Code of Virginia

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Code of Virginia
Title 51.1. Pensions, Benefits, and Retirement
Chapter 8. Local Retirement Systems
4/23/2021

Chapter 8. Local Retirement Systems.

Article 1. General Provisions.

§ 51.1-800. Counties, cities, and certain towns to establish local systems or participate in Virginia Retirement System.

A. Every county and city, and every town having a population of 5,000 or more, shall provide a retirement system for those officers and employees listed in subsection B either (i) by establishing and maintaining a local retirement system which provides a service retirement allowance to each employee who retires at age sixty-five or older which equals or exceeds two-thirds of the service retirement allowance to which the employee would have been entitled had the allowance been computed under the provisions of the Virginia Retirement System or (ii) by participating directly in the Virginia Retirement System.

B. The following persons shall be covered by a retirement system as provided in subsection A:

1. Officers and employees who are regularly employed full time on a salaried basis, whose tenure is not restricted to temporary or provisional employment.

2. Officers and employees who are regularly employed full time on a salaried basis, whose tenure is not restricted to temporary or provisional employment by an organization other than a public school board that functions solely within the boundaries of a county, city, or town, unless the cost of the organization's operation is borne by (i) users of services, (ii) more than one county, city, or town, or (iii) an entity other than a county, city, or town.

3. Clerks of the circuit court and deputies or employees of such officers.

C. Nothing in this chapter shall be construed to prohibit a county, city, or town from participating in the Virginia Retirement System and establishing a local retirement system. If a locality participates in the Virginia Retirement System and establishes a local retirement system, pursuant to § 51.1-801, providing supplemental benefits to the state system, the local system shall not be required to satisfy the criterion established in clause A (i) of this section.

D. A county, city, or town shall not be required to provide retirement benefits to an employee who enters into an agreement with the local government for inclusion in a deferred compensation plan when the agreement specifically prohibits inclusion in any other retirement system established by the county, city, or town.

1952, c. 157, § 51-111.31; 1954, c. 241; 1958, c. 367; 1960, c. 400; 1973, c. 523; 1974, c. 353; 1975, c. 296; 1976, c. 581; 1977, c. 620; 1990, c. 832; 1991, c. 381; 1993, c. 866; 2006, c. 406.

§ 51.1-801. Counties, cities, and towns generally.

The governing body of any county, city, or town may, by ordinance adopted by a recorded vote of a majority of the members elected, establish a retirement system. The retirement system may cover injured or retired officers and employees of the county, city, or town. Benefits may be payable to the officers and employees or their dependents, estates, or designated beneficiaries. The retirement system may provide for accrued vested or contractual rights thereunder. The local governing body may, through self-funding or the purchase of insurance and annuities, or a combination thereof, provide retirement allowances, death benefits, and group life insurance coverage for officers and employees of the county, city, or town and group accident and sickness insurance coverage for officers and employees of the county, city, or town and their dependents. The governing body may by ordinance establish a fund for the payment of retirement allowances, death benefits, and insurance and annuity premiums by appropriating funds from the treasury of the county, city, or town or by requiring employee contributions through payroll deductions, or both, or by any other mode not prohibited by law.

For the purposes of this section, the term "employees" may include teachers or other employees of county, city, and town school boards.

If any county, city, or town participates in the Virginia Retirement System and also establishes a local retirement system providing supplemental benefits to the employees covered under the Virginia Retirement System, the local system shall not be required to satisfy the retirement age and service criterion established in clause A (i) of § 51.1-800.

Code 1919, § 3035; 1932, p. 752; 1942, p. 178; 1944, p. 54; 1945, p. 74; 1946, p. 61; Code 1950, § 51-112; 1952, cc. 59, 587; 1959, Ex. Sess., c. 58; 1960, c. 404; 1968, c. 60; 1980, c. 135; 1989, Sp. Sess., c. 3; 1990, c. 832.

§ 51.1-801.1. Portability of service credit between certain political subdivisions of the Commonwealth and the Virginia Retirement System or certain other political subdivisions of the Commonwealth.

