Retiring with the
VCU Optional Retirement Plan (ORP) for
Faculty
Office of Employee Benefits
2015
Objectives and Agenda
• Making Distribution Elections
• Retiree Health Care and Life Insurance
ORP Retirement Basics
About the VCU Optional Retirement Plan (ORP)
• A defined contribution plan (401a)
• Funds available depend upon investment performance
• Retirement distributions are arranged with your
investment company provider, and must be approved by
VCU
• Required minimum distribution starting at age 70½
ORP Retirement Basics
When will I be eligible for distributions?
• There is no minimum age or service requirement to begin
distributions
• No distributions while employed.
• Must separate from all state service
• Penalties may apply for non-periodic distributions prior to age 55
ORP Distributions
Minimum Distribution Requirement
• If you have terminated your state employment, you must begin to receive your
retirement distribution no later than April 1 following the calendar year in which
you turn age 70½
Distribution Types
•
•
•
•
•
Lifetime annuity
Joint and survivor annuity
Systematic fixed installment payments over a term you specify
Single lump sum payment
Must meet certain Section 401(a)(9) rules
Making Your ORP Distribution Election
Consult your ORP Investment Company Provider
• TIAA-CREF and Fidelity On-Campus Schedule
• Investment Company Web Sites and Phone Contacts
• Submit your completed distribution election form to
VCU Benefits for approval signature
• If you are electing retiree health care, obtain a letter
from your investment provider confirming that you have
elected an immediate periodic distribution.
Investment Company Representatives @ VCU
http://www.hr.vcu.edu/benefits/benefits-list/retirement/individual-counseling
Health Benefits
• Benefit-eligible employees will have the opportunity to enroll in
State Retiree Health Benefits Program at the time of retirement.
• A retiree must enroll within 31 days of retirement unless he/she is
covered under another state employee’s plan. Documentation of
waiver for this reason is required to preserve future enrollment
eligibility.
• To be eligible for the State Retiree Health Benefits Program, you
must immediately begin a periodic distribution or annuity from
your ORP account.
• If you defer distributions from your ORP account or take a nonperiodic distribution (including a full distribution or full rollover),
you will forfeit eligibility for the State Retiree Health Benefits
Program.
• Anthem bills participants directly for retiree health coverage.
Health Benefits
COVA Care, COVA HealthAware, COVA HDHP, Kaiser HMO
•For retirees and enrolled dependents not eligible for Medicare
•Same plan and options available for active employees
•Retiree pays full premium (see rate sheet)
TRICARE Supplement Plan
•For non-Medicare eligible retirees who are military retirees, or spouses/surviving
spouses of military retirees, and who are eligible for TRICARE military health
benefits
Advantage 65
•For retirees and enrolled dependents eligible for Medicare
•Supplements Medicare
•Retiree pays premium (see rate sheet)
Health Benefits
Part A – Hospital and
Skilled Nursing Coverage
Part B – Physician and
Medical Coverage
Medicare Pays
Advantage 65 Pays
• Fixed number of hospital and nursing
home days at 100% after deductible
•Additional hospital and nursing home
days with % paid by participant
•Additional lifetime reserve days until
exhausted
• Part A deductible except first $100
•Participants % of Medicare
additional hospital and nursing home
days
•% of additional hospital and nursing
home days after Medicare exhausted
• Generally 80% of Medicare-approved
outpatient visits
• An annual deductible may apply
•Remaining 20% of Medicareapproved outpatient visits
Health Benefits –Prescription Drug Program
Part D – Prescription Drug
Coverage
Medicare
Advantage 65
• Pays a benefit based on the specific
Part D plan in which the beneficiary is
enrolled. Generally limited by annual
$ maximum unless catastrophic cost
level reached.
•Enhanced prescription drug plan,
with no annual maximum.
•Annual deductible for brand-name
drugs. No deductible for generics.
•See handout.
You may elect Advantage 65 with
prescription drug coverage only at
retirement. You cannot later add
prescription drug coverage to a
Medical Only plan.
Health Benefits – Dental/Vision Option
Dental and Vision
Coverage
Medicare
Advantage 65
• Generally provides no coverage for
these services
Retiree Blue View vision program
administered by Anthem.
Retiree routine dental program
administered by Delta Dental. Does not
include coverage for prosthetic or
complex restorative services. Expanded
dental coverage is not available to
Medicare-eligible retirees.
Dental/Vision Option can be elected at
retirement or added once later. Once
canceled, re-enrollment is not available.
Important Notice About Prescription Drug
Coverage for Medicare-Eligible Retirees -continued
If you enroll in Advantage 65 prescription coverage more
than 3 months after your 65th birthday, Medco will send
you a letter warning that you are a late enrollee and
subject to penalty.
If you have been continuously enrolled in the State Health
Benefits Program from your 65th birthday until your
retirement, you may disregard this letter.
Important Notice About Prescription Drug
Coverage for Medicare-Eligible Retirees -continued
The warning letter will include the following statement:
“If you had continuous coverage through the
Commonwealth of Virginia Health Benefits Program
since your Medicare eligibility, the Commonwealth of
Virginia Department of Human Resource Management
will attest to your coverage, and you may disregard
this notice.”
