General Assembly>Division of Legislative Services>Publications>Session Summaries>2003>Pensions, Benefits and Retirement


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Pensions, Benefits and Retirement

Passed

P HB1622

Virginia Retirement System; disability benefits. Clarifies that state disability benefits are not to be offset by certain benefits received by a participating employee for service in the United States armed forces.
Patron - Cox

P HB1717

Virginia Retirement System; credit for service in the armed forces. Changes the requirements under which a member may receive retirement credit for service in the armed forces to conform to requirements under federal law. Under Virginia law, a member may receive retirement credit at no cost for service in the armed forces if the member (i) was on leave of absence from a covered position, (ii) was not dishonorably discharged, (iii) has not withdrawn his accumulated contributions, and (iv) has reentered service in a covered position within one year of discharge from the armed forces. However, under Virginia law, retirement credit is not granted for service in the armed forces for reenlistments that follow the cessation of hostilities. Federal law, however, provides that any service in the armed forces, when performed on a leave of absence, is eligible for retirement credit upon a person's reemployment with his employer, regardless of whether the service is in wartime.
Patron - Cox

P HB1791

Virginia Retirement System; group life insurance program. Deletes the requirement that service must have been continuous in calculating the threshold 60 months of service required to continue life insurance benefits after a service or disability retirement.
Patron - Tata

P HB1986

Virginia Retirement System; losses of deferred compensation and defined contribution retirement plans. Provides that the Commonwealth, the Board of Trustees of the Virginia Retirement System ("VRS"), the employees of VRS, and the Investment Advisory Committee of VRS shall not incur any liability for losses suffered by deferred compensation and defined contribution retirement plans administered by VRS.
Patron - Putney

P HB2053

Virginia Sickness and Disability Program. Clarifies that annual increases in long-term disability payments are to be determined by the actuary of the Virginia Sickness and Disability Program.
Patron - Ingram

P HB2116

Virginia Retirement System; payment of an eligible rollover distribution to an eligible retirement plan. Provides compliance with the direct plan-to-plan transfer provisions of Internal Revenue Code § 401(a)(31) and the regulations thereunder.
Patron - Reid

P HB2122

Virginia Retirement System; purchase of prior service credit. Provides that school division superintendents may purchase an additional 10 years of retirement service credit for prior service for the Commonwealth or another state (this is in addition to the four years under law that may already be purchased). The cost for each additional year of service shall equal 10 percent of the superintendent's compensation at the time of purchase, provided that the additional retirement service is purchased within one year of the superintendent's eligibility and is paid for in one lump-sum payment to the Virginia Retirement System. For each year of service purchased under the bill, the school division superintendent is required to serve the same number of years as a school division superintendent subsequent to the date of purchase. Any school division superintendent who fails to serve the required number of years shall forfeit any credited service for the number of years not served and shall be liable to his local board for any amount paid by it for purchasing the forfeited prior service credit.
Patron - Reid

P HB2438

Virginia Retirement System; teachers. Clarifies that certain retired teachers who resume teaching duties without cessation of their retirement benefits may do so under successive one-year contracts. The bill also sunsets this benefit on July 1, 2005.
Patron - Dillard

P HB2487

Virginia Retirement System. Restores the level income option that was removed in the 2001 Session by allowing a retiree to receive a temporarily increased retirement allowance for a defined period of time and then to receive an allowance reduced on an actuarially equivalent basis.
Patron - Tata

P HB2556

Virginia Retirement System; withdrawing employers. Authorizes the Virginia Retirement System ("VRS") to enter into an agreement with a VRS employer to assume the pension liabilities of an employer who withdraws from VRS. Retired members of the withdrawing employer shall have their retirement allowances paid by the employer who agrees to assume such liabilities. Vested members of withdrawing employers who are not retired can elect to either cash out or have their retirement allowances paid by the employer agreeing to assume such liabilities.

