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Commonwealth's Counties

Virginia Retirement System (VRS) Sets FY 2023-2024 Employer Contribution Rates for Teacher Plans

On October 14, the Virginia Retirement System (VRS) Board of Trustees met to review actuarial results for five statewide Retirement Plans (State Employees, Teachers, JRS, SPORS, and VaLORS) and the associated other post-employment benefits (OPEBs). Most relevant for county governments, employer contribution rates for the Teacher plan are expected to be reduced during the coming biennium from the current rate of 16.62% to 14.76%. The VRS Board unanimously approved the contribution rates. These rates have been sent to the Governor and money committees for consideration in preparation of the upcoming budget. If confirmed by the Governor and the General Assembly, this is likely to yield significant savings to the state and local governments, who share the costs associated with funding the Teacher plan.

During the meeting, the system actuary presented the results of the June 30, 2021 actuarial valuation of the statewide pension plans and associated OPEBs programs. The rates for both plans benefited from the historic 2021 fiscal year investment returns; however, the teacher rate further benefited from the funding of the deferred contributions one year ahead of schedule with a $61.3 million infusion by the General Assembly in June 2021 which was applied to the 10-year deferred contribution balance. VACo has traditionally supported and encouraged such actions by the General Assembly as a prudent use of General Funds that yields long-term benefits to both state and local governments.

VRS uses the actuarial valuations for employer contribution rate setting on odd years in advance of the next biennium. The rates for the Teacher plan are presented in October, while the other most important plans to local governments (Political Subdivisions plans) are presented in November. The VRS staff actuary will present summary information for local governments at the Board’s next meeting on November 16, with rates mailed to localities after January 1, 2022. Final contribution rates will be available at the conclusion of the 2022 General Assembly and will take effect on July 1, 2022, for FY 2023 and FY 2024.

VACo Contact:  Jeremy R. Bennett

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