The Virginia Retirement System (VRS) reported in its May 2014 Employer Update that local governing bodies and school boards must officially elect their VRS employer retirement contribution rates for the 2014-2016 biennium through a local resolution by July 1.
Employers may elect to pay either the rate certified by the VRS Board of Trustees or an alternate rate for contribution rates effective July 1, 2014.
VRS mailed all administrative heads a resolution packet providing specific contribution rate options in early May.
At VACo’s request, VRS sent a follow up e-mail on May 15 to local administrative heads that provides additional administrative flexibility for localities to demonstrate to VRS the contribution rate selected by the governing body.
Localities may adopt the resolution provided by VRS certifying the rate selected by July 1 and then send VRS the completed resolution by July 10. Alternately, if your governing body has previously approved a VRS contribution rate as part of its budget process, your locality may now send VRS confirmation of the rate selected by July 10 rather than go through the process of adopting a separate resolution.
The confirmation of the rate selection must be signed by the administrative head or clerk and include specific documentation detailing the rate selected. School divisions electing the certified rate must obtain approval from their local governing body. Local governing bodies should utilize VRS’ detailed and individualized instructions sent to each administrative head.
In a separate but related matter, VRS recently reminded employers that are currently phasing in the 5 percent member contribution for Plan 1 and Plan 2 employees, must approve the 2015 fiscal year contribution election and submit an updated resolution to VRS by no later than July 10. Administrative heads and fiscal officers received a letter and an updated resolution from VRS in March.
Under Code of Virginia §51.1- 144, localities have the option to elect to phase in the amount the employee pays at a minimum of 1 percent each year until 2016, including a corresponding salary increase.
If you have questions on either of these matters, contact ZaeAnne Sferra, VRS employer coverage coordinator, at email@example.com or 804.775.3514.