In general, the employer who agrees to assume the pension liabilities of a withdrawing employer shall receive from VRS 105 percent of the present value of the remaining pension liabilities after cashing out by vesting members. Such funds shall be paid from the withdrawing employer's VRS pension accounts and shall be used to pay the pension liabilities for former VRS employees of the withdrawing employer. Any remaining funds in the VRS pension accounts of the withdrawing employer shall be distributed to VRS employers who provided funding to the withdrawing employer.
Patron - Landes

P HB2620

Health insurance credits for retired state employees. Removes the monthly credit cap of $120. The bill is not effective unless reenacted by the 2004 General Assembly.
Patron - Putney

P SB812

State Police Officers' Retirement System. Provides that state police officers in service at age 60 or older with five or more years of service may elect to retire and to continue to receive their retirement allowance while employed as an employee of the Department of State Police. The bill also provides that state police officers, between the ages of 55 and 59, with five or more years of creditable service who (i) have been rehired as an employee of the Department of State Police and (ii) have been receiving a service retirement allowance for at least 30 days prior to such reemployment may elect to continue to receive such service retirement allowance while an employee of the department. The bill limits the number of years that a person may receive a retirement allowance while an employee of the Department of State Police to two. The provisions of the bill sunset on July 1, 2005.
Patron - Stolle

P SB849

Optional retirement plans of institutions of higher education. Authorizes institutions of higher education to establish their own optional retirement plans for employees engaged in the performance of teaching, administrative, or research duties, as an alternative to the Virginia Retirement System ("VRS") defined benefit retirement plan. The bill provides that VRS shall give initial approval to institutions of higher education seeking to establish such optional retirement plans. The bill prohibits such institutions from adopting policies that are substantially different than the retirement policies approved by VRS in the initial approval process unless the VRS Board approves such policies in writing. Prior to granting to any institution of higher education approval to establish its own optional retirement plan, VRS shall release a plan to the chairmen of the Senate Committee on Finance and the House Appropriations Committee establishing criteria and guidelines VRS shall apply in granting approval for such optional retirement plans.

Any employee hired on or after July 1, 2003, by an institution of higher education to perform such duties, shall make an election to participate in either the VRS defined benefit retirement plan or in an optional retirement plan. If an employee chooses to participate in an optional retirement plan but the institution of higher education has not established its own optional retirement plan, the employee shall participate in an optional retirement plan maintained by VRS. However, at such time that the institution establishes its own optional retirement plan, any employee (i) engaged in the performance of teaching, administrative, or research duties and (ii) participating in an optional retirement plan, shall immediately begin to participate in the optional retirement plan of the institution, notwithstanding any prior election to participate in a different optional retirement plan.

The bill provides different options for University of Virginia Medical Center employees. Any employee of the Medical Center hired on or after July 1, 2003, shall participate in the optional retirement plan of the Medical Center, provided, however, that if such employee was participating in the VRS defined benefit retirement plan immediately prior to such hiring, such employee may elect to continue to participate in the defined benefit retirement plan.
Patron - Miller, K.G.

P SB857

Virginia Retirement System; administrative fees. Provides that the Virginia Retirement System (VRS) may charge and collect administrative fees to pay its costs incurred in administrating and overseeing any retirement plan or service award fund other than the Virginia Retirement System, State Police Officers' Retirement System, Virginia Law Officers' Retirement, or the Judicial Retirement System. The bill also authorizes VRS to charge and collect from participating employers any penalties, interest, compliance fees, or other charges charged to VRS by the Internal Revenue Service or other regulatory body. Persons employed in teaching, administrative or research functions at institutions of higher education who are enrolled in an optional retirement plan may be charged with a reimbursement fee by their employer for purposes of recovering VRS charges for administrating and overseeing the optional retirement plan.
Patron - Stosch

