Retirement

Regular and Restricted Full-time and Part-Time Faculty Employees - Faculty employees may participate in the Virginia Retirement System (a defined benefit plan) or in an Optional Retirement Plan (a defined contribution plan). 

Classified and University Staff – Regular and restricted full-time and part-time salaried staff are covered by the Virginia Retirement System.

Virginia Retirement System
Virginia Tech contributes 5 percent of your base monthly salary into the retirement account with VRS.  Interest in the amount of 4% is added on June 30 of each year.  Employees are vested after 5 years of service.  Vesting is the minimum period of service needed to qualify for service retirement.  Retirement income is based on the number of years of service in the retirement system, age at retirement, and the highest consecutive 36 months of salary.  Full benefits are available at the age of 65 or at the age of 50 with 30 years of service.  Early retirement with reduced benefits is available to employees between the ages of 55 and 65 with at least 5 years of service or 50 years of age with at least 10 years of service.  

Employees who separate from Virginia Tech have choices as to how to proceed with the VRS account.  Those choices are:

• Leave the account with VRS - If the employee is vested or there is a possibility they will return to state service, they may wish to leave the account with VRS for a retirement benefits.
• Rollover to other qualified plan - A rollover is the transfer of all or part of the contributions and interest to another eligible plan or an Individual Retirement Account (IRA) that allows the employee to postpone paying taxes on the account until it is paid to them.
• Requesting a refund - The terminating employee may request that the account be paid directly to them.  They do not have to be vested to make this request.  If a refund is requested, taxes in the amount of 20% federal and 4% state will be withheld from the refund.  If you are under the age of 59 1/2 years, the IRS may impose an additional 10% federal tax penalty on the distribution.  The refund process takes 90-120 days after termination.

 Detailed information concerning the Virginia Retirement System may be accessed at http://www.varetire.org/ or by calling their toll free number at 1-888-827-3847.

Optional Retirement Plans (Faculty Only) Benefits with the Optional Retirement Plans are based on the level of contributions, investment gains or losses, retirement age and the retirement income option.  The following plans are available:  Fidelity, TIAA-CREF, and AIG Retirement.  Virginia Tech contributes 10.4 percent of the employee's base monthly income to the Optional Retirement Plan.

Purchase of Prior Service
It is possible to purchase additional service for VRS credit.  Examples would be refunded service, working for a VRS agency but in a non-covered position, military service, or working for another college or university but not eligible for retirement benefits.  To qualify for the purchase of service at the rate of 5% of current pay you must (1) apply for the service within 3 years of joining VRS or within 3 years of becoming eligible for the purchase and (2) purchase your approved service or enter into a payroll deduction contract within 3 years of joining VRS or within 3 years of becoming eligible.  If you do not meet these conditions, the cost of the purchase will then be determined based on the actuarial equivalent cost.  Additional information and forms can be accessed at http://www.varetire.org/

Investment Options
For information regarding 403(b) Tax Shelter Annuities, 457(b) Deferred Compensation Plans and Cash Match Program please click here.