                                 CODE OF VIRGINIA

EMPLOYER CONTRIBUTIONS (§ 51.1-145)

A. The total annual defined benefit employer contribution for each employer,
expressed as a percentage of the annual membership payroll, shall be determined
in a manner so as to remain relatively level from year to year. Each employer
shall contribute for the defined benefit plans, including the defined benefit
component of the hybrid retirement program under &#xA7; 51.1-169, an amount
equal to the sum of the normal contribution, any accrued liability contribution,
and any supplementary contribution, as well as amounts required for the defined
contribution component of the hybrid retirement program under &#xA7; 51.1-169.
The defined benefit contribution rates for each employer shall be determined
biennially and shall remain in effect until a new biennial valuation is made.
All defined benefit contribution rates shall be computed in accordance with
recognized actuarial principles on the basis of methods and assumptions approved
by the Board and as described in the Retirement System funding policy.

B. The normal employer defined benefit contribution for any period shall be
determined as a percentage, equal to the normal contribution rate, of the total
covered compensation of the members employed during the period.

C. The normal defined benefit contribution rate for any employer shall be
determined as the percentage represented by the ratio of (i) the annual normal
cost to provide the benefits of the Retirement System with respect to members
employed by the employer in excess of the members&#8217; contributions to (ii)
the total annual compensation of the members.

D. The accrued defined benefit liability contribution for any employer for any
period shall be determined as a percentage, equal to the accrued liability
contribution rate, of the total compensation of the members during the period.

E. The accrued defined benefit liability contribution rate for any employer
shall be a percentage of the total annual compensation of the members,
determined so that a continuation of annual contributions by the employer at the
same percentage of total annual compensation over a period of years determined
by the Board consistent with recognized actuarial principles and the Retirement
System funding policy will be sufficient to amortize the unfunded accrued
liability with respect to the employer.

F. The unfunded defined benefit accrued liability with respect to any employer
as of any valuation date shall be determined as the excess of the actuarial
accrued liability over the sum of assets of the Retirement System as of the
valuation date, as follows: (i) the then present value of the benefits to be
provided under the Retirement System in the future to members and former members
over (ii) the sum of the assets of the Retirement System then currently in the
members&#8217; contribution account and in the employer&#8217;s retirement
allowance account, plus the then present value of the stipulated contributions
to be made in the future by the members, plus the then present value of the
normal contributions expected to be made in the future by the employer.

G. The supplementary defined benefit contribution for any employer for any
period shall be determined as a percentage, equal to the supplementary
contribution rate, of the total compensation of the members employed during the
period.

H. Until July 1, 1997, the supplementary contribution rate for any employer
shall be determined as the percentage represented by the ratio of (i) the
average annual amount of post-retirement supplements, as provided for in this
chapter, which is anticipated to become payable during the period to which the
rate will be applicable with respect to former members to (ii) the total annual
compensation of the members.

I. The Board shall certify to each employer the applicable defined benefit
contribution rate and any changes in the rate. The Board shall also provide the
applicable estimated defined contribution amounts to each employer.

J. The defined benefit employer contribution for the year shall be increased to
the extent necessary to overcome any insufficiency if the contributions for any
employer, when combined with the amount of the retirement allowance account of
the employer, are insufficient to provide the benefits payable during the year.

K. The appropriation bill that is submitted to the General Assembly by the
Governor prior to each regular session that begins in an even-numbered year
shall include the defined benefit employer contributions that will become due
and payable to the retirement allowance account from the state treasury during
the following biennium, an estimate of all state employer defined contribution
amounts required by &#xA7; 51.1-169, and amounts for contributions to applicable
ancillary benefits as otherwise required by this title. The amount of the
defined benefit contributions shall be based on the contribution rates certified
by the Board pursuant to subsection I that are applicable to the Commonwealth as
an employer and the anticipated compensation during the biennium of the members
of the retirement system on behalf of whom the Commonwealth is the employer.

L. The General Assembly shall set defined benefit contribution rates that are at
least equal to the following percentage of the contribution rates certified by
the Board pursuant to subsection I:

   1. For members who are state employees as defined in &#xA7; 51.1-124.3 and who
   are participating in a retirement plan established pursuant to Chapter 1
   (&#xA7; 51.1-124.1 et seq.), (i) 67.02 percent for fiscal years beginning July
   1, 2012, and July 1, 2013, (ii) 78.02 percent for fiscal years beginning July
   1, 2014, and July 1, 2015, (iii) 89.01 percent for fiscal years beginning July
   1, 2016, and July 1, 2017, and (iv) 100 percent for fiscal years beginning on
   or after July 1, 2018;

   2. For members who are teachers as defined in &#xA7; 51.1-124.3 and who are
   participating in a retirement plan established pursuant to Chapter 1 (&#xA7;
   51.1-124.1 et seq.), (i) 69.53 percent for fiscal years beginning July 1,
   2012, and July 1, 2013, (ii) 79.69 percent for fiscal years beginning July 1,
   2014, and July 1, 2015, (iii) 89.84 percent for fiscal years beginning July 1,
   2016, and July 1, 2017, and (iv) 100 percent for fiscal years beginning on or
   after July 1, 2018;

