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A Publication for VRS Members
February 2020 | Archives

In This Edition



VRS Annual Financial Report in Under 90 Seconds

Increase your knowledge of VRS’ financial results, investment highlights and other statistics from fiscal year 2019. Watch this short video to get a recap on how we measured up this past year.

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Read the latest fiscal year highlights in the Popular Annual Financial Report (PAFR).PDF Icon

To take a deep dive into the detailed report on investments, finances and statistics, check out the Comprehensive Annual Financial Report (CAFR).PDF Icon

 

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Take the 10-Year Challenge… for Your Savings!

With a new decade underway, many people have taken to social media to participate in the #10YearChallenge. Participants post two photos of themselves—one from 10 years ago and one from today—and compare the differences. It can be fun to see how we’ve changed appearance-wise, but the #10YearChallenge can also be the perfect time to reflect on your personal finances and give yourself a 10-year challenge for the future.

Are your savings more robust now compared to 10 years ago? Do you have a plan for growing your savings even more over the next decade? If you plan to retire in the next 10 years, are you ready for that major life event? These are all great questions to ask yourself right now.

In conjunction with America Saves Week, February 24-29, here are some strategies you can use to make sure your next #10YearChallenge shows savings progress.

Save Automatically

As a VRS member, you are already making progress—your member contribution account grows with each paycheck! Your contributions, plus the 4% in interest accrued each year, mean you’ll have a major #GlowUp during your 10-year challenge.

If your employer offers the Commonwealth of Virginia 457 Deferred Compensation Plan, you can contribute up to $19,500 annually. As you near retirement, you may be eligible to contribute more in catch-up savings.

Hybrid Retirement Plan members: In addition to your mandatory contributions, increasing voluntary contributions will help your savings grow. You can contribute up to an additional 4% of your income to the defined contribution portion of your plan. Easily adjust your contribution amount in Account Access.

Save for the Unexpected

It’s great to have your eye on the future, but sometimes things happen in the present that cause you to shell out more cash than you planned. It happens to everyone at some point: your car’s transmission tanks on you, your refrigerator gives up the ghost, your pet needs emergency surgery.

According to a survey conducted by the Federal Reserve, nearly 40% of Americans who responded said they could not afford an unexpected expense of $400 without borrowing money, carrying a balance on credit cards or selling something to cover the cost.

Don’t let an inconvenient event sabotage your #10YearChallenge goals. Many financial experts recommend having three to six months’ worth of living expenses saved in an easily accessible account, such as a savings account. Even creating an emergency fund with just a few hundred dollars can go a long way as a buffer against taking on debt with high interest rates. This can be a good starting goal, and from there you can add more to your fund as you feel comfortable.

Save by Reducing Debt

Student loan debt isn’t just for the young anymore. Many people are still paying off student loans in their 40s, and some into their 50s and beyond. No matter how long ago you may have left school, you can use the Student Loan Snapshot in myVRS Financial Wellness.

Upload your student loan records and calculate different re-payment options, whether you want to tackle them head-on and pay them off faster, or make your monthly payment lower and pay over a longer period of time. You can also learn about relief and forgiveness options, and your eligibility for these programs. 

Save With a Plan

Balancing the everyday costs of life with saving for your future can be daunting, but it’s the little things that add up over time. A journey of a thousand miles starts with a single step, and reaching your savings and retirement goals can start with something as easy as logging into myVRS Financial Wellness. It’s never too early or too late to get started.

By using free VRS financial education tools right at your fingertips, you can build your financial confidence and make an action plan based on your goals. Simply log into your myVRS account, then click the Financial Wellness tab to begin.

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Hybrid Plan Members: Make Your Voluntary Contribution Changes by March 16

Did you notice the increase in your Hybrid Retirement Plan contributions in January? If you were hired before September 2019 and weren’t already contributing the maximum 4%, your voluntary contributions increased by half a percent with the auto-escalation feature. Auto-escalation won’t happen again until 2023, but did you know that you can make changes to your voluntary contributions each quarter?

