Social Security and your Virginia VRS pension

How does Social Security affect a VRS pension?

Short answer: in Plan 2 and the Hybrid plan, your unreduced VRS retirement age is your Social Security normal retirement age (67 if you were born in 1960 or later), with at least five years of service. The handbooks don't say VRS reduces your pension for Social Security, and the Advance Pension Option doesn't change your Social Security benefit. Plan 1 Handbook p. 57, Social Security; p. 19, Advance Pension Option; Plan 2 Handbook p. 14

Not sure which plan you're in? See which plan; retiring before that age is covered under early retirement. Load the Plan 2 handbook example in the calculator to see the unreduced date it finds.

You are eligible for a full Social Security retirement benefit at your normal Social Security retirement age and may qualify as early as 62. Plan 2 and Hybrid normal retirement age is tied to Social Security normal retirement age. The Advance Pension Option uses a Social Security estimate (less than 12 months old, no future earnings) but does not change your Social Security benefit. Plan 1 Handbook p. 57, Social Security; p. 19, Advance Pension Option; Plan 2 Handbook p. 14

Normal retirement age by birth year

Plan 2 and Hybrid members can retire unreduced at this age with at least five years of service, or earlier under this rule: age plus service credit equal 90 (example: age 60 with 30 years).

The Advance Pension Option

The Advance Pension Option raises your VRS benefit from retirement until an age you choose between 62 and your normal Social Security age, then lowers it for life by the estimated Social Security amount used, but never by more than 50% of your Basic Benefit. You can choose it with an unreduced benefit, or at 55 or older if vested. Plan 1 Handbook p. 19, Advance Pension Option

The Advance Pension Option pays nothing to a survivor and can't be combined with other payout options. It needs a Social Security estimate less than 12 months old, based on your earnings record and assuming no future earnings. You can still start Social Security whenever you're eligible. Plan 1 Handbook p. 19, Advance Pension Option Compare it with the other choices on payment options.

Social Security and survivor benefits

If an active member dies from a work-related cause, the VRS monthly benefit to a spouse, minor child or parent is 33⅓% of average final compensation if that person is eligible for Social Security survivor benefits, and 50% if not. Plan 1 Handbook p. 42, Work-Related Monthly Benefit Calculation More on survivor benefits.

FICA on retiree life insurance

Retirees whose VRS group life insurance is over $50,000 have imputed income on the excess. VRS withholds FICA (Social Security and Medicare) taxes on it and sends a W-2; once the coverage drops below $50,000, the withholding stops. Plan 1 Handbook p. 56, Taxes See taxes.

Is a Virginia teaching job covered by Social Security?

The VRS handbooks don't say whether Virginia teachers' VRS jobs are also covered by Social Security. Your Social Security statement shows whether your school earnings were taxed for Social Security, and the Social Security Administration can give you an estimate.

Questions