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U.Va. Human Resources
Virginia Retirement System (VRS) Pre-Retirement Guide
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VRS members may retire with unreduced benefits at age 65 with at least five years of state service, or as early as age 50 with at least 30 years of state service. Reduced benefits are available beginning at age 50 with 10 years of state service or age 55 with 5 years of state service.

VRS members must request that your department enter separation information into Oracle or PeopleSoft. You should also follow the steps below to insure the timely receipt of your benefits:
  • Approximately three months prior to your retirement, contact the Benefits Division in University Human Resources at (434) 924-4392 for an appointment to discuss VRS retirement payment options, health insurance, and other retirement benefits.
  • At least three months prior to your retirement, telephone or write the local Social Security Office to apply for payments, if desired. If you or a dependent are age 65 or older, you must also apply for Medicare to begin as of the retirement date.
The benefits available for you at retirement include VRS benefits, Social Security and Medicare, health care insurance, and, in many cases, life insurance, and distribution from tax-deferred savings. On the following pages is general information about all of those benefits, except Social Security and Medicare. Also provided is an explanation of health care insurance available to you, both during employment and after retirement.

Virginia Retirement System Benefits

Please visit the VRS Planning for Retirement website for information on calculating your estimated retirement annuity, to review the Pre-Retirement Planning Guide and to check for the dates of the next VRS sponsored Retirement Education Seminars.

The amount of your retirement benefit is based on three factors: your average final compensation (average of your highest 36 consecutive months of salary or AFC), years of service, and age at retirement. The basic formula is 1.7% of AFC x Years Of Service. Personalized retirement calculations can be run on the VRS website.

Virginia Retirement System Options

Before you retire, you will choose the income option which suits your needs. The following payment options are available from VRS:
  • Basic Annual Lifetime Benefit
  • 10% - 100% Survivor Option
  • Special Survivor Option
  • Partial Lump Sum Option Payment (PLOP)
  • Advance Pension Option (APO)
If you did not join the Virginia Sickness and Disability Program (VSDP), you are eligible to use your sick leave balance to purchase VRS service credit at retirement. The maximum purchase of service time cannot exceed the sick leave pay out rules and is governed by the VRS policies found in the VRS Handbook. The Benefits Division will submit your accrued sick leave hours to the VRS and then VRS will determine exactly how many months of service an employee is eligible to purchase. Any calculations performed by the employee and/or Benefit Counselor are strictly estimates. Final Determination of how many months one can purchase is done by the VRS. If you joined VSDP, you are eligible to use your disability credits to purchase VRS service credit at retirement.

Taxation of Retirement Benefits

Federal Tax
Your VRS retirement benefit is subject to federal income tax. At retirement, you will file a VRS-15 Request For Income Tax Withholding.

State Tax
If you plan to reside in the Commonwealth of Virginia during retirement, your VRS retirement benefit is subject to state income tax. At retirement, you will file a VRS-15 Request For Income Tax Withholding.

How to Apply
Approximately three to six months before your desired retirement date, contact the Benefits Division in University Human Resources to apply for VRS retirement benefits. They may use the VRS Retirement Benefit Calculator to estimate the amount of your retirement benefit.

Health Care Insurance

Health Care Insurance for Active Employees Age 65 and Over
Health care insurance for active employees age 65 and over (and their spouses) is identical to that of employees under age 65. Because Medicare is the secondary provider while you remain employed, you may enroll in Medicare Part A just before your 65th birthday, but may defer Medicare Part B until you retire. If you enroll in Medicare Part B just before you retire, there will be no penalty.

Eligibility for Health Care Insurance After Retirement
The Commonwealth of Virginia provides a health insurance group for retirees who receive VRS, ORP or MCRP retirement income. The Benefits Division will assist you with the health insurance application if you elect coverage for yourself and dependents at the time you retire. Your spouse will be able to continue coverage for the rest of his or her life in the event of your death if both of you elect coverage when you retire and you continue coverage in the state retiree insurance program until your death.

