For all full-time classified salaried employees:
The Virginia Retirement System (VRS) administers the Hybrid Retirement Plan, which is a combination of a defined benefit and a defined contribution plan. The retirement benefit for the defined benefit portion is determined by the number of years of service accumulated in VRS covered positions, age at retirement, and the average of five highest consecutive years of salary. The defined contribution benefit is based on the gains and losses in your defined contribution account.
- Contributions: Your contributions range from a minimum of five percent to a maximum of nine percent (if you choose voluntary contributions) of your gross salary, based on the distributions below.
- Defined Benefit: VMI contributes a percentage of your monthly gross salary to the defined benefit portion of the Hybrid Plan; you contribute four percent of your monthly gross salary. The benefit is guaranteed by VRS and VRS assumes all investment risk.
- Defined Contribution: You contribute a minimum of one percent of your monthly gross salary, with VMI matching the one percent contribution. You can add an additional four percent to the minimum (in 0.5% increments), with VMI matching 2.5% maximum. Therefore, the maximum you can contribute to this portion of the plan is five percent of your gross salary, with VMI providing 3.5% matching. ICMA-RC is the plan provider of the defined contribution portion of the Hybrid Plan.
- Vesting: The minimum amount of time you must be employed in order to become eligible for a retirement benefit. The time required to vest varies for each portion of the plan.
- Defined Benefit: You must accumulate at least five years of service to be vested in defined benefit portion of the Hybrid Plan (vested means you are eligible to receive lifetime benefits).
- Defined Contribution: You are immediately vested for your contributions. You will be 100% vested for the employer contributions after four years.
- Portability: In you leave state service, you may leave your contributions in the retirement system, withdraw the contributions in your individual account plus interest, or you may roll over the taxable portion of your refund to another qualified plan or IRA.
For all full-time salaried teaching and administrative faculty:
A new faculty employee may select the Hybrid Plan administered by the VRS (described above) or the Optional Retirement Plan for Higher Education (ORPHE).
The ORPHE is a defined contribution plan that has immediate vesting of contributions. The benefit at retirement is based on contributions paid into the plan and the gains and losses on those contributions.
- Contributions: Your contribution is five percent of your monthly gross salary, on a pre-tax basis. Your contributions are not taxable until you withdraw them from your account. VMI contributes eight and one-half percent (calculated based on your monthly gross salary) to your account. You make the investment choices and you assume all risks associated with those choices.
- Vesting: Immediate for both member and employer contributions.
- Portability: The ORP, unlike the VRS plan, is “portable,” that is the account (both your contributions and the VMI contributions) can be transferred to another institution of higher education that offers the same plan provider.
VMI offers the following plan providers for the ORP:
- Fidelity Investments Tax-Exempt Services