Dear Colleagues:

We want to make you aware of mandated changes to the Virginia Retirement System (VRS) that will take effect on January 1, 2014. This change creates a new type of VRS retirement plan that is a combination of the current system (a defined benefit plan) and an investment account like a 457 or 403b (a defined contribution plan). This will be known as the Hybrid Plan. As of January 1st, all newly hired VRS-eligible employees who do not have previous active service in the VRS system will be required to enroll in this hybrid retirement plan. Current VRS members will remain in the current plan, but will have the opportunity to opt-in to the Hybrid Plan during a special enrollment period that will begin in January. Please note that hazardous duty employees like sworn officers and firefighters are not eligible to participate in the Hybrid Plan.

The Hybrid Plan will also be different from the current VRS plans in that it will not include a disability retirement option. Instead, it will offer a combination of employer-paid short-term and long-term disability benefits. This program is called the Virginia Local Disability Plan (VLDP). Employers will have the option to join the VLDP or provide equivalent coverage for their Hybrid Plan employees. We are currently assessing our options in this regard and must notify VRS of our intention to opt-in or opt-out of the VLDP by November 1st.

This change in disability plan coverage will create some inconsistencies with our leave policies and disability programs between those employees who are in the current VRS plan and those who will be in the Hybrid Plan. As a result, we are studying how best to manage leave policies and disability programs for all employees, regardless of which VRS retirement plan applies.

Between now and the end of the special enrollment period, we will be providing much more information to you to help you determine whether your best option will be to remain in your current VRS plan or to change to the Hybrid Plan. Because the decision to opt in or opt out of the Hybrid Plan is an irrevocable one, you should review this information carefully as you receive it, and you are encouraged to attend one of the informational sessions that will be offered to you in the coming months. In the meantime, you can learn more about the Hybrid Plan by visiting the VRS web site.

Be on the lookout for additional information!

Sincerely,

Lorna Gerome
Director of Human Resources