Important Notice About Prescription Drug
Coverage for Medicare-Eligible Retirees -continued
If you were enrolled in any plan other than the State
Health Benefits Program between your 65th birthday and
your retirement, you will need to provide proof that you
had creditable prescription drug coverage (i.e. coverage at
least as good as Medicare Part D) during that period.
Contact VCU Benefits for a “Proof of Creditable
Prescription Drug Coverage” letter if required.
Health Benefits
VRS Health Insurance Credit
•Available for employees who have 15 or more years of VRS
service.
•Credit is $4 for every year of creditable state service. No cap.
•Credit amount is paid to you by check from VRS to assist you in
paying your monthly retiree health coverage premium. VRS will
periodically require that you provide proof of an ongoing periodic
distribution in force from your ORP.
Life Insurance
Basic Group Life Insurance - after retirement
• If your membership date in the ORP or VRS is prior to July 1,
2010, and you have at least five years of state service and you
are at least age 55+, or at least 10 years of service and age 50+,
you are eligible to retain your life insurance benefit.
• If your membership date in the ORP or VRS is July 1, 2010 or
later, and you have at last five years of service and are at least
age 60+, you are eligible to retain your life insurance benefit.
Life Insurance
Basic Group Life Insurance - after retirement
•Natural death benefit and accelerated death benefit continue at no
cost to you.
•Your life insurance begins to reduce 25% on January 1 each year
after one full calendar year of retirement.
•Example: If you retire July 1, 2014, your life insurance would begin
to reduce on January 1, 2016. A total policy worth $100,000 will
reduce 25% each year until it’s final value of $25,000.
•If you take a full distribution (including a full rollover) of your ORP
account, your life insurance coverage terminates.
Leave Payments
• Annual Leave is payable up to the maximum allowed by policy.
You may defer your leave payment to the Virginia Deferred
Compensation Plan (DCP) if you are a participant when you
retire. If you do not defer leave payment, VCU Payroll Services
aggregates final pay with leave payment and taxes total payment
accordingly. You may adjust your tax withholding elections prior
to retirement.
• No payout for sick leave
Reemployment of Retirees
• Must have a break in Commonwealth of Virginia employment of at least
one full calendar month (between time of retirement and new
employment in a non-covered position) during a period in which you
would normally have worked in the position from which you retired;
• For 9/10-month contracts, break in service begins when you would
have returned for next contract;
• Must not have a pre-arranged agreement to return to Commonwealth of
Virginia employment (including VCU Health System); and
• Must not be hired to perform the identical job duties from which the
employee retired.
• The re-employment agreement must be for a limited term (can only be
hired into an hourly or adjunct position unless you stop retirement
benefit). Re-employment at VCU requires VP approval.
Reemployment of Retirees
•It’s important that retirees not be re-employed in non-covered positions
with state agencies for more than 1,664 hours annually.
•1,664-hour cap is imposed by IRS regulations. (IRS regulations dictate
that such an employee must not work more than 80% of his/her previous
full-time job. 80% of 2,080 hours = 1,664.) VCU policy limits hourly
(wage) employment to 1,500 hours per year.
•Retirees may contact VCU Work/Life Resources (worklife@vcu.edu), after
one full calendar month break in service, regarding part-time work
opportunities.
Process of Retirement
•Determine retirement date:
-must be the first of the month.
(9-month faculty generally must retire during or at the end of the academic year:
June 1 to be eligible for the State Retiree Health Benefits Program)
•Complete retirement forms and submit to VCU Benefits.
•VCU Benefits submits health insurance credit form to VRS
•VCU processes retiree health care enrollment
•VCU approves ORP distribution request and returns approval form
to employee for submission to investment company
Retirement Forms
Required Forms
•
Investment Company Distribution Forms (TIAA-CREF and/or Fidelity)
•
Acknowledgement of Eligibility Requirements
•
Termination Certification Form (ORP for Higher Education) (VRS-65D)
•
State Retiree Health Benefits Program enrollment form (to elect or waive)
Additional Optional Forms
•
Designation of Beneficiary (VRS-2) – for retiree life insurance
•
ORP Health Insurance Credit Certification (VRS-75) (if you have 15+ years service)
•
Letter from ORP investment company confirming periodic distribution (if electing retiree health
care)
•
Salary Reduction Agreement (SRA) and/or DCP Payroll Authorization form to stop deferrals to
TDA and DCP
•
LTD Conversion Request (Standard Insurance Company)
VCU Benefits Available for Retired Faculty
• Retired faculty benefits are available if your department
maintains you in Banner as a non-employee Affiliate.
These benefits include parking, discounts and free
tuition at VCU.
• Confirm your Affiliate status with your department, and
then request a Retiree ID Card authorization from VCU
Human Resources.
Additional Resources
State Resources
• Virginia Center on Aging
• Virginia Department of Human Resource Management (DHRM)
Other Agencies
• AARP
• Elder Care Locator
• Elderhostel
• IRS
VCU Employee Benefits Office
•Daniel Jason
•Daynon Smith
•Lauren Mortensen
•Sherri Page
804-828-4660
804-828-5371
804-827-1723
804-828-9651
djason@vcu.edu
dasmith1@vcu.edu
lcmortensen@vcu.edu
sbpage@vcu.edu
E-Mail: benefits@vcu.edu
Phone: (804) 827-1723
Web: www.hr.vcu.edu/benefits/retirementplanning.html
Questions