P SB905

Virginia Retirement System; life and accidental death and dismemberment insurance. Provides that any employee who (i) at any time had at least 25 years of creditable service in any retirement plan administered by the Virginia Retirement System or other Virginia public plan participating in the group life program and (ii) shall be eligible for an amount of group life insurance at an amount equal to twice the amount of his annual salary earned in his immediately prior covered position. The Bill also provides that for any employee who returns to covered employment after retiring with at least 25 years of creditable service in any retirement plan administered by the Virginia Retirement System or other Virginia public plan participating in the group life program, the amount of life insurance shall be the greater of the amount of insurance he would have been eligible for had he remained a retiree or twice the amount of his current annual salary. The bill provides that the face value of such a life insurance shall be reduced as currently provided under law.
Patron - Quayle

P SB1038

Virginia Retirement System; creditable compensation. Eliminates provisions that require the Board of Trustees of the Virginia Retirement System to determine the value of certain nonmonetary compensation paid to employees for purposes of determining creditable compensation for retirement.
Patron - Trumbo

Failed

F HB1507

Virginia Retirement System. Increases the retirement allowance for state and local members of the Virginia Retirement System who retire on or after July 1, 2003, by increasing the percentage of average final compensation that is multiplied by the amount of creditable service (i) from 2 percent to 2.75 percent for certain members of the Virginia Law Officers' Retirement System who retire with 25 or more years of creditable service and who are not eligible for the supplemental allowance; (ii) from 2 percent to 2.5 percent for members of the Virginia Law Officers' Retirement System who retire with 25 or more years of creditable service and who are eligible for the supplemental allowance; and (iii) from 1.7 percent to 2 percent for all others who retire with 25 or more years of creditable service.
Patron - Callahan

F HB1522

Virginia Retirement System; creditable compensation of teachers. Provides that the creditable compensation of teachers for retirement purposes under the Virginia Retirement System shall include all compensation payable to teachers by their public school boards, including compensation that is not pursuant to a contract for teaching.
Patron - Kilgore

F HB1567

Retirement; creditable compensation for teachers. Provides that creditable compensation for teachers shall include remuneration for extra instructional duties, whether performed during normal school day hours or outside normal school day hours.
Patron - Hamilton

F HB1568

Virginia Retirement System. Increases the retirement allowance for all state and local members of the Virginia Retirement System by gradually increasing, over a 6-year period, the percentage of average final compensation that is multiplied by the amount of creditable service (i) from 2 percent to 2.3 percent for certain members of the Virginia Law Officers' Retirement System who are not eligible for the supplemental allowance and (ii) from 1.7 percent to 2 percent for all others. The bill also gradually increases, over a six-year period, the monthly retirement allowance paid to members of the Virginia Retirement System who retired prior to July 1, 2003, by 3 percent.
Patron - Hamilton

F HB1674

Virginia Retirement System; purchase of prior service credit. Permits any member to purchase up to four years of prior service credit, at the rate of five percent of creditable compensation, for any period of time when the member was employed by a nonprofit entity that was exempt from taxation under § 501 (c) (3) of the Internal Revenue Code.
Patron - Petersen

F HB1734

State Police Officers' Retirement System. Modifies the retirement allowance paid under the State Police Officers' Retirement System (SPORS) by increasing from 1.7 percent to 2.0 percent the percentage of average final compensation multiplied by the years of creditable service in a SPORS-covered or similar position, and by deleting the supplemental allowance currently paid to members upon retirement until their Social Security retirement age (currently $9,264 annually). This provision applies to employees who become members of SPORS on or after July 1, 2003, and to current employees who elect to accept the modifications by October 31, 2003.
Patron - Rollison

F HB1766

Virginia Retirement System; age for retirement. Deletes any minimum age requirement for those retiring from the Virginia Retirement System with 30 or more years of creditable service.
Patron - Nutter

F HB1789

Virginia Retirement System; prohibition on selecting a different option for the payment of a retirement allowance. Clarifies that a member retiring a second or subsequent time under any of the retirement plans administered by the Virginia Retirement System is prohibited from selecting a different option for the payment of his retirement allowance than the one selected upon his first retirement, except as provided for in the case of the death of a contingent annuitant, divorce from a beneficiary or the giving of consent by a contingent annuitant.
Patron - Tata

F HB1801

Virginia Law Officers' Retirement System. Adds internal investigators of the Department of Corrections to the membership of the Virginia Law Officers' Retirement System.
Patron - Jones, D.C.