A. Any political subdivision of the Commonwealth which has a defined benefit plan that is not supplemental to the Virginia Retirement System may enter into an agreement with the Virginia Retirement System to permit any vested member of the Virginia Retirement System, upon entering service in a covered position and filing a written application with the political subdivision's plan, to purchase service credit, of an amount to be determined by the governing authority of the political subdivision's plan, in the political subdivision's plan. The purchase shall be accomplished by and upon the transfer of assets to the political subdivision's plan from the Virginia Retirement System as provided in the agreement.

B. Any political subdivision of the Commonwealth which has a defined benefit plan that is not supplemental to the Virginia Retirement System (the "transferor's plan") may enter into an agreement with any other political subdivision of the Commonwealth which has a defined benefit plan that is not supplemental to the Virginia Retirement System (the "transferee's plan") to permit any vested member of the transferor's plan, upon entering service in a covered position and filing a written application with the transferee's plan, to purchase service credit, of an amount to be determined by the governing authority of the transferee's plan, in the transferee's plan. The purchase shall be accomplished by and upon the transfer of assets to the transferee's plan from the transferor's plan as provided in the agreement.

1996, cc. 939, 990.

§ 51.1-802. Assets of retirement systems; exemption from taxation; execution and assignment.

The assets of any retirement system established pursuant to this article, or by a city or town charter, are hereby exempted from any state, county, or municipal tax. The assets of a retirement system, retirement allowances, and other benefits accrued or accruing to any person under the provisions of this chapter, or under any city or town charter, shall not be subject to execution, attachment, garnishment, or any other process except for administrative actions pursuant to Chapter 19 (§ 63.2-1900 et seq.) of Title 63.2 or any court process to enforce a child or child and spousal support obligation, nor shall any assignment thereof be enforceable in any court. However, retirement benefits and assets created under this title which are deemed to be marital property pursuant to Chapter 6 (§ 20-89.1 et seq.) of Title 20 may be divided or transferred by the court by direct assignment to a spouse or former spouse pursuant to § 20-107.3.

Code 1919, § 3035; 1932, p. 752; 1942, p. 178; 1944, p. 54; 1945, p. 74; 1946, p. 61; Code 1950, § 51-112; 1952, cc. 59, 587; 1959, Ex. Sess., c. 58; 1960, c. 404; 1968, c. 60; 1980, c. 135; 1989, Sp. Sess., c. 3; 1990, c. 832; 1991, c. 433; 1992, c. 716.

§ 51.1-803. Investments of retirement systems.

A. If the governing body of any county, city, or town establishes a retirement system pursuant to the provisions of this article, any funds that may be allocated, segregated, or otherwise designated for the retirement system, which are on hand at any time and are not necessary for immediate payment of pensions or benefits, shall be invested with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with the same aims. Such investments shall be diversified so as to minimize the risk of large losses unless under the circumstances it is clearly prudent not to do so.

B. The selection of services related to the management, purchase, or sale of investments authorized by this section, including but not limited to actuarial services, shall be governed by the standard of care set forth in this section and shall not be subject to the provisions of the Virginia Public Procurement Act (§ 2.2-4300 et seq.) of Title 2.2.

C. In the case of an automatic rollover of a mandatory cash-out, as that term is defined under I.R.C. Section 401 (a) (31) (B) of the United States Internal Revenue Code of 1986 (including as such section is amended or renumbered or any successor provision thereto) and regulations thereunder applicable to governmental plans, the governing body shall not be liable for any loss resulting from the governing body's selection of an individual retirement plan provider and investment product where the selection is made in accordance with guidelines to be adopted by the governing body that are similar to the safe harbor guidelines adopted by the United States Department of Labor for this purpose.

1986, c. 196, § 51-112.1; 1990, c. 832; 1992, c. 810; 1995, c. 307; 1996, c. 508; 1997, c. 213; 2005, c. 196.

§ 51.1-804. In certain cities.

Chapter 251 of the Acts of 1942, as amended by Chapter 81 of the Acts of 1946, codified as § 3035r of Michie Code 1942, relating to pensions, etc., for officers and employees of any city having a population of not less than 100,000 nor more than 170,000, and of any city adjoining a county having a density of population of more than 1,000 per square mile, is continued in effect.

