City of Alexandria, Virginia
________________
MEMORANDUM
DATE: MAY 12, 2016
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: MARK B. JINKS, CITY MANAGER
DOCKET TITLE:
TITLE
Consideration of a Resolution Establishing the City's FY 2017 Virginia Retirement System Contribution Rates. [ROLL-CALL VOTE]
BODY
_________________________________________________________________
ISSUE: Consideration of a resolution to increase the employee contribution (and offsetting salary increases) by one percentage point for Plan 1 members.
RECOMMENDATION: That City Council approve the attached resolution (Attachment 1) increasing the employee Virginia Retirement System contribution rate for applicable general scale employees from 4% to 5% for FY 2017.
DISCUSSION: As has been discussed in previous City Council meetings and budget work sessions, the Commonwealth of Virginia's 2012 Appropriation Act mandated that localities' governing bodies begin requiring VRS employees to contribute a portion of their salaries toward their VRS benefits. For the employee or member contribution, the legislation required:
1. That all employees hired on or after July 1, 2012, begin immediately paying the five percent member contribution;
2. That City Council opt between requiring current employees, those hired before July 1, 2012, to pay the five percent contribution immediately and allowing the five percent member contribution to be phased in for current employees over the next five years; and
3. That the increased contribution for current employees be offset by an equivalent increase in salary.
In 2012, City Council opted to phase in the mandated employee contributions at a rate of one percent per year starting in FY 2013. Plan 1 employees must now pay an additional one percent beginning on July 1, 2016, for a total employee contribution of five percent. Plan 2 employees and all employees hired on or after July 1, 2012, will continue to pay five...
Click here for full text