Virginia Retirement System (VRS) Meeting and News Bulletin

June 19, 2019

On June 7, VACo staff attended the VRS Board of Trustees’ final meeting of FY 2019. On the agenda, the Board heard reports from Chief Investment Officer Ronald Schmitz, who detailed how recent uncertainty around global economic output impacted May’s equity markets. Turbulence and systemic risk metrics are up, but not as high as they were in the fall of 2018, which precipitated the turbulent month of December. Taking that into account, VRS still expects to come close to hitting their target rate of return of seven percent by the end of June as gains in the month of June have already recovered two thirds of May’s decline in the equity markets and risk factors have not reached levels of high concern.

VRS Director Patricia Bishop detailed the Agency’s response to the recent tragedy in Virginia Beach, which included immediate communication with the locality and answering questions regarding VRS benefits to victims of felonious assault and Virginia Education Savings Trust (529) accounts for impacted children. VRS’s Audit and Compliance Committee also reported on a clean bill of health for the Agency’s management.

The VRS Board of Trustees July meeting has been cancelled and the Board is currently scheduled to convene again on September 19 in Richmond. Contribution rates for VRS employers are established every two years in advance of the biennial budget and will be based on a report on the actuarial valuation for VRS that will be published later this year. Lastly, the Joint Legislative Audit and Review Commission (JLARC) will meet on July 15 to give its annual report on VRS.

In the latest monthly publication from VRS, the Agency highlighted how county employees in Prince George County plan for retirement, previewed the coming auto-escalation feature for Hybrid Retirement Plans effective January 1, 2020, and provided an overview of enacted legislation and budget language relevant to VRS including the extension of the K-12 critical shortage program to July 2025, among other features. An archive of past bulletins and a link to subscribe to future news bulletins can be found here.

VRS serves 706,045 total members, retirees, and beneficiaries and has 460 participating political subdivisions. The system paid out $4.8 billion in retirement benefits last year and generated a 7.5% return on investments. The fiduciary net position of the trust fund is $81.2 billion and as based on assets, is the 19th largest among public and private pension systems in the United States. The funded status of the State, Teacher, and Political Subdivisions plans was 76.3%, 74.5%, and 89.3%, respectively.

VACo Contact: Jeremy R. Bennett

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