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Virginia Government Finance Officers’ Association 2011 Spring Conference Virginia Retirement System Update for Local Government . June 10, 2011 Barry C. Faison, Chief Financial Officer. Agenda. Profile of VRS Members Funding the Benefit 2011 Legislation Review and Contribution Rates
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Virginia Government Finance Officers’ Association2011 Spring Conference Virginia Retirement System Update for Local Government June 10, 2011 Barry C. Faison, Chief Financial Officer
Agenda • Profile of VRS Members • Funding the Benefit • 2011 Legislation Review and Contribution Rates • Pension Reform Initiatives • VRS Modernization
VRS Overview • VRS is the 22nd largest public or private pension system in the U.S. • There are almost 600,000 members, retirees and beneficiaries.
VRS Total Membership As of December 31, 2010
Benefit Comparison Information obtained from the June 30, 2010 Actuarial Valuation.
Funding VRS Benefits C + I = B + E C = Contributions I = Investment Income B = Benefits Paid E = Expenses (administration) Bdepends on: Cdepends on: - Plan Provisions - Short-term: Actuarial assumptions - Experience Actuarial cost methods - Long-term: I, B & E • 68% of VRS benefit costs funded by investment earnings • 32% of VRS benefit costs funded by employee/employer contributions
Net Assets Available for Benefits Estimate as of 12/31/2010
Asset Allocation As of April 5, 2011
Funded Status: Teacher and Local Plans 2010 Valuation Assumptions: 7.00% assumed rate of return 2.50% inflation & 20-year amortization period
Employer Contributions Teacher Contribution Rates Local Contribution Rates – No change
Modernization Program Goals Provide more online tools and services for employers, members and retirees Streamline business processes Replace 20-year-old technology infrastructure and eliminate costs to maintain it Increase VRS and employer staff efficiency while maintaining superior customer service to a growing population
myVRS Navigator • Builds on the familiarity you already have with myVRS • Will replace the current tools you use today, such as the PC Package and WebER • Will be Web- and Windows-based
Changes to Employer Reporting • You will submit new employees and employee data changes only • Using the data you reported, myVRS Navigator will calculate: • employees’ creditable compensation and service credit • member and employer contributions • purchase of prior service costs • You will confirm contribution amounts and authorize your payment
Modernization Timeline • Summer 2011 • Employer pilot • Fall 2014 • Implementation of myVRS Navigator for members and retirees, including: • Online retirement application • Online refund application • Early 2012 • Employer batch certification begins • Employer training begins • March 2012 • Implementation of myVRS Navigator for employers, including: • Online enrollment and data maintenance • Contribution remittance • Contacts management • VRS-calculated creditable compensation and contributions Dates and activities may be added or adjusted as the program progresses.
Keeping You Informed • Webinars archived at www.varetire.org