Your health insurance premium will be deducted from your monthly VRS check if it is large enough to cover the premium. Otherwise, you may choose to receive coupons and pay premiums by check each month or you may authorize a monthly bank draft from your checking or savings account to pay your premiums if the administrator of your insurance plan offers this option.

If you or your spouse or dependents are ineligible for Medicare when you retire, those ineligible for Medicare will be covered by the UVa Health Plan. Dental and/or vision options are available in addition to the basic health coverage.

If you or your spouse or dependents are eligible for Medicare, the state insurance program is available to those who are Medicare-eligible as secondary coverage after Medicare. The Commonwealth group currently offers one Medicare-supplement plan with a dental/vision option.

These offerings are subject to change each January 1.

Insurance Rates for Retirees

Health Credit for Retirees
The Commonwealth of Virginia provides a partial subsidy to cover the health insurance cost. The subsidy is a tax-free credit on the monthly premium and is available for retirees with 15 or more years of service. The monthly credit is calculated by multiplying $4.00 by the number of years of service. VRS calculates your health credit amount when you retire and automatically includes it in your monthly VRS check if you elect to stay in the state insurance program. If you waive your right to enroll in the state plan, you must complete the VRS-45 form to receive your monthly health credit in your VRS check. This form must be completed every time your premium or health insurance carrier changes.

How to Enroll in Retiree Health Insurance
During a pre-retirement appointment with a representative of the Benefits Division, you and your spouse may complete applications for the retirees' group. If you do not elect health insurance within 31 days of retiring, you waive all future rights to the coverage. Detailed information about the health insurance options is available from the Benefits Division.

How to Change Retiree Health Insurance Coverage
Retirees in the state insurance program who need to make any health coverage changes should contact the Benefits Division of University Human Resources. These changes include additions, deletions, address changes, and Medicare eligibility. Some changes can only be accepted and processed at specific times during the year. Therefore, it is imperative that you contact the University Benefits Division as soon as the event causing the change occurs.

Other Benefits

Life Insurance
After you retire, and if you were enrolled in the Basic Life insurance with Minnesota Life, your life insurance continues at no cost to you provided you are at least age 55 and have at least five years of continuous service as an employee; or are age 50 with 10 years of service (including five years of continuous service as an employee). The amount of your insurance reduces by 25 % annually starting January 1 following 12 months of retirement, and on every January 1, thereafter, until your coverage reaches 25 % of its value at your retirement. Reduction begins on the January 1 following the first 12 months from the date you separate from service if you are eligible to retire but defer receipt of your annuity. At its fully reduced level, you will have approximately 1/2 of your pre-retirement compensation in life insurance.

Your life insurance also continues if you retire because of a disability. Your life insurance does not begin to reduce until you reach age 65. Beginning January 1 of the first full year following the date you reach age 65, your insurance begins to reduce at the rate of 25% annually until your coverage reaches 25 % of its value at retirement.

If you took either a service or disability retirement before July 1, 2001 you continue to have your basic group life insurance reduce 2 % per month until it reaches 25 % of its value at retirement.

Although accelerated death benefit and the right to voluntary irrevocable assignment continue into retirement, accidental death and dismemberment coverage cease.

If you were a medical center employee enrolled in the Prudential Basic Life insurance, your benefit at retirement will be $5,000.

Tax-Deferred Savings
If you have been participating in Fidelity, TIAA/CREF, Vanguard, or Security Benefit tax-deferred savings plans or the Commonwealth's 457 tax-deferred savings plan, you can elect to receive income at the time of retirement. Or, you may defer payments until April 1 of the calendar year following the year in which you attain age 70 ½ or following the year in which you retire, whichever is later. You may make arrangements by contacting the company(ies) directly at the telephone numbers shown below:

Fidelity Investments(800) 343-0860
Security Benefit(800) 888-2461
TIAA/CREF (800) 842-2776
Vanguard(800) 523-1188
ING(877) 327-5261

Appointments can also be made to meet with a campus representative from each vendor.

