VIRGINIA: VRS HYBRID RETIREMENT PLAN

VIRGINIA: VRS HYBRID RETIREMENT PLAN

We’ve had several of our customers ask if we’re making changes to OpenRDA for the VRS Hybrid Retirement Plan that becomes mandatory for new employees hired on or after January 1, 2014. ?_ Normally, no changes to the software would be needed as it would only require your adding more deduction descriptions for this defined benefit (DB) and defined contributions (DC) retirement plan and assigning to those employees. ?_But, our review thus far indicates that the following will be needed:

new computation type for Payroll’s deduction descriptions for Elected Percentage of Retirement Salary. ?_We already have an Elected Percentage of Gross computation type but many of you are using (as recommended) the retirement salary (from the payroll job master). ?_The Elected Percentage computation type allows the percentage to be maintained in the employee’s deduction masters. ?_This is especially helpful when the percentages can be different by employee for employee contributions as well as for employer contributions. ?_It will supplement the existing Percentage of Retirement Salary (that requires the rate/percentage to be in the deduction description). ?_The new computation type will also be added to the payroll component of our Budget Prep module.
A new VRS Deduction Verification report for the hybrid plan. ?_This one has already been written (for release later this year) and will require the use of the Plan Identification field in the Deduction Description file (for VRS RET-DB MANDATORY, VRS RET-DC MANDATORY, and VRS RET-DC VOLUNTARY). ?_It will provide warnings for when the employee/employer percentages are not correct (e.g., when the total employee contribution exceed 9%; when the total employer contributions exceed the actuarial rate; when the employer percentage for voluntary contributions isn’t correct based on the employee voluntary contributions).
A contributions file for the third-party administrator, ICMA-RC (this will likely be a new payroll vendor for your organization as the contributions to the DC plan will be remitted to ICMA-RC while the contributions to the DB plan will be remitted to VRS). ?_VRS has indicated that ICMA-RC will be in contact with employers and employers’ software vendors very soon to provide the file format.
Deduction Setup Notes. ?_This document will indicate the computation type, deduction type, W2 deduction type, Plan Identification, etc. for the six deduction descriptions.

There will be more OpenRDA News articles as we implement the above and as we learn more about the new plan. ?_In the interim, please don’t hesitate to let us know if questions.

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