Retiring With the VCU Optional Retirement Plan (ORP) for Faculty

1. Retiring With theVCU Optional Retirement Plan (ORP) for Faculty Office of Employee Benefits VCU Human Resources 2014

2. Objectives and Agenda • Making Distribution Elections • Retiree Health Care and Life Insurance

3. 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

4. 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

5. 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

6. 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.

7. Investment Company Representatives @ VCU http://www.hr.vcu.edu/benefits/benefits-list/retirement/individual-counseling

8. Health Benefits • Benefit-eligible employees will have the opportunity to enroll in the 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 non-periodic 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.

9. 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)

10. Health Benefits

11. Health Benefits –Prescription Drug Program

12. Health Benefits – Dental/Vision Option

13. Important Notice About Prescription Drug Coverage for Medicare-Eligible Retirees 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.

14. 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.”

15. 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.

16. 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.

17. 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

18. 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.

19. 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

20. 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.

21. 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.

22. 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

23. 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)

24. 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.

25. Additional Resources State Resources • Virginia Center on Aging • Virginia Department of Human Resource Management (DHRM) Other Agencies • AARP • Elder Care Locator • Elderhostel • IRS

26. VCU Employee Benefits Office Daniel Jason 804-828-4660 djason@vcu.edu Daynon Smith 804-828-5371 dasmith1@vcu.edu Lauren Mortensen 804-827-1723 lcmortensen@vcu.edu E-Mail: benefits@vcu.edu Phone: (804) 827-1723 Web: www.hr.vcu.edu/benefits/retirementplanning.html

27. Questions