The Hybrid Retirement Plan has two components and distinct accounts where contributions are deposited. Review the illustrations below to see how an employee’s future benefit is comprised.
The Defined Contribution Component
The defined contribution component of the plan consists of two accounts:
- A 401(a) account for mandatory employee and employer contributions, and employer matching contributions.
- A 457 account for voluntary employee contributions.
Similar to a 401(k), these accounts provide a balance based on contributions and investment performance to draw from in retirement. Federal tax rules require different contribution types to be placed in separate accounts.
Employees can take full advantage of the plan features by making the maximum 4% voluntary contribution, which allows them to receive the maximum 2.5% employer match.
Defined Contribution Component
The Defined Benefit Component
The defined benefit, or pension, component of the hybrid plan provides a lifetime monthly benefit based on a formula once an employee meets eligibility requirements for retirement.
The employee’s 4% contribution is placed in the Member Contribution Account and helps fund their monthly retirement benefit. Employers also make contributions to fund benefits for eligible members. VRS manages the investments for the defined benefit component.
Defined Benefit Component
Point employees to the VRS website to learn more about the hybrid plan:
- Access their individual myVRS and DCP accounts to see fund balances.
- View short videos on the Hybrid Plan Learning Channel.
- Find plan details in the Hybrid Retirement Plan handbook.
- Explore the Hybrid DCP website for calculators and other resources from Voya Financial.
