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Benefits January 20, 2004
Proposal Allows Virginia Public Workers to Opt for DC Plan
January 20, 2004 (PLANSPONSOR.com) - Government
workers joining the Virginia Retirement System (VRS) after
June 30, 2004 will be able to choose a defined contribution
(DC) plan as their pension instead of the traditional defined
benefit (DB) program, according to a measure introduced in
the state legislature.
Reported by Fred Schneyer
HB 661 also authorizes the VRS to establish an amount that government employers in the state will contribute to the DC plan, according to the National Association of State Retirement Administrators.
Similar plans for broad employee groups have been established in recent years in Florida (See A Cloud Over The Sunshine State ), Ohio, South Carolina , and Montana (See Montana Public Workers Shun DC Option ).
Hybrid plans, which feature a reduced defined benefit component coupled with mandatory participation in a defined contribution plan, have been installed since 1996 for many public employees in Washington state and for workers in Oregon who joined after last August. Indiana public employees and teachers have long participated in a hybrid plan.
Michigan is the only state to have closed off its defined benefit plan to new employees; since 1997, all new Michigan state workers are required to join a DC plan, according to the report. Since 1991, all new public school teachers in West Virginia have been limited to a defined contribution plan.
For more information about Virginia’s DC program, go to http://guest.vadcp.com/tl001/menu/frameset.asp .