1942, c. 251; 1946, c. 81; Code 1950, § 51-113; 1990, c. 832.

§ 51.1-805. In certain counties.

The following laws are continued in effect:

1. Chapter 111 of the Acts of 1942, codified as § 2733a of Michie Code 1942, as amended by Chapter 48 of the Acts of 1947, and as amended by Chapter 212 of the Acts of 1948, as amended by Chapter 555 of the Acts of 1950, as amended by Chapter 272 of the Acts of 1975, and as amended by Chapter 88 of the Acts of 1980, authorizing a retirement system for the employees of Arlington County.

2. Chapter 303 of the Acts of 1944, as amended, authorizing a police retirement system for any county having the urban county executive form of government and previously recodified as Article 4 of Title 51, §§ 51-127.10 through 51-127.30.

3. Chapter 161 of the Acts of 1946, as amended by Chapter 184 of the Acts of 1956, and as amended by Chapter 268 of the Acts of 1958, providing for police and firemen's pensions and benefits in counties having a population in excess of 1,000 per square mile.

4. Chapter 282 of the Acts of 1946, as amended, authorizing police and firemen's pensions in Norfolk County was repealed by Chapter 296 of the Acts of 1950.

5. Chapter 278 of the Acts of 1946, as amended by Chapter 184 of the Acts of 1956, and as amended by Chapter 267 of the Acts of 1958, providing for employees' pensions and benefits in counties having a population in excess of 1,000 per square mile.

6. Chapter 4 of the Acts of 1947, as amended by Chapter 490 of the Acts of 1950, providing for a system of pensions, etc., for the officers and employees of any county adjoining a county having a population of more than 1,000 per square mile.

Chapter 45 of the Acts of 1948, as amended by Chapter 492 of the Acts of 1950, authorizing the establishment of a retirement and pension plan for the employees of any county adjoining a county having a population of more than 1,000 per square mile, is hereby incorporated in this section by this reference.

1936, c. 224; 1942, c. 111; 1944, p. 437; 1946, cc. 161, 278, 282; 1947, cc. 4, 21, 48; 1948, cc. 45, 212; Code 1950, §§ 51-114, 51-127.10 through 51-127.30; 1950, cc. 296, 490, 492, 555; 1952, c. 421; 1952, Ex. Sess., c. 6; 1954, c. 432; 1956, c. 184; 1958, cc. 18, 76, 267, 268; 1962, c. 485; 1966, c. 351; 1968, c. 180; 1970, c. 599; 1972, c. 529; 1973, c. 499; 1974, c. 439; 1975, c. 272; 1976, c. 197; 1980, cc. 88, 700; 1981, c. 595; 1990, c. 832.

§ 51.1-806. Reimbursement by Commonwealth for portion of employer contribution on account of certain officers and employees.

Any county or city operating a local retirement system which does not participate in the Virginia Retirement System and which defines as "compensation" the full compensation payable or fees earnable by its county and city treasurer, attorney for the Commonwealth, commissioner of the revenue, clerk of court, sheriff, and a deputy or employee of any such officer may be reimbursed for a portion of the employer contribution paid on behalf of any such officer, deputy, or employee. In such cases, the political subdivision shall, at least biennially, submit to the Compensation Board information required by the Board's actuary for computing, at the expense of the employing political subdivision, the employer contribution rate that would be applicable if all such officers, deputies, or employees thereof were members of the Virginia Retirement System. The Retirement Board shall compute the employer contribution rate on the assumption that no service prior to the computation date was creditable, and no assets were allocable to such members. The political subdivision shall be reimbursed by the Compensation Board on the basis on which the Commonwealth pays the salaries of such officer, deputy, or employee or shares, or would share, in the excess fees from the office.

1958, c. 368, § 51-114.2; 1960, c. 486; 1966, c. 174; 1990, c. 832.

Article 2. Members of Police Departments.

§ 51.1-807. Police officers' pension and retirement boards.

