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The Virginia Retirement System

The Virginia Retirement System. Participation in VRS’ Virginia Sickness and Disability Program Presented By Ben Howard – Employer Representative The Virginia Retirement System. The Virginia Retirement System. Agenda

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The Virginia Retirement System

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  1. The Virginia Retirement System • Participation in VRS’ • Virginia Sickness and Disability Program • Presented By • Ben Howard – Employer Representative • The Virginia Retirement System

  2. The Virginia Retirement System • Agenda • Possible Legislation on VSDP-like Program for Local Governments and School Divisions • Overview of the Virginia Sickness & Disability Program for State Employees

  3. How it Started • VML and VACO in 2001 expressed interest to VRS to open VSDP to local governments only. • VML/VACO sought a sponsor for the legislation, but due to the climate surrounding budget issues were not successful. • VRS, VML and VACO continued to work together on legislation that would be tailored to the local government employer. • 2003 VRS received a formal request from Delegate Tata of the Compensation and General Government Subcommittee of the House of Appropriations to draft legislation for VSDP-like benefits for local governments and school divisions.

  4. Localities and School Divisions • VSDP-Like Program

  5. Work Group Meetings • The Virginia Sickness Disability Program (VSDP) Local Government and School Divisions Workgroup was formed to draft language for the legislation • Work group held seven meetings to draft language and design the program • Legislative Services will put into final form to submit to the the General Assembly

  6. Local/School Division Plan • Coverage will be elective by the employer • Accrued sick leave conversion allows employees who come into the program to convert accrued sick leave to disability credits and at termination convert the remaining credits to VRS service credit at rate of • 173 credits = 1 mo of Svc • Career service (for sick leave and income replacement purposes) will be defined by the electing locality/school board

  7. Work Group Participants • Department of Education Rockingham County • VRS VASPA • Legislative Services VEA • Kaufman & Canoles Henrico County • City of Virginia Beach Matthews County SB • Fauquier County Palmer & Cay • VACO Core, Inc. • VML Gabriel, Roeder, • Smith • Front Royal Va. School Board • Assoc. • Chesterfield County VASS

  8. Why the State Changed • Workforce Commission Study in 1995 • Lack of short-term disability coverage • Average state employee had sick leave balance • of just over one month • Employee may have no income after using up • sick and annual leave

  9. The Virginia Sickness & Disability Program • 1998 legislation established VSDP • Biggest change in state employee benefits in 40 years • Affected 86,000 state workers initially in 250 state agencies, colleges and universities • Employees hired on or after 1/1/99 were automatically covered • Employees hired prior to 1/1/99 could chose between the old program and VSDP

  10. VSDP Disability Program Objectives • Provide short-term/long-term and catastrophic protection • Simplify and make disability benefits more understandable • Relate income replacement to state service • Help disabled recover and encourage return-to-work • Provide greater flexibility in plan administration

  11. Full-time state employees who are active members of the Virginia Retirement System (VRS) Active members of SPORS (State Police Officers’ Retirement System) and the Virginia Law Officers’ Retirement System (VALORS) Full-time teaching, research or administrative faculty of a state institution of higher education who elected VRS retirement Qualified part-time classified state employees who are active in VRS Eligible State Employees

  12. Benefit Features Short-Term Disability & Long-Term Disability 80% Familyand Personal Leave Sick Leave 60% 60% STD Benefit LTD Benefit NormalRetirement Income Replacement (Income replacement based on length of service, starting on 8th calendar day) (Combined total of up to 15 workdays Number of days varies based on length of service) Death 26 Weeks

  13. Other BenefitFeatures • Sick leave and family/personal leave allotment • Family and Personal leave • 4-5 Days of Family and Personal Leave • Short-term disability • 5-10 days of Sick Leave based on career service with the employer • Long-term disability • Work-related, short- and long-term disability benefit as supplement to Workers’ Compensation coverage • Social Security advocacy • Formal Return-to-Work & Compliance Programs

  14. Benefit Features • Independent medical examinations • On-site medical and vocational rehabilitation • Service accrual during long-term disability until age 65 • COLA adjustment during long-term disability which enhances creditable compensation for future service retirement and long-term disability benefit • Service retirement conversion at age 65 (age 60 for hazardous duty employees) • Employer paid long-term care coverage

  15. Return-to-Work Program • Encourages return-to-work through vocational rehabilitation services • Third-party administrator works with employee, employer and treating physician to coordinate return-to-work • Job modifications where appropriate

  16. Non-Compliance/ Fraud and Abuse Program • Requires participants comply with the program • Code of VA provides for 50% to 100% reduction in benefits if non-compliant • Investigation of possible fraud reported

  17. Long-Term Care • All employees participating in VSDP • Employer-paid coverage • Benefit of $75 a day for up to 2 years • Coverage is portable upon termination or retirement

  18. Disability Standards • Partial and total disability • First 24 months of disability (6 months short-term and 18 months long-term) “Own occupation.” • After 24 months of disability “Any Occupation” provided not earning 80% or more of pre-disability income.

  19. VSDP Disability Coverage • Income replacement based on a percentage of pre-disability income and months of career service with the employer • Can be permanent/temporary • Can be total/partial • Full-time & part-time classified employees • Coordinate with Virginia Workers’ Compensation Act benefits • Disability credits provided for accrued sick leave balances

  20. Services Furnished by Third-Party Administrator • Short-term disability claims management • Independent Medical Examiner first and second level appeals processes • Social Security filing assistance • Long-term disability claims management • Return-to-work coordination and vocational rehabilitation • Social Security advocacy • Coordination with Workers’ Compensation • Coordination with long-term care vendor

  21. Questions & Comments

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