Employer Update

Among the new hires coming through your office, some could take advantage of a VRS program that may result in a bigger pension benefit or even the chance to retire sooner.

If employees served in the military or the federal government, took a refund after leaving another VRS-covered position, or have other eligible service such as educational leave, they may be able to transform that time into service credit.

The time purchased adds to the employee’s service credit and can:

• Help the employee become vested sooner to qualify for a future benefit.
• Increase a member’s monthly retirement benefit amount.
• Count toward the 15 years required for a member to qualify for the health insurance credit, if applicable, and the amount of the credit at retirement.

Counseling Points to Cover

Consider these ways to inform employees about the possible benefits of buying prior service:

• Point them to the Purchase of Prior Service webpage to watch a video on this topic, see a list of eligible service types and find other details.
• Encourage them to log in to myVRS to explore purchase options and evaluate the impact of purchasing service on their future retirement benefit, as well as the time it will take to recover the purchase cost in retirement.
• Let incoming employees know that acting now, rather than waiting, will reduce their costs. Employees may purchase their prior service at any point while an active VRS member. However, they have a two-year window of time, beginning at the start of covered employment or after a period of eligible leave, to purchase most types of service at a lower rate. After two years, the cost of service increases.
• There are several ways to make the purchase, including plan-to-plan transfers and payroll deduction.

Employer Tools

Authorized employer roles can use myVRS Navigator to assist members with:

• Adding eligibility for service. (If the member has refunded service before July 1, 1988, call VRS for assistance.)
• Selecting the service they wish to buy.
• Providing cost calculations, in most cases.
• Setting up purchase payment agreements.
• Setting up lump-sum purchases.

Questions?

The Purchase of Prior Service employer webpage provides links to current rate charts, job aids and available training.