The Virginia Retirement System (VRS) Hybrid Plan is a combination of a defined benefit plan and a defined contribution plan.
Defined Benefit Component
The defined benefit portion of the Hybrid Plan is determined by the following:
-
- the amount of service you accumulate in VRS-covered positions;
- your age at retirement;
- and the average of your 60 consecutive months of highest salary.
You contribute 4% of your pre-tax salary and Mason makes an actuarially determined contribution as well.
Your employer guarantees this benefit and assumes all investment risk.
The greatest disadvantage of the defined benefit plan is that actuarial reductions are applied to your benefit if you do not qualify for an unreduced retirement. To qualify for unreduced retirement from VRS, you must be of normal Social Security retirement age with at least 5 years of service credit or age 60 with age and service equaling 90. The earliest reduced retirement eligibility is age 60 with at least 5 years of service credit.
Defined Contribution Component
The defined contribution component of the Hybrid Plan has a mandatory pre-tax contribution of 1% by the employee and then allows you to voluntarily contribute up to 4% more in 1/2% increments. Mason also has a mandatory contribution of 1% and will match your contributions at the levels outlined below. You make the investment choices (from a list of available funds) and assume all risks associated with these choices. Your employer bears no responsibility for the outcome.
| Total Mandatory Contributions |
Employee (pre-tax) |
Employer |
| Defined Benefit (DB) |
4.0% |
Actuarially Determined Rate |
| Defined Contribution (DC) |
1.0% |
1.0% |
|
|
|
| Voluntary Contributions |
Employee |
Employer Match |
|
.5% |
.5% |
|
.5% |
.5% |
|
.5% |
.25% |
|
.5% |
.25% |
|
.5% |
.25%
|
|
.5% |
.25% |
|
.5% |
.25% |
|
.5% |
.25% |
| Total Voluntary Contributions |
4.0% |
2.5% |
| Total Contributions |
9.0% |
3.5% + the Adjusted Actuarially Determined Rate |
*Please note: The Adjusted Actuarially Determined Rate equals the Actuarially Determined Rate minus the employer match.
For example, if you increase your DC voluntary contribution, it will increase the employer contribution to your DC component while reducing the employer contribution to your DB component. Conversely, by reducing your voluntary contribution to the DC component, it will decrease the employer contribution on your DC component and increase the employer contribution to the DB component.
