Employer Update

In October, the VRS Board of Trustees will certify to the governor and General Assembly fiscal year 2027 and 2028 contribution rates for statewide retirement plans and some post-employment benefit plans.

The action helps sharpen the picture for budget-writers at the state level and in localities and is a critical step toward maintaining the long-term health of the plans.

State law (§ 51.1-145) requires VRS to set employer contribution rates “in a manner so as to remain relatively level from year to year.” At the same time, VRS must ensure future contributions and current plan assets remain on track to fund all benefits promised to members and beneficiaries.

Every year, VRS and the plan actuary review trends in the member population, including hiring, retirements, salaries and other changes. In addition, the actuaries review performance relative to the plans’ economic assumptions. These trends influence the overall funded status of pension and other post-employment benefit plans. VRS’ annual investment earnings fund approximately two-thirds of member benefits. In odd years, actuarial valuations determine employer contribution rates for the next two years.

Here’s a snapshot of the rate-setting steps ahead:

October 2025

The plan actuary will present to the VRS board the recommended contribution rates for:

• State employee plan.
• Teacher plan.
• State Police Officers’ Retirement System (SPORS).
• Virginia Law Officers’ Retirement System (VaLORS).
• Judicial Retirement System.
• Other post-employment benefit plans, including group life insurance, the health insurance credit for State and Teachers and the Virginia Sickness and Disability Program.

Following board action, VRS will update the contribution rates webpage with the VRS board-certified rates. However, statewide pension and other post-employment benefit plan rates could undergo further revision during the 2026 General Assembly session. Rates are not final until the state budget is approved next year.

November 2025

The VRS board will certify contribution rates for all political subdivisions, the Virginia Local Disability Program (VLDP) and the Line of Duty Act (LODA).

Employer contribution rates provided for non-professional school board and political subdivision plans, including VLDP and the health insurance credit for political subdivisions, are final once certified by the VRS board.

December 2025

The governor will present his biennial budget, including a recommendation regarding the funding of the VRS-certified contribution rates for statewide plans and other post-employment benefits.

January 2026

VRS uploads actuarial valuations for all political subdivisions to myVRS Navigator, including the retirement contribution rate along with rates for the health insurance credit, if applicable.

Spring 2026

Final VRS contribution rates will be available at the conclusion of the General Assembly session.