Maybe you barely noticed the 0.5% increase and feel comfortable raising your voluntary contributions even higher to meet your retirement goals. When you make voluntary contributions, your employer provides a matching dollar amount. So when you make a maximum 4% contribution, your employer provides a 2.5% match. You have until 4 p.m. March 16 to make adjustments effective April 1.

To make changes, log into Account Access, click Select an Option next to the Hybrid 457 Deferred Comp Plan and choose Change Contributions.

On the same page, you can set up your own scheduled annual increases with SmartStep. It’s another way to gradually increase your savings over time, without having to wait three years for the next auto-escalation. Pick your annual increase amount, from 0.5% to 3.5%, and which month your increase will occur: January, April, July or October. Your contribution will increase each year until you reach the maximum 4%.

 

Spring Member Education Sessions Are Right Around the Corner

Spring will be here before we know it, and with it comes multiple dates for VRS workshops and seminars around Virginia. Space is limited so register today.

Click the course titles below to sign up for the following free member education classes at a location near you:

   
Course Description Dates
 
 Nearing Retirement
Workshop


For all members within five years of retirement
 
This half-day workshop features industry professionals who will provide resources to help prepare you for the transition into retirement. March 31 (Richmond)
April 7 (Wytheville)
April 28 (Fredericksburg)
April 30 (Portsmouth)
May 6 (Weyers Cave)
 
Are You Ready
to Retire?


For Plan 1 & Plan 2 members within five years of retirement
 
This presentation guides you through retirement decisions, such as when to retire and what retirement payout option is best for you.
 
 Building Retirement Security Workshop

For all members
 
This half-day workshop covers credit and debt management, protecting your finances and retirement planning. April 2 (Lynchburg)
April 30 (Chester)
 
 Are You on Track?

For Plan 1 and Plan 2 members
 
This presentation includes an overview of your VRS benefits and optional programs, purchase of prior service and member resources such as myVRS. 
 

To register for additional VRS courses and seminars, including recorded webinars on benefit topics such as the health insurance credit, visit the VRS Member Education page for your plan:

 

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What’s Your Money Personality? Visit myVRS Financial Wellness to Find Out

From the Myers-Briggs to the Enneagram, personality assessments can be a fun way to gain insight into our own psyche. So how about a personality quiz focused solely on how we approach our finances? Your Money Personality, available through myVRS Financial Wellness in your myVRS account, helps you explore the brain-wallet link and understand the “why” behind your money decisions.

It only takes about 15 minutes to take this free, in-depth assessment. Expect questions about your outlook, focus, influence and emotions when it comes to money. No matter your spending habits, there are no wrong answers, so it’s best to be honest.

Your answers help formulate an analysis tailored specifically to you. (This is much more detailed and thorough than your ordinary Facebook or Buzzfeed quiz.) In addition to being presented with your money personality, you can learn the strengths and weaknesses of each personality type. See how your results compare to others, and get recommendations on how to make your money personality work for you.

Take this opportunity to increase your self-awareness and gain control of your finances—take the money personality quiz today!

 

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2020 General Assembly Underway: Follow Legislation That May Affect VRS Members

The 2020 Virginia General Assembly convened January 8 for a scheduled 60-day session. The General Assembly is considering legislation that could affect VRS. Follow the progress of bills on the VRS Legislation page and look for a summary of VRS-related legislation in the May issue of Member News.

 

Federal SECURE Act Raises Required Minimum Distribution Age to 72 for Retirees

With the passage of the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, defined contribution plan members now have additional flexibility to begin receiving required minimum distributions (RMDs) from their defined contribution accounts. It’s something for members to bear in mind as they plan for retirement.

The SECURE Act increases the required minimum distribution age from 70½ to 72, effective January 1, 2020. Please note that this legislation does not affect those who reached age 70½ (the previous required minimum distribution age) on or before December 31, 2019 or, in other words, individuals with a date of birth of June 30, 1949 or earlier.

Deferred members who do not apply for retirement by April 1 following the calendar year in which they turn 72 must begin receiving a monthly benefit from VRS. If you are still employed in a VRS covered position at or beyond age 72, you will not receive a monthly benefit until you retire.