F HB1807

State Police Officers' Retirement System. Changes the retirement benefits under the State Police Officers' Retirement System by increasing the percent of average final compensation that is multiplied by the amount of creditable service from 1.7 to 2.5, and eliminating the supplemental benefit that was payable from the date of retirement until retirement age under the Social Security Act.
Patron - Carrico

F HB1897

Virginia Retirement System; creditable compensation of teachers. Provides that the creditable compensation of teachers for retirement purposes under the Virginia Retirement System shall include all compensation payable to teachers by their public school boards, including compensation that is not pursuant to a contract for teaching.
Patron - Stump

F HB1968

Virginia sickness and disability program. Requires the Virginia Retirement System, by July 1, 2004, to promulgate regulations that will allow participation in the Virginia sickness and disability program by employees of a locality participating in VRS. The regulations may be developed so as to allow such participation to be phased in over a period of five years.
Patron - Athey

F HB2093

Appearance as counsel by retired judge. Allows retired judges to practice law outside of their former circuits/districts and continue to receive their retirement allowance from the Judicial Retirement System. This bill does not apply to justices of the Supreme Court or to judges of the Court of Appeals. Judges who continue to practice law in retirement are not eligible to serve as substitute judges.
Patron - Joannou

F HB2172

Virginia Retirement System; purchase of prior service credit. Permits any in service member of the Virginia Retirement System who is an employee with the Dickenson County Public Service Authority and who was an employee with the Big Caney Water Corporation at the time it merged with the Dickenson County Public Service Authority to purchase one year of creditable service for each year of service as a full-time employee with the Big Caney Water Corporation, up to a maximum of four years. The cost of service credit purchased under this subsection shall be the actuarial equivalent cost of such service.
Patron - Phillips

F HB2295

Retirement; state and local law-enforcement officers and firefighters. Deletes the minimum age requirement for retirement for state and local law-enforcement officers and firefighters with 25 or more years of service.
Patron - Devolites

F HB2296

Retirement; state police officers and certain local law-enforcement officers. Modifies the retirement allowance paid to state police officers and to certain local law-enforcement officers and firefighters by increasing from 1.7 percent to 2.0 percent the percentage of average final compensation multiplied by the years of creditable service in such positions, and by deleting the supplemental allowance currently paid to members upon retirement until their Social Security retirement age (currently $9,264 annually). This provision applies to employees who become members of the applicable retirement system on or after July 1, 2003, and to such current employees who elect to accept the modifications by October 31, 2003.
Patron - Devolites

F HB2345

Deputy sheriffs; retirement allowance. Provides that deputy sheriffs employed by political subdivisions participating in the Virginia Retirement System ("VRS") shall receive the same retirement benefits as sheriffs. Under current law, any sheriff employed by a political subdivision participating in VRS shall receive retirement benefits equivalent to those provided under the State Police Officers' Retirement System ("SPORS") for state police officers. This bill would provide that deputy sheriffs, whose political subdivision participates in VRS, also receive retirement benefits equivalent to those provided under SPORS.
Patron - Weatherholtz

F HB2399

Virginia Law Officers' Retirement System. Adds firefighters of the Virginia National Guard Fire and Rescue as members of the Virginia Law Officers' Retirement System.
Patron - Ingram