   3. For members participating in a retirement plan established pursuant to
   Chapter 2 (&#xA7; 51.1-200 et seq.), (i) 75.84 percent for fiscal years
   beginning July 1, 2012, and July 1, 2013, (ii) 83.90 percent for fiscal years
   beginning July 1, 2014, and July 1, 2015, (iii) 91.95 percent for fiscal years
   beginning July 1, 2016, and July 1, 2017, and (iv) 100 percent for fiscal
   years beginning on or after July 1, 2018;

   4. For members participating in a retirement plan established pursuant to
   Chapter 2.1 (&#xA7; 51.1-211 et seq.), (i) 75.82 percent for fiscal years
   beginning July 1, 2012, and July 1, 2013, (ii) 83.88 percent for fiscal years
   beginning July 1, 2014, and July 1, 2015, (iii) 91.94 percent for fiscal years
   beginning July 1, 2016, and July 1, 2017, and (iv) 100 percent for fiscal
   years beginning on or after July 1, 2018; and

   5. For members participating in a retirement plan established pursuant to
   Chapter 3 (&#xA7; 51.1-300 et seq.), (i) 83.98 percent for fiscal years
   beginning July 1, 2012, and July 1, 2013, (ii) 89.32 percent for fiscal years
   beginning July 1, 2014, and July 1, 2015, (iii) 94.66 percent for fiscal years
   beginning July 1, 2016, and July 1, 2017, and (iv) 100 percent for fiscal
   years beginning on or after July 1, 2018.

M. In the case of all teachers whose compensation is paid exclusively out of
funds derived from local revenues and appropriations from the general fund of
the state treasury, the Commonwealth shall contribute to the extent specified in
the appropriation act. In the case of any teacher whose compensation is paid out
of funds derived in whole or in part from any special fund or from a contributor
other than the Commonwealth or a political subdivision thereof, contributions
shall be paid out of the special fund or by the other contributor in proportion
to that part of the compensation derived therefrom. In the case of all state
employees whose compensation is paid exclusively by the Commonwealth out of the
general fund of the state treasury, the Commonwealth shall be the sole
contributor, and all contributions shall be paid out of the general fund. In the
case of a state employee whose compensation is paid in whole or in part out of
any special fund or by any contributor other than the Commonwealth,
contributions on behalf of the employee shall be paid out of the special fund or
by the other contributor in proportion to that part of the employee&#8217;s
compensation derived therefrom. The governing body of each political subdivision
is hereby authorized to make appropriations from the funds of the political
subdivision necessary to pay its proportionate share of contributions on behalf
of every state employee whose compensation is paid in part by the political
subdivision. In the case of each person who has elected to remain a member of a
local retirement system, the Commonwealth shall reimburse the local employer an
amount equal to the product of the compensation of the person and the employer
contribution rate as used to determine the employer contribution for state
employees under this section. Each employer shall keep such records and
periodically furnish such information as the Board may require and shall inform
new employees of their duties and obligations in connection with the Retirement
System.

N. The defined benefit contribution rate established for each employer may
include the cost to administer any defined contribution plan administered by the
Retirement System and available to the employer. The portion of such
contribution designated to cover administrative costs of the defined
contribution plans shall not be deposited into the trust fund established for
the defined benefit plans but shall be separately accounted for and used solely
to defray the administrative costs associated with the various defined
contribution plans. This provision shall supplement the authority of the Board
under &#xA7;&#xA7; 51.1-124.22 and 51.1-602 to charge and collect administrative
fees to employers whose employees have available the various defined
contribution plans administered by the Retirement System.

O. Institutions of higher education shall also pay contributions to the
employer&#8217;s retirement allowance account in amounts representing the
difference between the contribution rate payable with respect to employees
enrolled in the defined benefit plan under this chapter and the employer
contributions paid to any optional retirement plan it offers on behalf of any of
its nonfaculty Covered Employees, as described in &#xA7;&#xA7; 23.1-1020 through
23.1-1026. The employer contribution rate established for each employer may
include the annual rate of contribution payable by such employer with respect to
employees enrolled in the optional defined contribution retirement plans
established under &#xA7;&#xA7; 51.1-126, 51.1-126.1, 51.1-126.3, and 51.1-126.4.

P. Employer contributions may be returned to the employer only as determined in
accordance with &#xA7; 401(a) of the Internal Revenue Code, as amended or
renumbered, and the regulations thereunder applicable to governmental plans.

Q. Additionally, employers shall pay contributions as determined by the
Retirement System for applicable ancillary benefits as otherwise required by
this title.

HISTORY: 1952, c. 157, §§ 51-111.12, 51-111.47; 1960, c. 604; 1966, c. 174;
1970, c. 476; 1974, c. 353; 1975, cc. 360, 597, 610, § 51-111.10:2; 1978, cc.
1, 841; 1980, c. 722, § 51-111.47:01; 1981, c. 403; 1982, c. 467; 1985, c. 129;
1986, c. 474; 1990, c. 832; 1991, c. 719; 1996, c. 1030; 2005, c. 161; 2012, cc.
701, 823; 2013, c. 463; 2015, c. 660; 2022, cc. 9, 229.