                                 CODE OF VIRGINIA

EMPLOYEES OF INSTITUTIONS OF HIGHER EDUCATION (§ 51.1-126)

For purposes of this section, &#8220;optional retirement plan&#8221; means a
retirement plan covering the employee for retirement purposes other than the
Virginia Retirement System defined benefit retirement plan established under
this chapter or the hybrid retirement program described in § 51.1-169.

A. 1. The Board shall maintain an optional retirement plan covering employees
engaged in the performance of teaching, administrative, or research duties with
an institution of higher education and any institution of higher education is
authorized to make contributions to such plan for the benefit of its employees
participating in such plan. Except (i) as provided in subsection B for
institutions of higher education that have established their own optional
retirement plan and (ii) for employees described in subdivision A 2, every
employee hired by an institution of higher education on or after July 1, 2003,
engaged in the performance of teaching, administrative, or research duties shall
make an irrevocable election to participate in either (a) the Virginia
Retirement System defined benefit retirement plan established by this chapter
until January 1, 2014, and thereafter, the hybrid retirement program described
in § 51.1-169 or (b) an optional retirement plan maintained by the Board. Such
election shall be exercised no later than 60 days from the time of the
employee&#8217;s entry upon the performance of his duties. If an election is not
made within such 60 days, such employee shall be deemed to have elected to
participate in the Virginia Retirement System defined benefit retirement plan or
the hybrid retirement program described in § 51.1-169, as applicable.

   2. Any employee (i) hired on or after July 1, 2003, by an institution of
   higher education engaged in the performance of teaching, administrative, or
   research duties; and (ii) who at the time of hiring is in continuous service
   in the performance of such teaching, administrative, or research duties shall
   participate in the optional retirement plan maintained by the Board if the
   most recent retirement plan covering the employee prior to such hiring was an
   optional retirement plan. If the most recent retirement plan covering the
   employee prior to such hiring was the Virginia Retirement System defined
   benefit retirement plan or the hybrid retirement program described in &#xA7;
   51.1-169, such person shall participate in such defined benefit retirement
   plan or such hybrid retirement program, as applicable, from the time of his
   entry upon the performance of his duties.

B. 1. Any institution of higher education, upon receipt of approval by the Board
in writing, may establish and maintain its own optional retirement plan covering
its employees who are engaged in the performance of teaching, administrative, or
research duties. Upon such approval, such institution is authorized to make
contributions to its own optional retirement plan for the benefit of its
employees who elect to participate or who are required to participate in such
plan as provided in this subsection.

   2. Every employee, with the exception of employees described in subdivision B
   3, (i) hired on or after July 1, 2003, by an institution of higher education
   that has established and is maintaining its own optional retirement plan
   pursuant to this subsection and (ii) engaged in the performance of teaching,
   administrative, or research duties shall make an irrevocable election to
   participate in either: (a) the Virginia Retirement System defined benefit
   retirement plan established by this chapter until January 1, 2014, and
   thereafter, the hybrid retirement program described in &#xA7; 51.1-169, as
   applicable; or (b) such optional retirement plan of the institution of higher
   education. Such employee shall not be provided any election to participate in
   an optional retirement plan maintained by the Board.
   				The election shall be exercised no later than 60 days from the time of the
   employee&#8217;s entry upon the performance of his duties. If an election is
   not made within such 60 days, such employee shall be deemed to have elected to
   participate in the Virginia Retirement System defined benefit retirement plan
   established by this chapter or the hybrid retirement program described in
   &#xA7; 51.1-169, as applicable.

   3. Any employee (i) hired on or after July 1, 2003, by an institution of
   higher education engaged in the performance of teaching, administrative, or
   research duties; and (ii) who at the time of hiring is in continuous service
   in the performance of such teaching, administrative, or research duties shall
   participate in the optional retirement plan established by the institution of
   higher education pursuant to this subsection if the most recent retirement
   plan covering the employee prior to such hiring was an optional retirement
   plan. If the most recent retirement plan covering the employee prior to such
   hiring was the Virginia Retirement System defined benefit retirement plan or
   the hybrid retirement program described in &#xA7; 51.1-169, such person shall
   participate in such defined benefit retirement plan or such hybrid retirement
   program, as applicable, from the time of his entry upon the performance of his
   duties.

C. Any employee engaged in the performance of teaching, administrative, or
research duties at an institution of higher education who was covered under an
optional retirement plan for retirement purposes, other than the optional
retirement plan established by such institution pursuant to subdivision B 1,
shall, at the time such institution establishes its own optional retirement plan
pursuant to subdivision B 1, automatically and immediately begin to participate
in the optional retirement plan established pursuant to subdivision B 1,
notwithstanding such employee&#8217;s prior election to participate in a
different optional retirement plan.

D. 1. Any administrative fee imposed pursuant to subdivision A 13 of §
51.1-124.22 upon any institution of higher education for administering and
overseeing the institution&#8217;s retirement plan established pursuant to
subsection A shall be charged for each employee participating in such plan and
shall be for costs incurred by the Retirement System that are directly related
to the administration and oversight of such plan.

   2. Each institution of higher education may charge and collect a reimbursement
   fee from each employee participating in the institution&#8217;s retirement
   plan established pursuant to subsection A. The total amount charged and
   collected for such fee from all such employees for any year shall not exceed
   the total of the costs described in subdivision D 1 and charged to the
   institution for such year.

E. 1. No employee of an institution of higher education who is an active member
in any plan maintained by the Board or established by an institution of higher
education, pursuant to this section, shall also be an active member of the
retirement system or beneficiary other than a contingent annuitant.

