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Retirement Program

All full-time and part-time salaried University Staff Operational & Administrative employees must participate in the Virginia Retirement System (VRS). Part-time employees are defined as those who work at least 20 hours, but less than 32 hours per week.

All full-time and part-time salaried University Staff Managerial & Professional, Executive & Sr. Administrative and Faculty employees must participate in either the Optional Retirement Plan (ORP) or the Virginia Retirement System (VRS). The retirement program selected affects the AD&D, disability and life insurance benefits, so careful consideration should be given to this decision. Once a retirement program is elected, the decision is irreversible.

Optional Retirement Plan (ORP)

The ORP is a "defined contribution" plan in which retirement benefits are based on employer contributions plus earnings of the account balance over the course of the participant's working years. In a defined contribution plan, the value of the retirement benefits may change, depending on investment gains or losses.

State legislation passed on March 15, 2010, has created two plans for ORP members. House Bill 1189 and Senate Bill 232 are referred to as Plan 2 and the current provisions as Plan 1. All current U.Va. employees in the ORP are in Plan 1 and this legislation does not affect them.

New employees with written employment contracts executed before March 15, 2010, are in Plan 1. Employees whose contracts are executed between March 16 and June 30 and begin employment before July 1, 2010 will be in Plan 1. Employees whose contracts are executed between March 16 and June 30, 2010 and start work on or after July 1, 2010 will be in Plan 2. Employees whose contracts are executed after July 1, 2010, and forward, are in Plan 2 regardless of start date.

This legislation also affects “rehired” members. Rehired members are those who take a refund of the funds in their member contribution account or optional retirement plan account from a previous position and return to covered employment with no service credit.

Optional Retirement Plan (ORP) Plan Summary
Effective July 1, 2010ORP Plan 1 (Members Hired Before July 1, 2010 who have not taken a refund)ORP Plan 2 (Members Hired or Rehired On or After July 1, 2010)
ORP Contribution Rates10.4 percent employer contributionEstablishes an 8.9 percent employer contribution for ORP members. ORP employees also are required to make a 5 percent member contribution.

Summary of 2010 Legislative Changes Affecting Retirement (compiled by VRS)

Participants may invest employer contributions in one of the following companies: TIAA-CREF or Fidelity Investments. Employees have 60 days from their date of hire to elect a retirement program. Changes in vendor selection may be made at any time of year, up to three times per year. NOTE: If no program is selected during the 60 days, state policy requires members to be enrolled in VRS.

Note: Due to the Fall 2011 retirement program enhancement and investment line up changes, Vanguard funds will be available within the Fidelity platform beginning the week of October 23, 2011.

How to Enroll in the ORP

Virginia Retirement System (VRS)

The Commonwealth of Virginia requires all full-time and part-time(benefit eligible, greater than 20 hours) State employees to participate in VRS, unless they are eligible and participate in the ORP. VRS is a "defined benefit" plan that provides benefits based on years of service, age, and average annual salary.

State legislation passed on March 15, 2010, has created two plans for VRS members. House Bill 1189 and Senate Bill 232 are referred to as Plan 2 and the current provisions as Plan 1. All current U.Va. employees in the VRS are in Plan 1 and this legislation does not affect them.

New employees with written employment contracts executed before March 15, 2010, are in Plan 1. Employees whose contracts are executed between March 16 and June 30 and begin employment before July 1, 2010 will be in Plan 1. Employees whose contracts are executed between March 16 and June 30, 2010 and start work on or after July 1, 2010 will be in Plan 2. Employees whose contracts are executed after July 1, 2010, and forward, are in Plan 2 regardless of start date.

This legislation also affects “rehired” members. Rehired members are those who take a refund of the funds in their member contribution account or optional retirement plan account from a previous position and return to covered employment with no service credit.

Virginia Retirement System (VRS) Plan Summary
Effective July 1, 2010VRS Plan 1 (Members Hired Before July 1, 2010 who have not taken a refund)VRS Plan 2 (Members Hired or Rehired On or After July 1, 2010)
Average final compensationAverage of the employee’s 36 highest consecutive months of creditable compensationAverage of the employee’s 60 highest consecutive months of creditable compensation
5 percent member contributionState employees contribute the 5 percent member contribution.State employees contribute the 5 percent member contribution.
Normal retirement ageVRS: Age 65


VaLORS (Law Enforcement) Hazardous Duty Members: Age 60		VRS: Normal Social Security retirement age

Same
Earliest unreduced retirement eligibilityVRS: Age 65 with at least five years of service credit or age 50 with at least 30 years of service credit



VaLORS (Law Enforcement) Hazardous Duty Members: Age 60 with at least five years of service credit or age 50 with at least 25 years of service credit		VRS: Normal Social Security retirement age with at least five years of service credit or age 60 with age and service equaling 90 (e.g., age 60 with at least 30 years of service credit)


Same
Earliest reduced retirement eligibilityVRS: Age 55 with at least five years of service credit or age 50 with at least 10 years of service credit

VaLORS (Law Enforcement) Hazardous Duty Members: Age 50 with at least five years of service credit		VRS: Age 60 with at least five years of service credit



Same
Cost-of-Living Adjustment (COLA) (effective July 1 following the first full calendar year after retirement)Matches first 3 percent increase in the Consumer Price Index-Urban and one-half of the remaining increase up to a maximum of 5 percent, when providedMatches first 2 percent increase in the Consumer Price Index-Urban and one-half of the remaining increase up to a maximum of 6 percent, when provided

Summary of 2010 Legislative Changes Affecting Retirement (compiled by VRS)

To contact VRS call toll free (888) 827.3847 or visit their website. Please Note: An individual may not receive a retirement annuity from the Virginia Retirement System (VRS) or one of the Optional Retirement Plans while the University of Virginia is making contributions to a regular retirement program. An individual who is receiving a retirement annuity from an account to which any Commonwealth of Virginia agency contributed should contact the UHR Benefits Division.

Retirement Program Summary Information

ORP
ORP Plan Summary

ORP Plan Document

ORP Fund Performance Information

ORP Vendor Links

VRS
VRS Website

VRS Customer Service - 1.888.827.3847

VRS Handbook for Members