On October 19, the VRS Board of Trustees certified an employer contribution rate of 15.68 percent for the teacher plan for the 2018-2020 biennium budget; this rate is lower than the General Assembly-approved FY 2018 contribution rate of 16.32 percent. Strong investment returns and payment of the full Board-certified rate in FY 2018 helped bolster the funded status of the plan and reduce its unfunded liability. Lower rates are anticipated to result in savings to both the state and localities, since the employer contribution for the teacher plan is shared in accordance with the Local Composite Index for positions recognized in the Standards of Quality (SOQ) (localities bear the entire cost of the employer contribution for positions they fund that are not recognized by the SOQ).
The VRS Board also certified an employer contribution rate of 1.20 percent for the teacher retiree health insurance credit (down from the General Assembly-approved rate of 1.23 percent in FY 2018) and 1.31 percent for group life insurance (the same as the General Assembly-adopted rate in FY 2018).
The General Assembly will adopt employer contribution rates as part of its consideration of the 2018-2020 biennium budget.
A presentation on the overall status of VRS given to the Senate Finance Committee by VRS Director Patricia S. Bishop is available here. The VRS Board is expected to certify contribution rates for political subdivisions at its November meeting.
VACo Contact: Katie Boyle