Payout of Unused Annual Leave

Staff
Employees will be paid for their accrued annual leave balance not to exceed the maximum payment amount when separating from state service by resignation (including resignation from layoff status), retirement, termination or death.

Employees may request and, if approved, use annual leave on their last scheduled workday before separation from state service, including retirement. Annual leave balances remaining after separation will be paid up to the maximum limit.

Medical Center
Employees will be paid for unused accrued PTO hours at 100% of the employee’s base rate of pay. 25% of the employee’s catastrophic leave balance, up to a maximum of $5,000, will be paid upon termination if the employee has five or more years of continuous service.

Return to Work Policy
VRS retirees who accept non-covered employment with the same employer must have a bona fide break in service to continue receiving their benefits. Non-covered employment includes temporary, part-time hourly and adjunct faculty positions that do not provide VRS benefits.

The Commonwealth of Virginia, including all state agencies and public colleges and universities, is considered one employer. Local school systems and political subdivisions are considered separate employers.

Before returning to a VRS non-covered position, you should:
  • Check that you have been terminated from the VRS-covered payroll for at least 30 days.
  • Have no pre-arranged employment commitment with the employer.
  • Ensure that you are not expected to perform all of the duties required of your pre-retirement, full-time position.
  • Evaluate the need for the position with your employer periodically if it does not have an end date.
  • Structure the position so that the hours worked is at least 20 percent less than a full-time position. Position descriptions should clearly define the difference between part-time and full-time positions requiring the same skills, experience and knowledge.
  • Employment at UVa in a wage position cannot exceed 1500 hours during a fiscal year calendar.
"Perks" For Retirees
  • Athletics - Retired staff may purchase season tickets for football and basketball based on the availability of tickets at the same rate as currently employed staff. Retired staff that had more than five years of service may purchase a pass for use of athletic facilities. (Intramural-Recreational Sports at (434) 924-3791; Ticket Information at (434) 924-8821.)

  • Birdwood - Any full-time staff member who retires is eligible to continue receiving the staff rate on membership. Proof of full-time staff status may be required if information is not on file at Birdwood ((434) 293-4653).

    Bookstore - A 10% discount on books is available to retired staff. The bookstore prefers that retired staff present an ID card ((434) 924-3721).

  • Colonnade Club - Retired faculty who were active members for at least ten consecutive years become "honorary" members and receives lifetime membership and all privileges at no cost. Other retired faculty may retain membership at full cost ((434) 924-3532).

  • Course Offerings - Any member of the community may take courses. Information concerning education benefits for senior citizens (60 years or older) is available from the Division of Continuing Education ((434) 982-5313).

  • Faculty I.D. Cards - I.D. cards may be obtained at the Card Office in Observatory Hill Dining Hall, Lower Level, 8:00 am - 5:00 pm, Monday through Friday at other than registration times. Those currently holding an I.D. card may have it updated. Only those retired faculty listed in the University Directory can be served ((434) 924-4508).

  • Library - Retired staff who can demonstrate that they are residents of Virginia may become cardholders at no cost.

  • Parking - Retired staff who are 65 years or older may purchase blue stickers at a reduced annual cost ((434) 924-7231). Emeritus faculty receives gold permits at no charge. You must provide Parking and Transportation with a copy of the letter indicating election to Emeritus status.

  • Research/Education Travel Program - Emeritus faculty may apply for limited travel grants each year through the office of the Associate Provost for Research ((434) 924-3606).

  • Retired Faculty Association - All retired faculty and spouses are eligible for membership (minimal dues). This organization facilitates communication with the administration and schedules special programs ((434) 924-3787).

  • Special Arrangements - Some departments and schools may make arrangements to satisfy specific needs of retired faculty. Interested retirees should inquire of the appropriate dean or department head.
  • University Foreign Travel Opportunities - Retired faculty may participate in this program sponsored by University Human Resources. Usually one trip is planned in the Spring and one in the Fall ((434) 924-4381).

For more detailed information, contact the Benefits Office at (434) 924-4392 or email benefits@virginia.edu.