Getting Ready to Retire

Thinking of Retiring?

If so, there are several things that you should take into consideration.

  • Are you a member of the Virginia Retirement System (VRS) or the Optional Retirement Plan for Higher Education (ORP)?
  • When are you eligible to retire for an “unreduced” retirement benefit?
  • Are you able and can you afford to retire early with a reduced benefit, or do you need to delay retirement?
  • What are your sources of benefits upon retirement, and what will they cost?
  • Are you age 65 and, if so, have you registered for Medicare?

There are several steps in the retirement process:

  1. If you are eligible for retirement benefits through the VRS, go to www.varetire.org and create an online member account.  Use the myVRS Retirement Planner to look at your account summary and determine if you are on track for retirement.  You may also look at your first opportunity for an unreduced retirement benefit, or create different scenarios; for example, a basic benefit payout option or survivor option, or elect a “PLOP” (Partial Lump-sum Option Payout) if available to you.  See Benefit Payout Options on the VRS website.  Detailed retirement plan handbooks are available to review online or download at VRS Publications.
  2. If you are an ORP participant, schedule a meeting with your plan representative – Fidelity or TIAA-CREF – for assistance in determining if you are on track for retirement.  The plan representatives are on campus on a monthly basis.  Look at the HR Events Calendar on the Human Resources webpage for information on dates, location, and how to make an appointment.
  3. From six months to one year prior to your planned retirement date, schedule a preliminary meeting with a member of your Benefits staff in Human Resources to get an overview of the process and what to expect.You may contact Cheryl Menkins at 221-3163 or at cmenkins@wm.edu, Mary Connolly at 221-7627 or at mconnolly@wm.edu, or Rita Metcalfe at 221-3158 or at rfmetc@wm.edu.
  4. You can apply for Medicare or Social Security online at Apply for Benefits.
    • Medicare Part A helps pay for inpatient (hospital) care and is free for most individuals.  Part A enrollment is automatice with Social Security.
    • Medicare Part B helps pay for outpatient services.  You may enroll in Part B as early as three months prior to your retirement date.
    • Consider your need for Medicare Part D which covers outpatient prescription drugs.  You may seek guidance from your pharmacist as to which Part D plan best meets your needs, or use Medicare Plan Finder.  You may also contact Lisa Walker at Bay Aging (866-758-2386 ext. 44) to recieve assistance with Medicare Part D plans available in Virginia.
    • Your W&M health care plan will serve as your primary health care plan while you are employed and over age 65.

 There are important matters to consider regarding your various benefits prior to retirement.

Health Insurance
    • Through the State Health Benefits Program for Retirees, the Advantage 65 plans supplement health care benefits for retirees who are eligible for Medicare.  See Retiree Health Coverage for information, options and monthly premiums.  Advantage 65 plans are administered by Anthem Blue Cross/Blue Shield.
    • The current selection of Virginia health care plans is available to retirees who are not yet eligible for Medicare.  See Health Coverage and click on the Non-Medicare Retirees tab for information and rates for these plans.
    • Will you “waive” coverage in the State Health Benefits Program for Retirees and obtain coverage with your spouse’s health care plan or other plan?  If so, be sure to identify requirements and initiate enrollment in a timely manner.  If you waive coverage, you may not elect it in the future.
Health Insurance Credit
    • You may be eligible to receive credit or payment toward the cost of your health care.  To receive this credit, you must be retiring with more than 15 years of creditable service.  See Health Insurance Credit for information.
    • If eligible, the benefit is $4 per year of service with no maximum.
    • The credit may not exceed the cost of your health insurance.
    • If you will be paying your health insurance premium through deduction in your VRS retirement check, you do not need to apply for this credit.  VRS will apply the credit automatically to your retirement payment.
    • For health care premiums through any other provider, complete and submit the Request for Health Insurance Credit (see form VRS-45 at www.varetire.org) to VRS.
Life Insurance
    • If you are covered under the VRS Group Life Insurance Program when you retire, some basic benefits will continue.Your life insurance benefit equals your compensation at retirement rounded to the next thousand and doubled.
    • The benefit will begin to reduce by 25% on January 1 following one calendar year of retirement.  It will continue to reduce by 25% each January 1 until it reaches 25% of its original value.
    • As with active employees, you are responsible for paying imputed income tax for life insurance over $50,000.  The IRS requires that employer-provided life insurance be taxed as if you had received the equivalent value in cash.
    • If you also have Optional Group Life Insurance, you may convert your coverage to an individual policy within 31 days of retirement by completing VRS form 35E (see Forms at www.varetire.org), and mailing it to Minnesota Life, P.O. Box 1193, Richmond, VA 23218-1193.
Long-Term Care

If you are covered under the Virginia Sickness and Disability Plan (VSDP) long-term care plan, your coverage will end when you retire.  You may continue your coverage within 60 days of your retirement by completing forms VRS-170 and VRS-171 (see Forms at www.varetire.org), and mailing them to Long Term Care Plan, P.O. Box 64011, St. Paul, MN 55164-0011.  You will pay the premiums for this plan.

