When a member retires, his or her benefit is paid first from the member contribution account. After these funds have been paid out, the benefit is funded from a separate contribution that the employer makes to VRS and investment earnings.
The member receives the retirement benefit in the form of a monthly benefit according to a payout option the member chose when applying for retirement: Basic Benefit, Basic Benefit with Partial Lump-Sum Option Payment (PLOP), Survivor Option, Survivor Benefit With PLOP or Advance Pension Option. The payout option the member elects at retirement is irrevocable. The member cannot change it after retiring, except for the Survivor Option under some conditions.
The Basic Benefit is a monthly benefit in retirement based on age, total years of service credit and average final compensation. The unreduced benefit is calculated using a percentage of the average final compensation multiplied by total years of service credit. This percentage is called a retirement multiplier.
With this option, the member elects to receive a lower monthly benefit during his or her lifetime so that a survivor can receive a monthly benefit after the member’s death. A member can name any living person as a survivor; he or she also can name more than one survivor.
If a member selects the Basic Benefit or the Survivor Option and works at least one year beyond the date he or she is eligible for an unreduced retirement benefit, the member may elect to receive a one-time Partial Lump-Sum Option Payment (PLOP). This option reduces the monthly benefit.
With this option, the member elects to temporarily increase the monthly retirement benefit. The temporary increase begins at retirement and continues until an age the member chooses, between age 62 and normal retirement age under Social Security. At the age he or she selects, the retirement benefit permanently reduces.