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Pension and OPEB Changes - FAQs
Frequently asked questions
NEWPORT NEWS EMPLOYEES' RETIREMENT FUND (NNERF)
| Pension |
Q. Is the NNERF plan being closed to current employees?
A. No. The NNERF plan is not being closed to current City employees. Based on the changes to the City Code, current City employees (hired prior to March 1, 2010) have an option to enter into the Virginia Retirement System (VRS). New hires and rehires hired on or after March 1, 2010 are automatically enrolled into VRS.
Q. What is Average Final Compensation (AFC)?
A. AFC is the average compensation paid to a member for the highest 36 consecutive months of service.
Q. Will the same AFC be used for both the 2% multiplier and the 1.85% multiplier?
A. Yes. The AFC will be the same for both the 2% multiplier and the 1.85% multiplier.
Q. If I terminate from the City with a vested benefit and was rehired, will my NNERF pension grow?
A. No. You will continue to have that vested benefit with the City. As a rehired employee after March 1, 2010, you will be automatically enrolled in the Virginia Retirement System (VRS).
Q. I am a vested employee in NNERF with eight (8) years of Credited Service. I understand that the vested years of service will remain in the NNERF. If I elect to go to VRS, how much of the eight (8) years of Credited Service will transfer to VRS and how much will it cost?
A. At this time, only VRS can determine how much of your time will transfer. More definitive information is forthcoming.
Q. Is there an impact to ICMA with the final pension changes passed by City Council on Tuesday, January 26, 2010?
A. No. The vote impacted the Pension and the OPEB plans only.
Q. How can I see my credited service with the City?
A. Refer to the Integrated Office System in CICS.
| Other Post Employment Benefits (OPEB): Retiree Medical & Life Insurance |
Q. If I decide to go to VRS, what will happen to the OPEB?
A. You will be enrolled in the Health Reimbursement Arrangement Plan (HRA). The City will contribute 3% of the average City employees’ salary. At retirement, the employee may enroll in the City’s medical plans but must pay 100% of the premium. There will not be any City premium contribution at retirement. Currently, the average salary of Full Time City employees is $42,831. The City’s contribution equates to $1,285 per employee per year. Funds will be invested in the employee’s name.
VIRGINIA RETIREMENT SYSTEM (VRS)
Q. What is VRS?
A. VRS is a defined benefit plan administered by an independent state agency. The City has elected mandatory VRS membership effective March 1, 2010 for new hires, rehires, and current employees who opt to enroll. If you are in VRS, this means that your retirement benefit is determined by a formula and is not based on the accumulated contributions in your account. The formula amount depends on your age at retirement, your average final compensation, and your years of service.
Q. What is the multiplier for VRS?
A. The VRS multiplier is 1.7% for employees other than Public Safety. For Public Safety employees, the multiplier is 1.85%.
Q. Where can I obtain additional information on VRS?
A. The web address for VRS is http://www.varetire.org/.
Q. Where can I complete a VRS estimate to determine future benefits due from VRS if I opt into VRS?
A. The web address is https://www.varetire.org/Members/Calculator . Select calculate now and 50/30 Retirement Provisions. Please note that this calculator provides only an ESTIMATE of potential benefits. Refer to the website for help in using this calculator.
Q. I am a current employee and considering opting into VRS. What do I need to do?
A. If you are considering terminating your membership in the City’s plan and opting into VRS, you need to attend consultation sessions with the Benefits Office. You have one year (last business day of February 2011) to decide to move to VRS.
Q. If I elect to go to VRS, can I change my mind?
A. No. Once the form is signed, you are a new member of VRS.
Q. Can City employees use leave exchange to purchase prior service credits in VRS?
A. No. This only applies to the NNERF.
Q. Is there a list of VRS frequently asked questions available?
A. VRS has FAQs on their website. Please refer to http://www.varetire.org/Members/FAQ/Index.asp.
Other Questions
Q. Will City employees be able to use ICMA withdrawals to buyback years from another city or state government for the NNERF plan?
A. Yes. Employees are eligible to use their ICMA to purchase prior service. You must be vested in the NNERF Plan before you can purchase the time.
Q. Will City employees be able to exchange PPL to contribute into the ICMA?
A. After July 1, 2009, employees can no longer exchange PPL for ICMA.
| Information continues to be forthcoming, so please continue to contact the Department of Finance at finance-concerns@nngov.com or 926-3929 for any additional questions. |
