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When employees are called to active duty military service, employers should review and communicate potential impact on VRS benefits and also take the necessary reporting steps as the employee goes on leave and later when the employee returns to the workplace.

The following benefits are available to employees:

Service Credit Purchase of Prior Service Disability Retirement VSDP and VLDP Death-in-Service Health Insurance Basic Group Life Insurance Optional Life Insurance DC Plans

Service Credit

  • While the member is in leave-without-pay status for active duty military service, do not report contributions to VRS. Mark the employee on leave without pay in myVRS Navigator.
  • Be sure to keep the employee's salary up to date in myVRS Navigator. The salary entered should be the salary that would have been paid had the employee not been on active duty military leave.
  • Mark the employee as Active in myVRS Navigator when he or she returns to work from leave.
  • A member called to active military service is eligible for service credit for the time served. The credit counts toward becoming vested in the retirement plans, eligibility for retirement and the health insurance credit.

Purchase of Prior Service

If the member goes on active duty military leave while in the process of purchasing service:

  • After-tax purchase of service agreements terminate after two months if payment is not received. The member must reapply to purchase the remaining service.
  • Pretax purchase of service agreements freeze in an active status while the member is on leave without pay; no payroll deductions can be made. Deductions should resume immediately upon a member’s return to active employment in a VRS-covered position.

When the member returns to employment:

  • Service credit is granted at no cost, provided the member's discharge is other than dishonorable and the member returns to covered employment within a year of discharge from active duty.
  • The member must submit a copy of the DD214 and apply for the service by completing an Application for Purchase of Prior Service Credit VRS-26.
  • Certify eligible active duty military leave in myVRS Navigator for each period of active duty service.

Disability Retirement

  • Eligible VRS Plan 1 and Plan 2 members may apply for disability retirement at any time while on military leave.
  • A member on military leave without pay who suffers a disabling condition who is eligible for disability retirement may apply even if the leave without pay period exceeds 24 months.

VSDP and VLDP

Under the Virginia Sickness and Disability Program (VSDP) and Virginia Local Disability Program (VLDP):

  • A member on military leave with pay who becomes ill or injured may use any available leave to cover the period of illness or injury. If eligible, the member may also be entitled to short-term and long-term disability benefits.
  • A member on military leave without pay who becomes ill or injured may not use any available leave to cover the period of illness or injury. The member may only use leave and, if eligible, be covered by VSDP if reinstated to pre-leave employment status.
  • Disability benefit payments are not offset by military disability benefits.

Death-in-Service

  • Eligibility continues while on leave without pay for active duty military service.
  • If the beneficiary is a spouse, minor child or parent, the beneficiary may choose either a lump sum in the amount of the member contribution account plus interest or a monthly benefit amount.
  • If the beneficiary is not a spouse, minor child or parent, a lump sum in the amount of the member contribution account plus interest will be paid.

Health Insurance

  • Coverage is the same as that during regular employment.
  • For state employees, continue to pay the employer portion of the premium. Members pay the cost of dependent coverage.
  • The Uniformed Services Employment and Reemployment Rights Act (USERRA) applies to all employers and provides for up to 24 months of continued health insurance coverage for members who are on military leave.

In addition, COBRA provides for 18 months of coverage, with further extensions for certain events. COBRA applies to group health plans maintained by employers with 20 or more employees. If an employer is too small to be subject to COBRA, the plan’s insurer may be required to provide coverage.

Basic Group Life Insurance

  • A member on military leave without pay may continue coverage for the duration of the leave period as long as the premiums are paid.
  • If the premium is not paid, coverage ceases during the leave period but is reinstated once the member returns to a covered position.
  • If the member pays the premium, collect and submit the premium to VRS for the member.
  • If the employer pays the premium, submit the premium to VRS.
  • No accidental death and dismemberment benefits are payable if death results from an act of war.

Optional Life Insurance

  • A member on military leave without pay may continue optional life coverage for the duration of the leave period as long as the premiums are paid.
  • If a member does not pay the required premium, coverage ceases during the leave period.
  • A member may drop optional coverage while on leave without pay for active military service and be reinstated without having to provide evidence of insurability for the same or lesser amount. Payroll deductions must resume immediately upon reemployment in a VRS-covered position.

Defined Contribution Plans

The pension protections under the Uniformed Services Employment and Reemployment Rights Act (USERRA) also extend to VRS defined contribution plans, including:

  • Defined contribution component of the Hybrid Retirement Plan
  • Commonwealth of Virginia 457 Deferred Compensation Plan
  • Virginia Cash Match Plan
  • Optional Retirement Plan (ORP)

After you certify the employee's military service:

  • Employees will have time served granted as VRS service at no cost.
  • Employers are required to submit mandatory employer contributions for the Hybrid Retirement Plan or an ORP, if applicable.
  • Employees may choose to make up any mandatory or voluntary employee contributions.
  • Email dcplans@varetire.org for assistance with make-up contributions to a VRS defined contribution plan.

To ensure an employee's military service is accurately recorded and benefits correctly applied as required by USERRA, it's essential to take the necessary reporting steps when the employee goes on leave, and later when the employee returns to the workplace.

Reporting Steps in MyVRS Navigator

  1. When military leave begins, mark the employee on leave without pay. Select the Active-Duty Military Leave option.
  2. Do not report contributions to VRS while the employee is in leave-without-pay status. However, do keep the employee's compensation up to date in myVRS Navigator. Always enter the compensation that would have been paid had the employee not been on active-duty military leave
  3. Upon return to work, mark the employee as Active in myVRS Navigator.
  4. Employees called to active-duty military service are eligible for VRS service credit for the time served. When an employee returns to active employment, ask the employee to provide you with the Form DD 214 (Report of Separation) so that you can certify eligible active-duty military leave in myVRS Navigator. You must confirm the employee has met all USERRA return-to-work qualifications.
  5. If while on leave the employee was entitled to any annual compensation changes, separate periods of eligibility must be created each time the annual compensation changes.