A COMPARISON OFVIRGINIA RETIREMENT PLANS

School Board MeetingDecember 12, 2014

Comparison of VRS Plans

Plan 1 Plan 2 Hybrid

Employees hired before July 1, 2010

Defined Benefit Plan

5% employee contribution

Employees hired on or after July 1, 2010

Defined Benefit Plan

5% employee contribution

Employees hired on or after January 1, 2014

Defined Benefit AND Defined Contribution Plan

Minimum 5% contribution(4% DB and 1% DC with option to increase DC Additional 4%)

Comparison of VRS Plans

Plan 1 Plan 2 Hybrid

Vested – 5 years

Age/Service – 50/30

Avg Final Compensation is highest 36 consecutive months

Vested – 5 years

Age/Service = 90(i.e. 60/30)

AFC is highest 60 consecutive months

Vested – 5 years

Age/Service = 90

AFC is highest 60 consecutive months

Comparison of VRS Plans

Plan 1 Plan 2 Hybrid

Retirement multiplier is 1.7%

Example:AFC $50,000Mult X .017Serv X 30Annual = $25,500 ÷ 12Monthly = $2,125

Retirement multiplier is 1.65%

Example:AFC $50,000Mult X .0165 Serv X 30Annual = $24,750 ÷ 12Monthly = $2,065

Retirement multiplier is 1.0%

Example:AFC $50,000Mult X .01Serv X 30Annual = $15,000 ÷ 12Monthly = $1,250 *DC will be added income

Comparison of VRS Plans

Plan 1 Plan 2 Hybrid

Eligible for Disability Retirement

Virginia Local Disability Plan - No

Eligible for Disability Retirement

VLDP - No

NOT eligible for Disability Retirement

VLDP – Yes (short term and long term)

Short Term Disability• Illness, injury, surgery, pregnancy or other chronic health conditions qualify

•Maximum coverage is 125 work days

•Employees receiving short term disability are still active employees and receive all benefits, including: SL, AL, Raises, Creditable Compensation toward retirement

• Benefit begins after seven calendar days of absence

Short term Disability payments Months of continuous Service

# Workdays of Income

Replacement at 100%

# Workdays of Income

Replacement at 80%

# Workdays of Income

Replacement at 60%

0 - 12 months* 0 0 0

13 - 59 months 0 0 125

60 - 119 months 25 25 75

120 - 179 months 25 50 50

180 - more months 25 75 25

*This is applicable to each VRS Employer. If the employee changes school divisions, the continuous service starts over.

Long Term Disability• Benefits begin after receiving 125 days of short term disability benefits (claim reviewed prior to end of 125 days)

• Benefit is 60% of pre-disability earnings OR 80% for catastrophic conditions (may be reduced by certain sources of “other income” earned while disabled such as WC, other insurance plans, social security)

Hybrid Retirement Opt-In

• All Plan 1 and 2 Employees may opt-in to the Hybrid Plan.

• Opt-In enrollment period is Jan. 1 – April 30, 2014

• Opt-In is irrevocable after July 1, 2014

• Retirement Benefit calculations based on both plans (i.e. 10 years under Plan 1 and 20 Hybrid years)