Employer Update

Many employees are seeing a bump in their paychecks this summer. As an employer, you can help workers build a more comfortable retirement by encouraging them to “save the raise”—or at least a fraction of it—in their defined contribution retirement accounts.

Encourage employees to increase their contributions to the:

• Hybrid 457 Deferred Compensation Plan.
• Commonwealth of Virginia 457 Plan, if available.

Changes must be submitted by 4 p.m. on the last business day of the month to take effect the following month.

Voya, the VRS DCP record keeper, offers a suite of digital tools to help employees develop, revise and refine their retirement strategies.

As you communicate with employees this summer, spotlight the following free tools Voya offers to help with near-term and long-term planning:

• The Paycheck Calculator shows how saving all or a portion of a raise will affect current take-home pay. Contributions are tax-deferred, allowing employees to pay less in taxes now.
• The myOrangeMoney Retirement Calculator helps employees see how the extra money they save today will boost their future monthly income in retirement.

When employees choose to pay themselves first and prioritize savings, they’re increasing the likelihood of having higher income in retirement.

Here are additional savings tips to pass along to employees:

• Looking for a gradual savings approach? VRS defined contribution plans offer SmartStep, an automatic savings feature to help members increase their savings over time.
• Hybrid Retirement Plan members should maximize their contributions to Hybrid 457 Deferred Compensation Plan first to receive the employer match before contributing to the Commonwealth of Virginia 457 Plan.