally, a retired State employee may enroll in the State's group health insurance plan within 31 days of terminating employment, provided that retirement is not deferred. The entire amount of the premium must be paid by the retiree. However, if the member has at least 15 years of total service, she is eligible to receive a monthly credit of $4 for each year of service, up to a maximum of $120, not to exceed the cost of her health insurance premium. The credit is payable to retirees enrolled in the State's group health insurance plan or any other health insurance plan.

For related information, see Retiree Health Insurance Credit.

Is a retired public school teacher eligible to receive a VRS health insurance credit?

Eligible retired teachers and other professional school employees can receive a monthly health credit to be used towards the cost of their individual health insurance premiums. To receive the health insurance credit, eligible employees of local public school boards must have at least 15 years of VRS service and participate in a qualified health insurance plan.

The monthly amount of the credit is $2.50 per year of service, not to exceed $75 per month or the amount of the retiree's health insurance premium for single coverage. In addition, local school divisions can, at their own option and expense, provide an additional health insurance credit of $1 per year of service for eligible retirees with a maximum of $30 per month. When added to the basic credit, the total amount of the credit may not exceed the retiree's cost of individual coverage.

For related information, see Retiree Health Insurance Credit.

How does the deferred compensation plan work?

A State employee may elect to contribute, on a pre-tax basis, up to 50 percent of her taxable compensation (or $11,000, whichever is less) to the deferred compensation program administered by VRS. The amount contributed is invested by professional investment managers, and a range of investment options are available. The amount contributed, along with the investment earnings, accumulates on a tax-deferred basis until the amounts are distributed, generally after retirement.

In addition, an employer match for the deferred compensation program was approved by the 1999 General Assembly. Employees participating in the program receive an employer contribution of up to a maximum of $20 or 50 percent of the participant's contribution to the program on a semi-monthly basis, whichever is less. However, the amount of the employer's contribution may be less based on available funding and employee participation rates.

Local governments that do not have deferred compensation plans may participate in the State's plan. Employers, at their discretion, can provide a match to the employees' contribution.

For related information, see Deferred Compensation Plan.

How can an employee find out more about VRS benefits and retirement planning?

A good source of information is the Pre-Retirement Education Program (PREP) offered throughout the year. Employers also have a series of videos on VRS-related topics, including information for new members, members terminating employment, and members planning for retirement.

In addition, the Handbook for Members provides a summary of the benefits available through VRS. The VRS newsletters, Memo to Members and Memo to Retirees, are additional resources that provide up-to-date information on recent benefit modifications and other changes at VRS.

Finally, VRS' website (http://www.varetire.org) is another very good source of timely information to members. Information available to members on VRS' Internet home page includes: recent legislation affecting VRS, recent benefit changes, VRS forms and publications, and information on activities at VRS.