Unused Disability Leave or Sick Leave Conversion

If you will be a VRS retiree and eligible for a payment of unused disability leave or sick leave at retirement, you may elect to have this payment converted to service credit toward your retirement benefit.

Tax Sheltered Annuity (TSA) or Deferred Compensation Plans
    • If you participate in the 403(b) TSA plan and receive the 401(a) employer cash match, you must rollover the cash match portion into your 403(b) account upon retirement.  Please contact your plan provider (Fidelity or TIAA-CREF) 30 days after receiving your last check to initiate the rollover.
    • Any contract payouts may be rolled into your 403(b) by completing a TSA Deduction Authorization form.
    • If you participate in the 457 deferred compensation plan, you may contact ICMA-RC (1-877-327-5261) regarding distributions.  The 457 plan does not have a 401(a) rollover requirement.
Other Benefit Plans

If you participate in any of the following voluntary benefit plans, please contact the indicated office as you prepare for retirement.

    • Legal Resources, Ms. Joan Dyer at 804-897-1700
    • AFLAC, Mr. Bradford Klavan at 757-652-0912
    • Long-Term Care, Genworth Financial at 866-859-6060
Taking the Steps to Retirement
  • Four to six months prior to your scheduled retirement date, contact a member of the Benefits staff to schedule a meeting to review and complete the necessary documents.  These documents should be finalized and submitted to VRS three months prior to your retirement date.
    • Your retirement date will be the first day of the month.
    • Unless other arrangements are made, your last day of work will be the 24th of the preceding month.
  • At this meeting, please provide two copies of your birth certificate.
    • If a birth certificate is not available, a valid Passport may be used.
    • If you are electing a Survivor Option, please also provide two copies of the beneficiary’s birth certificate or valid Passport.
  • If you will be a VRS retiree, at this meeting, you will be provided a copy of the following documents for your review and signature.
    • Application for Service Retirement (form VRS-5)
      • If you are married or separated, your spouse must complete the spouse certification section and sign after you sign.
    • Request for Income Tax Withholding (form VRS-15)
      • Your retirement benefit is subject to Federal and Virginia income taxes.
    • Authorization for Direct Deposit of Monthly Benefit (form VRS-57)
      • Please bring a voided personal check.
    • State Health Benefits Enrollment Form for Retirees, Survivors and VSDP/LTD Participants
      • This form must be submitted – whether choosing health care coverage or waiving it – within 31 days of retirement.
      • If you are eligible for, and selecting, an Advantage 65 health care plan, please bring your Medicare card with you.
    • Designation of Beneficiary (form VRS-2)
      • This form should be completed to ensure that your beneficiary designation(s) are up-to-date.
      • If you elect the Survivor Option, you must submit this form to designate a beneficiary of your life insurance benefits.
      • You may name your Survivor or another individual as your beneficiary.
    • Request for Health Insurance Credit (form VRS-45) if you are eligible for the Credit and VRS will not be deducting retiree health insurance premiums for your monthly retirement payment.
  • If you will be an ORP retiree, after meeting with your plan representative, you will be provided a copy of the following documents for your review and signature.
    • Termination Certification Form – ORP (form VRS-65D)
      • This form must be completed within 12 months of requesting a distribution from your plan.
      • For 9-month faculty paid over 24 pay periods, you may choose to retire effective June 1st or September 1st.
      • The advantages of a September 1 retirement are:
        • You get to stay under the College’s health care plan for three additional months at a premium lower than retiree health care;
        • You do not receive a payout, so you will not be taxed at a higher rate; and
        • You do not have to apply for Medicare Part B as soon.
    • Health Insurance Credit (form VRS-75)
      • If eligible for this benefit by having 15 years of service credit; and
      • You must document that you have started a periodic distribution or purchased an annuity from the plan provider.
    • State Health Benefits Enrollment Form for Retirees, Survivors and VSDP/LTD Participants
      • If you are on a health care plan administered by Anthem Blue Cross/Blue Shield, you may establish a direct draft from your bank account.  If your payment is late, your coverage will be cancelled.
  • To receive your final W&M paycheck and payment of any leave due to you, initiate and follow the instructions of the Clearance Form (found at Human Resources Forms).
    • You will receive your final paycheck on or about the first of the month, and payment of any unused annual, compensatory, and/or overtime leave will be paid by check mailed to your home address on the next regular pay day.
What happens after you retire?
  • If you are receiving your benefit from VRS, you will receive your retirement payment on the first business day of the month following your retirement date, and the first of each month following.
  • Cost-of-Living Adjustments (COLAs)
    • Allows your VRS retirement benefit to keep pace with inflation.
    • Is based on the Consumer Price Index for all Urban Consumers (CPI-U).
    • If you retire with an unreduced benefit, or with a reduced benefit with at least 20 years of service credit, the COLA will go into effect on July 1 after one full calendar year from your retirement date.
    • Are capped at 5% for VRS Plan 1 members and at 3% for Plan 2 members.
    • You should receive an annual statement of benefits from the VRS following the issuance of a COLA increase.
  • Returning to Work