Martin explains changes in VRS survivor options
By Doug Martin, human resources manager
Spectrum Volume 17 Issue 14 - December 1, 1994
Approximately four years ago, the Virginia Retirement System (VRS) underwent a study to determine if changes were needed in the survivor options available to retirees--partly based on the fact that individuals were living longer. Individuals retiring under VRS have had several choices of survivor options and these choices were recently expanded. State-wide, most retirees elect not to provide retirement benefits for survivors; however, at Virginia Tech, approximately one-half of retirees elect some type of survivor benefit.
The VRS study concluded that for those individuals who are over age 65 at the time of retirement and who elect one of the survivor options, the benefits should be reduced. Accordingly, a new retirement table was developed that provided slightly lower benefits in those cases where the retiree was beyond age 65 at the time of retirement and chose to provide for a surviving beneficiary.
In the same vein, the study concluded that for those individuals retiring before age 65 and electing a survivor option, the benefits should be slightly increased. This increase was also reflected in new retirement tables. After debate and discussion over the effective date for these different options, the decision was made during the last session of the General Assembly to make the effective date July 1, 1995. Individuals who continue to work beyond age 65 and plan to elect a survivor benefit will continue to increase their retirement benefits. However, the increase is not as great as it was under the previous formula.
Individuals retiring under age 65 and electing a survivor option will have a slight increase in benefits under the new formula. There are no changes for those individuals who elect the basic benefit--that is, one without any survivor options.
Individuals 65 years or older who had planned to retire during July-August 1995 and planned to elect a survivor option may want to consider retiring by June 1, 1995. For individuals planning to retire at later dates, the changes would be minimal and should not be a major consideration in the overall decision to retire. Individuals desiring a calculation of retirement benefits can contact Carolyn Pratt, Personnel Services, 1-7776. Pratt can also provide information on differences in retirement benefits based on the anticipated dates of retirement. Previous issues of the VRS Memo to Members addressed these changes and the forthcoming issue will also provide additional information regarding the nature of these changes. Any comments regarding these changes are welcomed.