Virginia Retirement System (VRS) Board Sets FY 2019-2020 Contribution Rates for Political Subdivisions

November 21, 2017

On November 16, the VRS Board of Trustees received reports by its actuaries on the valuation of pension plans for political subdivisions, the Health Insurance Credit for political subdivisions, the Virginia Local Disability Program, and the Line of Duty Act (LODA) Fund.

Overall, VRS’s actuaries reported that the funded status of pension plans improved for most employers, and contribution rates are expected to decline for slightly more than half of employers. For political subdivisions offering enhanced benefits for hazardous duty employees, the average employer contribution rate will be 10.6 percent of covered payroll (down from 10.7 percent in the current biennium), and for political subdivisions not offering these enhanced benefits, the average contribution rate will be 7.6 percent (down from 8.2 percent in the current biennium). Each political subdivision will receive its valuation and contribution rate from VRS in January, based on its individual experience and population covered. Localities electing coverage for the Health Insurance Credit will receive individual contribution rates for this program as well.

The Health Insurance Credit contribution rates for Constitutional officers, social services employees, and general registrars were approved at 0.38 percent, 0.43 percent, and 0.39 percent, respectively. Rates for the Virginia Local Disability Program were set at 0.41 percent for teachers and 0.72 percent for political subdivisions.

The Board also approved a contribution rate for political subdivisions participating in the LODA Fund of $705.77 per LODA-eligible employee/volunteer. This rate is up from the previous rate of $567.37, due in part to increases in health care costs.

These rates will take effect July 1, 2018.

VACo Contact: Katie Boyle

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