A COMPARISON OF VIRGINIA RETIREMENT PLANS School Board Meeting December 12, 2014

Comparison of VRS Plans Plan 1Plan 2Hybrid Employees hired before July 1, 2010 Defined Benefit Plan 5% employee contribution Employees hired on or after July 1, 2010 Defined Benefit Plan 5% employee contribution Employees hired on or after January 1, 2014 Defined Benefit AND Defined Contribution Plan Minimum 5% contribution (4% DB and 1% DC with option to increase DC Additional 4%)

Comparison of VRS Plans Plan 1Plan 2Hybrid Vested – 5 years Age/Service – 50/30 Avg Final Compensation is highest 36 consecutive months Vested – 5 years Age/Service = 90 (i.e. 60/30) AFC is highest 60 consecutive months Vested – 5 years Age/Service = 90 AFC is highest 60 consecutive months

Comparison of VRS Plans Plan 1Plan 2Hybrid Retirement multiplier is 1.7% Example: AFC $50,000 Mult X.017 Serv X 30 Annual = $25,500 ÷ 12 Monthly = $2,125 Retirement multiplier is 1.65% Example: AFC $50,000 Mult X.0165 Serv X 30 Annual = $24,750 ÷ 12 Monthly = $2,065 Retirement multiplier is 1.0% Example: AFC $50,000 Mult X.01 Serv X 30 Annual = $15,000 ÷ 12 Monthly = $1,250 *DC will be added income

Comparison of VRS Plans Plan 1Plan 2Hybrid Eligible for Disability Retirement Virginia Local Disability Plan - No Eligible for Disability Retirement VLDP - No NOT eligible for Disability Retirement VLDP – Yes (short term and long term)

Short Term Disability Illness, injury, surgery, pregnancy or other chronic health conditions qualify Maximum coverage is 125 work days Employees receiving short term disability are still active employees and receive all benefits, including: SL, AL, Raises, Creditable Compensation toward retirement Benefit begins after seven calendar days of absence

Short term Disability payments Months of continuous Service # Workdays of Income Replacement at 100% # Workdays of Income Replacement at 80% # Workdays of Income Replacement at 60% months* months months months more months *This is applicable to each VRS Employer. If the employee changes school divisions, the continuous service starts over.

Long Term Disability Benefits begin after receiving 125 days of short term disability benefits (claim reviewed prior to end of 125 days) Benefit is 60% of pre-disability earnings OR 80% for catastrophic conditions (may be reduced by certain sources of “other income” earned while disabled such as WC, other insurance plans, social security)

Hybrid Retirement Opt-In All Plan 1 and 2 Employees may opt-in to the Hybrid Plan. Opt-In enrollment period is Jan. 1 – April 30, 2014 Opt-In is irrevocable after July 1, 2014 Retirement Benefit calculations based on both plans (i.e. 10 years under Plan 1 and 20 Hybrid years)