The Virginia Savings Plan for Employees is a retirement savings program designed specifically for employees of the state of Virginia. It aims to provide a secure and tax-advantaged way for individuals to save for their retirement years. This plan offers various options and benefits to help state employees build a solid financial foundation for their future. One of the key features of the Virginia Savings Plan for Employees is the ability to contribute to the plan on a pre-tax basis. This means that participating employees can allocate a portion of their income to the plan before taxes are deducted, reducing their taxable income and potentially lowering their overall tax liability. The plan offers several investment options to suit the diverse needs and risk tolerances of state employees. Participants can choose from various funds such as bond funds, equity funds, and target-date funds. These funds are managed by professional investment companies, ensuring that employees have access to a wide range of investment opportunities. Additionally, the plan provides the option for employees to receive employer matching contributions. This means that for every dollar a participating employee contributes to the plan, the employer may also contribute a certain percentage or dollar amount, effectively boosting the employee's retirement savings. Furthermore, the Virginia Savings Plan for Employees allows participants to access their funds through loans or hardship withdrawals, providing some flexibility in case of financial emergencies or unforeseen circumstances. There are a few different types of Virginia Savings Plan for Employees, including the 457(b) plan and the 401(a) plan. The 457(b) plan is available to state and local government employees, while the 401(a) plan is specifically for higher education employees in the Virginia Higher Education Plan. In conclusion, the Virginia Savings Plan for Employees offers state employees a range of retirement savings options to help them secure their financial future. With its tax advantages, diverse investment options, and potential employer matching contributions, this savings plan provides a valuable opportunity for employees to build a strong retirement nest egg.
Virginia Savings Plan for Employees
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FAQ
The Basic Benefit is a monthly benefit in retirement based on your age, total years of service credit and average final compensation . The unreduced benefit is calculated using a percentage of your average final compensation multiplied by your total years of service credit.
As a VA employee, you are part of the Federal Employees Retirement System (FERS). Under FERS, you are eligible for monthly retirement benefits after just 10 years of Federal service. This retirement system is portable. If you leave Federal employment, the Social Security component carries over to your new employment.
To be vested (eligible to receive your retirement benefits from the Basic Benefit plan if you leave Federal service before retiring), you must have at least 5 years of creditable civilian service. Survivor and disability benefits are available after 18 months of civilian service.
You become vested when you have at least five years (60 months) of service credit. Vesting means you are eligible to qualify for retirement if you meet the age and service requirements for your plan.
Your retirement benefit is subject to federal income taxes as well as state income taxes if you live in a state that taxes income. The exception is if you retired under the guaranteed benefit formula for work-related disability.
Note: This option does not affect the amount of your Social Security benefit. You may also draw your Social Security when you are eligible for it, regardless of the age you choose for your VRS benefit to reduce.
The 403(b) and 457 savings programs allow you to: Save up to $22,500 annually for retirement in 2023. If you are 50+ you may save an additional $7,500 in 2023 up to $30,000. If you participate in the ORP, MCRP, or VRS plan, you are eligible for a cash match from UVA when you enroll in a 403(b) or 457 savings plan.
The Virginia Supplemental Retirement Plan (the "Supplemental Plan") is a 401(a) defined contribution plan that may be used by school divisions that are eligible to adopt the plan.