   2. If a member of the optional retirement plan maintained under this section
   is at any time in service as an employee in a position covered for retirement
   purposes under the provisions of Chapters 1 (&#xA7; 51.1-124.1 et seq.), 2
   (&#xA7; 51.1-200 et seq.), 2.1 (&#xA7; 51.1-211 et seq.), or 3 (&#xA7;
   51.1-300 et seq.), his benefit payments under the optional retirement plan
   maintained under this section shall be suspended while so employed; provided,
   however, reemployment shall have no effect on the payment under the optional
   plan maintained under this section if the benefits are being paid in an
   annuity form under an annuity contract purchased with the member&#8217;s
   account balance.

F. 1. The contribution by the Commonwealth on behalf of an employee
participating in an optional retirement plan maintained by the Board or on
behalf of an employee participating in an optional retirement plan established
by his institution of higher education under this section to such
employee&#8217;s retirement plan shall be (i) at least 8.5 percent but not in
excess of 8.9 percent of creditable compensation for any person who becomes a
member on or after July 1, 2010, and (ii) 10.4 percent of creditable
compensation for all other employees. Any institution of higher education that
elects a contribution in excess of 8.5 percent of creditable compensation for
any employee described in clause (i) shall provide for the same percentage of
creditable compensation as contributions for each of its employees described in
clause (i) who participates in such optional retirement plan. The portion of the
contribution in excess of 8.5 percent of creditable compensation pursuant to
clause (i) shall not be funded from the general fund of the state treasury, but
shall be paid by the institution of higher education from other funds. In
addition, any person who becomes a member on or after July 1, 2010, shall,
pursuant to procedures established by the Board, pay member contributions on a
salary reduction basis in accordance with § 414(h) of the Internal Revenue
Code, in an amount equal to five percent of his creditable compensation, to the
optional retirement plan maintained by the Board on his behalf or the optional
retirement plan established by his institution of higher education on his
behalf, as applicable. Each employee making such member contribution shall be
deemed to consent and agree to any salary reduction for purposes of the member
contribution. Such member contributions shall be in addition to all
contributions pursuant to clause (i). An institution of higher education may
make an additional contribution for participants who, before January 1, 1991,
exercised the election to participate in the plan provided by the institution
employing them. Such additional contributions shall be made using funds other
than general funds, tuition or fees, up to an additional 2.17 percent of
creditable compensation.

   2. The governing board of any institution of higher education that establishes
   its own optional retirement plan pursuant to this section may establish a
   policy regarding the number of years of service, or portion thereof, that an
   employee must perform before such employee shall be entitled to receive all
   contributions made on his behalf by the institution to the optional retirement
   plan. If an employee has less than the number of years of service, or portion
   thereof, established by the governing board at the time he ceases employment,
   other than by death or involuntary separation due to causes other than job
   performance or misconduct, as determined by the institution of higher
   education in its sole discretion, he shall not receive or be entitled to that
   portion of the contributions that was paid by the institution on his behalf
   for which he does not have the required service. The institution of higher
   education may establish a forfeiture account for such employer contributions
   forgone by the employee and may specify the uses of funds in the forfeiture
   account. The provisions of this subdivision shall apply only to any person who
   (i) becomes a participant in the institution of higher education&#8217;s
   optional retirement plan on or after July 1, 2014, and (ii) is not an employee
   described under subdivision B 3. Any future change to a policy established by
   the governing board of an institution of higher education pursuant to this
   subdivision regarding the number of years of service required for an employee
   to receive all contributions made by the institution to the optional
   retirement plan shall apply only to new employees hired on or after the date
   of the change.

   3. The contribution rates established pursuant to subdivision 1 shall be
   examined by the Board at least once every six years. The examination shall
   consider the salary peer group mean contribution as determined by the State
   Council of Higher Education and the Virginia Retirement System actuary, and,
   if deemed advisable, recommend a revision to the rate of contribution by the
   Commonwealth.

G. With respect to any employee who elects pursuant to subsection A or B to
participate in the Virginia Retirement System defined benefit retirement plan
established by this chapter or the hybrid retirement program described in &#xA7;
51.1-169, the institution of higher education shall collect and pay all employee
and employer contributions to the Virginia Retirement System for retirement and
group life insurance in accordance with the provisions of Chapter 1 (&#xA7;
51.1-124.1 et seq.) for such employees.

H. The Virginia Retirement System shall develop policies and procedures for the
administration of the optional retirement plan it maintains. To assist the
Virginia Retirement System in developing such policies and procedures, the Board
may appoint an advisory committee of higher education employees to supply
guidance in the process.

I. As a condition of the Board granting approval to an institution of higher
education to establish its own optional retirement plan, the institution of
higher education shall develop policies and procedures for the administration of
such plan and shall submit such policies and procedures to the Board as part of
the Board-approval process required under this section. In addition, an
institution of higher education that is granted approval by the Board to
establish its own optional retirement plan covering employees engaged in the
performance of teaching, administrative, or research duties shall not adopt or
implement policies and procedures that are substantially different from the
policies and procedures approved by the Board in the initial approval process
unless the Board, in writing, approves such substantially different policies and
procedures.

J. The Board shall establish guidelines for the employee elections referred to
in subdivision B 2 and shall review and, if deemed advisable, recommend
revisions to the contribution rates as described in subsection F. Except for the
duties described in subsection I, the Board shall have no duties and
responsibilities with respect to such plans established pursuant to subsection
B.

HISTORY: 1952, c. 157, § 51-111.28; 1978, c. 841; 1982, c. 467; 1987, c. 215;
1990, c. 832; 1991, cc. 217, 645; 1996, cc. 933, 995; 2000, cc. 722, 723; 2001,
c. 691; 2003, cc. 369, 626; 2005, c. 793; 2010, cc. 737, 738; 2012, cc. 701,
823; 2014, cc. 745, 764.