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2010 SESSION

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SB 232 Retirement System; purchasing service at normal cost rate when person deemed member on July 1, 2010.

Introduced by: John C. Watkins | all patrons    ...    notes | add to my profiles

SUMMARY AS PASSED: (all summaries)

Virginia Retirement System; new employees. Modifies for new employees, all the defined benefit retirement plans administered by the Virginia Retirement System ("VRS"), as follows: (i) requires employees to contribute five percent of creditable compensation (only local employers would be allowed to pick up this contribution), (ii) increases the number of months used to calculate average final compensation from 36 to 60, (iii) increases the cost, and decreases the time in which employees may purchase certain prior service credits, and (iv) reduces the portion of the increase in the Consumer Price Index used for determining annual retirement allowance supplements ("COLA") from three percent plus one-half of the next four percent to two percent plus one-half of the next eight percent. The bill also decreases the Commonwealth's contribution for employees in institutions of higher education participating in an optional retirement plans from 10.4 percent to 8.5 percent of creditable compensation. However, institutions of higher education may provide an additional contribution up to 0.4 percent each year at their own cost.  New employees of institutions of higher education would also be required to contribute five percent of salary.

            In addition to these modifications, for new state and local employees covered under the main defined benefit plan, (i.e. excluding the separate plans for state and local law-enforcement employees and judges), the bill (a) changes the requirements for unreduced early retirement benefits from 50 years of age and 30 years of creditable service, to one whereby the sum of age plus years of service equals 90 and (b) sets the person's normal retirement date as his normal retirement date for federal social security.  The bill would allow reduced early retirement to be taken only by those persons who have attained the age of 60 with at least five years of creditable service.  Finally, for judges appointed or elected to an original term commencing on or after July 1, 2010, service as a judge would be multiplied by the weighted years of service factor of (i) 1.5 if the person was less than 45 at the time of such original term, (ii) 2.0 if the person was at least 45 but less than 55 at the time of such original term, and (iii) 2.5 if the person was at least 55 at the time of such original term.


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