F HB2439

Virginia Retirement System; creditable service for certain teachers. Provides that licensed instructional personnel who accept full-time employment in a public school that has been accredited with warning for two consecutive years, as provided in Board of Education regulations for the accreditation of public schools, and complete three consecutive years' satisfactory service in such school, shall be entitled to three additional years' creditable service.
Patron - Dillard

F HB2548

Virginia Retirement System; General Assembly members. Specifies that current law permitting retirees of the Virginia Retirement System (VRS) to receive retirement benefits while serving in a VRS covered position as a General Assembly member was applicable beginning January 1, 1993.
Patron - Christian

F HB2629

Virginia Retirement System; service credit for military personnel. Provides that employees of the Commonwealth, or of any political subdivision of the Commonwealth, who are granted a leave of absence for military duty with the reserve forces of the armed services of the United States or the Virginia National Guard shall receive retirement service credit for such service at no cost, provided (i) the military service was completed under honorable conditions, (ii) the employee has not withdrawn his accumulated contributions, and (iii) the employee is employed in a covered position within one year after completion of such military duty.
Patron - Ware

F HB2706

Health insurance credits for certain retirees. Increases the monthly health insurance credit used to offset the cost of health insurance premium costs to $4 for each year of creditable service, not to exceed a maximum monthly credit of $120 for retired (i) teachers, (ii) local government employees, (iii) constitutional officers and their employees, and (iv) local social service employees. Under current law the monthly health insurance credit for teachers is $2 for each year of creditable service up to a maximum monthly amount of $75, and, for the remainder of these employees, these amounts are $1.50 and $45, respectively.
Patron - Rapp

F HB2732

Virginia Retirement System; enhanced benefits for salary donations from state employees. Permits any state employee to donate 8.33 percent of his salary to the Commonwealth for either or both of the fiscal years ending June 30, 2004, or June 30, 2005, and to receive in exchange certain enhanced retirement benefits under the Virginia Retirement System. For each fiscal year that the employee makes the donation, he shall be entitled, upon retirement, but not prior to July 1, 2005, to have four years of his creditable service multiplied by: (i) 2 percent instead of 1.7 percent in any retirement allowance calculation for any VRS member other than certain members of the Virginia Law Officers' Retirement System; and (ii) 2.3 percent instead of 2 percent in any retirement allowance calculation for certain members of the Virginia Law Officers' Retirement System. Salary donations will not reduce the employee's average final compensation in computing his retirement benefits. Any employee participating may not begin receiving the enhanced retirement benefits prior to July 1, 2005. To participate, an employee must elect to do so between April 15, 2003, and June 15, 2003, on a form and according to procedures to be developed by the Department of Human Resource Management. Donations will be paid into a dedicated special fund in the state treasury, ("the State Employees' Revenue Shortfall Fund") to be used solely to reduce the revenue shortfall of the Commonwealth for the fiscal years ending June 30, 2004, and June 30, 2005.
Patron - Tata

F SB719

Virginia Retirement System; creditable compensation of teachers. Provides that the creditable compensation of teachers for retirement purposes under the Virginia Retirement System shall include all compensation payable to teachers by their public school boards, including compensation that is not pursuant to a contract for teaching.
Patron - Wampler

F SB720

Virginia Retirement System. Increases the retirement allowance for all state and local members of the Virginia Retirement System by gradually increasing, over a six-year period, the percentage of average final compensation that is multiplied by the amount of creditable service (i) from 2 percent to 2.3 percent for certain members of the Virginia Law Officers' Retirement System who are not eligible for the supplemental allowance and (ii) from 1.7 percent to 2 percent for all others. The bill also gradually increases, over a six-year period, the monthly retirement allowance paid to members of the Virginia Retirement System who retired prior to July 1, 2003, by 3 percent.
Patron - Wampler

F SB848

Heath insurance credit; retired teachers. Increases the health insurance credit for retired teachers from $2.50 to $4 per month for teachers for each full year of creditable service, not to exceed a maximum monthly credit of $120 for teachers with 30 or more years of creditable service.
Patron - Howell

