Virginia Retirement System
As part of your employment benefits, all Virginia Tech employees enrolled in the Virginia Retirement System contribute five percent of their salary to their VRS account. After completing five years of service, employees become vested, ensuring eligibility for service retirement. The calculation of your retirement income is based on the number of years of service in the retirement system, age at retirement, and the highest average of (three years for Plan 1/five years for Plan 2/five years for Hybrid Plan) salary.
The Plan Comparison Guide provides a quick look at some of the similarities and differences among Plan 1, Plan 2, and the Hybrid Retirement Plan.
Subscribe to the Virginia Retirement System's quarterly newsletter, VRS Member News, for updates on retirement plans and other important information from Virginia Retirement System.
Classified and university Staff
Regular and restricted, full-time and part-time salaried classified, and university staff are covered by the Virginia Retirement System. Virginia Tech police officers (who are staff) are covered by the Virginia Law Officers Retirement Association (VaLORS).
Faculty
Regular and restricted, full-time and part-time faculty have the choice between the Virginia Retirement System (VRS) and an Optional Retirement Plan (ORP). Virginia Tech police officers (who are faculty) may choose to be covered by the Virginia Law Officers Retirement Association (VaLORS). Faculty members have 60 days from their initial appointment date to make this decision.
Employees are covered by Plan 1 if they participated in a VRS or Optional Retirement Plan (ORP) prior to July 1, 2010, have maintained an account balance, and are vested (have five years of service) by Jan. 1, 2013. This is a defined benefit retirement plan. Employees are required to contribute five percent of their annual salary to their retirement account.
More information can be found on the Virginia Retirement System Website.
Employees are covered by Plan 2 if they participated in a VRS or ORP plan between July 1, 2010 and Dec. 31, 2013 and have maintained an account balance. Employees are also considered Plan 2 if they participated in a VRS or ORP plan prior to July 1, 2010, have maintained an account balance, but did not have five years of vesting by Jan. 1, 2013. This is a defined retirement plan. Employees are required to contribute five percent of their annual salary to their retirement account.
More information can be found on the Virginia Retirement System Website.
Employees are covered by the Hybrid Plan if they were hired on or after January 1, 2014, have never participated with a VRS or ORP plan, or have cashed out their VRS or ORP account. This plan is comprised of both a defined benefit portion and a defined contribution portion.
Mandatory Contribution
Employees are required to contribute five percent of their annual salary to their retirement account. The five precent is broken up between the two portions of the Hybrid Plan. Four percent goes to the defined benefit portion of their retirement account. The employee and employer are both required to contribute one percent to the defined contributions portion of their retirement account. Vesting occurs on the defined benefit portion after 60 months of service. Vesting for the defined contribution portion is based on the length of participation in the plan.
Voluntary Contribution
The employee has the option to contribute up to an additional four percent (in .5 percent increments) into the defined contribution portion of the account. Virginia Tech will match the first one percent of the employee's annual creditable compensation as well as the following one percent voluntary contribution. For each additional voluntary .5 percent contribution, Virginia Tech will match a contribution rate of .25 percent. Employees may increase/decrease contributions quarterly.
More information can be found on the VRS Voluntary Contributions Website.
Employees who separate from Virginia Tech can choose to:
- Leave the account with Virginia Retirement System. If the employee is vested or there is a possibility they will return to state service, they may wish to leave the account with Virginia Retirement system for a retirement benefits.
- Rollover to another qualified plan. A rollover is the transfer of all or part of the contributions and interest to another eligible plan or an Individual Retirement Account (IRA) that allows the employee to postpone paying taxes on the account until it is paid to them.
- Request a refund. The terminating employee may request that the account be paid directly to them. Employees do not have to be vested to make this request. If a refund is requested, taxes in the amount of 20 percent federal and 4 percent state will be withheld from the refund. For employees under the age of 59 1/2 years, the IRS may impose an additional 10 percent federal tax penalty on the distribution. The refund process takes 90-120 days after termination.
For more information about the Virginia Retirement System call 1-888-827-3847.
It is possible to purchase additional service for Virginia Retirement System credit.
Examples would be:
- refunded service
- working for a Virginia Retirement System agency but in a non-covered position (submit VRS26)
- military service (submit DD214)
- working for another college or university but not eligible for retirement benefits (submit VRS26)
Participants must purchase their service within two years from the time they start contributing to the VRS.
Cost to purchase (changes to an actuarial amount after 2 years)
- Plan 1 - 12.54% of salary
- Plan 2 - 10.89% of salary
- Hybrid - 6.68% of salary
Additional information and forms can be accessed online.
To see if you qualify for purchase of prior service or recieve an estimate, contact the HR Service Center at 540-231-9331.
Employees are offered several choices of investment options to supplement their retirement plans. Employees may participate in either a 403(b) tax deferred savings plan, the 457(b) deferred compensation plan, or both.
The state also provides cash match benefits to assist eligible employees in preparing for retirement.
For more information regarding Social Security benefits, visit the Social Security Administration website.