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Commonwealth's Counties

JLARC Presents VRS Oversight Report

As part of its July 1 meeting, the Joint Legislative Audit and Review Commission (JLARC) presented an oversight report of the Virginia Retirement System (VRS) as required by the Code of Virginia. The health and well-being of VRS is important to local governments as it administers retirement programs and other benefit programs for state and local government employees, including teachers. VRS receives funds from employer contributions, employee contributions, and investment income.

While information on returns is still being finalized, VRS reported good news that as of March 31, 2024, the Trust fund had a 11.5% return for 1-year period and exceeded the assumed 6.75% rate of return for all other periods. Returns for asset classes met or exceeded nearly all benchmarks. Total Market Fund assets are approximately $133 billion The 2024 Appropriations Act reduced contribution rates for state retirement plans, including the Teacher plan. This means that for FY 25-26, the employer contribution rate will be reduced to 14.21%. As of June 30, 2023, the Teacher plan is now approximately 80% funded with $12 billion remaining in unfunded liabilities. Investment returns are a key source of income for VRS, and meeting or exceeding VRS investment benchmarks is critical to ensuring that employer contributions meant to amortize long-term unfunded liabilities remain low.

VRS serves more than 803,000 active and retired members. Based on assets, VRS is the 14th largest public and private pension systems in the United States, and 42nd largest in the world. The full report and slides from the meeting can be found here and here respectively.

VACo Contact: Jeremy R. Bennett

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