F SB883

Virginia Retirement System; average final compensation. Indexes the average final compensation of state and local employees who are members of the Virginia Retirement System, the State Police Officers' Retirement System, the Judicial Retirement System, and the Virginia Law Officers' Retirement System. Average final compensation is increased only for those members who retired between December 1, 2001, and November 30, 2002, or those members in continuous service since July 1, 2002. Average final compensation is increased by a factor between 1.01011 and 1.10366 depending upon when the employee retired or retires and whether or not the Commonwealth or a locality participating in the Virginia Retirement System provided a general salary increase between December 1, 2001, and November 30, 2004.
Patron - Wampler

F SB940

State Police Officers' Retirement System and Virginia Law Officers' Retirement System; hazardous duty allowance. Provides that the additional allowance under the State Police Officers' Retirement System and the Virginia Law Officers' Retirement System for members with 20 or more years of service rendered in a hazardous position shall be paid annually for a minimum period of 15 years to members retiring at age 50 or older who have not retired prior to July 1, 2003, under any retirement plan administered by the Virginia Retirement System.
Patron - Colgan

F SB958

Long-term care insurance; employees of the Commonwealth. Provides that the Department of Human Resource Management shall develop a long-term care insurance program that shall offer group policy long-term care insurance to current and retired employees of the Commonwealth. Former employees not yet retired (i) credited with five or more years of creditable service while an employee of the Commonwealth and (ii) who have not withdrawn their accumulated contributions shall also be allowed to purchase such insurance from the Department.
Patron - Martin

F SB1178

Virginia Retirement System; creditable compensation of teachers. Provides that the creditable compensation of teachers for retirement purposes under the Virginia Retirement System shall include all compensation payable to teachers by their public school boards, including compensation that is not pursuant to a contract for teaching.
Patron - Puckett

F SB1191

Retirement; service credit for state employees when there is no general salary increase. Provides that state employees shall be credited with up to 12 months of additional retirement service credit for each fiscal year that the Commonwealth does not provide a general salary increase. The amount of service credit to be credited to each such employee shall be equal to the number of months that the person was in service as a state employee in the relevant fiscal year, rounded up to the nearest whole month. State employees covered under a defined contribution retirement plan for retirement purposes and local government employees are not eligible to receive the additional service credit. Under the bill, additional retirement service credit is granted for Fiscal Year 2002, Fiscal Year 2003, and for any fiscal year of the Commonwealth beginning or after July 1, 2003, for which there was no general salary increase.
Patron - Wagner

F SB1198

State and local employment benefits; group life insurance. Provides that the group life insurance benefit payable upon the death of certain retirees of the Virginia Retirement System, Judicial Retirement System, State Police Officers' Retirement System and political subdivisions and local school boards participating in the Virginia Retirement System shall equal no less than 100 percent of such retiree's annual salary immediately prior to his retirement. Current law provides that such benefit shall equal no less than 50 percent of the retiree's annual salary immediately prior to his retirement.
Patron - Deeds

F SB1207

Retirement Incentive Program Act of 2003. Creates a voluntary retirement incentive program for state employees. A state employee who is at least 50 years of age and who has at least 27 years of creditable service, if a member of the Virginia Retirement System, or 23 years of creditable service, if a member of the State Police Officers' Retirement System or the Virginia Law Officers' Retirement System, is eligible to participate. An employee must apply to participate in the program by September 15, 2003, and the employee's employer must approve the application.

For each employee participating, the Commonwealth will purchase on behalf of such employee years of credit to be added to his age or creditable service for retirement purposes. The amount of years to be purchased is substantially similar to the amount of years of credit that the Commonwealth may purchase under the Workforce Transition Act of 1995. Employees participating in the retirement incentive program are required to retire on an immediate retirement allowance and shall not be rehired by the Commonwealth in a similar position for a period of three years.
Patron - Newman

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