 
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Identity Protection Starts With Claiming Your Online Accounts

The single most important step you can take to protect your future retirement benefits from fraud is to claim your online accounts. By taking ownership of your myVRS and defined contribution accounts, you can more easily detect unusual activity and take quick action to prevent theft or mitigate losses.

Here are three key steps VRS members can take to safeguard against online fraud:

  1. Create strong, complex passwords for your accounts. Two-factor or multi-factor authentication is a top method for preventing unauthorized access to accounts.
  2. Keep antivirus and antispyware software up to date.
  3. Be aware of what is shared on your social media pages. Hackers can use profile information, photos and other content to gain unauthorized access to accounts or devices.

Visit the VRS Security Center page for online safety and fraud prevention tips.


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If the Worst Happens, What Benefits Are Available for My Loved Ones?

As a VRS member, not only are you building a foundation for your future, you also have a variety of benefit options available to help cover your loved ones if something were to happen to you. With these options, you can ensure your spouse, children or other loved ones have security and stability even in the worst-case scenario.

Naming a Beneficiary

First things first: Have you named a beneficiary? If you haven’t, or if you wish to change your beneficiary, fill out and mail a Designation of Beneficiary (VRS-2) PDF Icon to VRS. This form covers your defined benefit member contributions, as well as your VRS Group Life and Optional Life Insurance, if you are eligible. Visit the Naming a Beneficiary page to learn more.

If you participate in a Defined Contribution Plan, be sure to name a beneficiary for your accounts. You can designate a beneficiary online through Account Access or by calling ICMA-RC at 877-327-5261 and selecting option one. 

Death-in-Service Benefits

If you pass away as an active VRS member, a lump-sum payment of the balance in your member contribution account is available to your named beneficiary. For a non-work-related death in service, a named spouse, minor child or parent can choose to receive a monthly benefit rather than the lump-sum payment if you are vested.

For a work-related death in service, regardless of your vested status, your beneficiary will be eligible for a lump-sum payment and your spouse, minor child or a parent will be eligible for a monthly benefit, even if that person is not your named beneficiary. If one of these people is the named beneficiary, that person will receive a monthly benefit in addition to the lump-sum payment.

Beneficiaries of employees covered under the Virginia Line of Duty Act (LODA) may also be eligible for LODA benefits in the event the LODA-eligible employee dies in the line of duty.

Life Insurance

If your employer participates, you are automatically enrolled in the Basic Group Life Insurance Program from the first day of employment. Your natural death benefit amount is equal to your base salary rounded to the next thousand and then doubled. For an accidental death, your natural death benefit is doubled. See VRS’ Basic Group Life Insurance web page to learn about additional program features.

You can purchase additional coverage through the Optional Group Life Insurance Program, paying the premiums through payroll deduction. With optional coverage you can enhance your own coverage, as well as cover a spouse or dependent child. For more information on proof of good health requirements and events that qualify you to add a dependent, visit VRS’ Optional Group Life Insurance page.

Survivor Option

When thinking about your retirement, remember that you get to choose the payout option for your monthly benefit. If you want to provide a lasting source of income for a loved one, consider the survivor option. With the survivor option, your monthly benefit is lower during your lifetime in order for your survivor to continue receiving a lifetime monthly benefit after your passing. You can name any living person as your survivor, and you can name more than one survivor.

You choose a whole percentage of your benefit, between 10% and 100%, to go to your survivor. Your benefit amount is then based on this percentage, your age and the age of your survivor at retirement. See the Benefit Payout Options page for more details on the survivor option.

Get Organized

Regardless of your age, it’s a responsible move to organize your personal assets, expenses and documents now rather than later. Use VRS’ Get Organized guide PDF Icon to create an inventory of your records—this list will be helpful to those who handle your household, legal and financial matters. Along with your documents, you may want to include VRS’ Losing a Loved One brochure PDF Icon, which provides basic guidance for both newly bereaved families and those preparing for the loss of a loved one.

 
Member Education

Member Education

Classroom and webinar courses are posted on the VRS website as they are scheduled. Register from our Education and Counseling pages.

Retirement Planning
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