Any county, city, or town in this Commonwealth having a police department may establish, in the manner hereinafter provided, a board to be known as the "police officers' pension and retirement board." The board shall be a body corporate and consist of five members. One member shall be the treasurer of the county, city, or town and shall also be the treasurer of the board. Two members shall be elected by the majority vote of the members of the police department, one for a term of four years and one for a term of two years, and all successors in office of the one elected for two years shall be elected for terms of four years. Two members shall be appointed by the governing body for terms of four years.

When any board is established, it shall, at its first meeting and annually thereafter, elect one of the members as president and one as secretary. The board may also elect a vice-president.

1940, p. 737; Michie Code 1942, § 3035d; Code 1950, § 51-115; 1990, c. 832.

§ 51.1-808. Powers, authority, and duties of board.

The general powers, authority, and duties of any police officers' pension and retirement board shall be as follows:

1. To adopt bylaws and regulations which the board deems necessary to conduct its affairs;

2. To provide for appropriate clerical, legal, medical, and other services and to pay reasonable compensation for such services;

3. To require deductions from the salaries of active and paid members of the police department and to pay certain percentages of salaries, as hereinafter specified, into the treasury of the board to raise funds for the necessary purposes of the board in the administration of its affairs;

4. To draw warrants on the treasurer of the board, for the payment of pensions, benefits, and administrative costs. Warrants shall be signed in the name of the board and countersigned by its president; and

5. Upon request by the policemen's pension and retirement board, the governing body of the county may by ordinance amend the retirement plan and trust at any time for the purpose of defining, enlarging and improving the benefits that any member thereof may receive and shall by ordinance amend the retirement plan and trust at any time for the purpose of compliance with federal or state law.

1940, p. 738; Michie Code 1942, § 3035e; Code 1950, § 51-116; 1990, c. 832; 1994, c. 523.

§ 51.1-809. Treasurer of board.

The treasurer of the board shall be the custodian of the board's funds and securities and shall give bond, payable to the board, in such amount and with such surety as the board requires, conditioned for the faithful performance of duties and the proper accounting for all funds and securities which the treasurer receives. The cost of the bond shall be paid out of the funds of the board. The treasurer shall disburse board funds on warrants drawn on him by the board, and signed and countersigned by the board's president.

1940, p. 738; Michie Code 1942, § 3035f; Code 1950, § 51-117; 1990, c. 832.

§ 51.1-810. Time credited to service record.

The time of service of any member of a police department having a police pension and retirement board prior to June 22, 1940, shall be computed to the credit of the member's service record; however, the pension amount payable shall be determined by that proportion of the amounts provided for by this chapter, which the time of service of such member serving in the police department at the time of his retirement, or disability, bears to twenty years.

1940, p. 738; Michie Code 1942, § 3035g; Code 1950, § 51-118; 1990, c. 832.

§ 51.1-811. Eligibility for retirement; retirement allowance.

Any member of a police department who has completed twenty years of service in the department and attained the age of fifty years may retire and receive the pension and benefits provided in this section. Upon retirement, a member shall receive a retirement allowance, payable to the member for life, equal to fifty percent of the member's annual salary, computed on the basis of the last three years of service and an additional amount equal to two percent of the member's salary for each year of service after the age of fifty and after twenty years of service in the department.

1940, p. 738; Michie Code 1942, § 3035i; Code 1950, § 51-120; 1990, c. 832.

§ 51.1-812. Disability from natural causes not originating in performance of official duties.

Any member disabled on account of a natural cause or causes not originating in the performance of the member's official duties shall receive a minimum sum equal to ten percent of the member's salary, during such disability, if the member's disability occurs at any time during the first five years of service and an additional amount equal to two percent of the member's salary for each additional year of service exceeding five years. At no time shall the disability payment amount exceed one-half of the member's salary.

1940, p. 739; Michie Code 1942, § 3035j; Code 1950, § 51-121; 1990, c. 832.

§ 51.1-813. Disability resulting from activities in discharge of official duties.

If any member of a police department of a county, city, or town, other than the City of Richmond, which has a pension plan becomes disabled as a result of activities in the discharge of the member's official duties, the member shall receive, as pension and benefits during such disability, the sum of not less than sixty-six and two-thirds percent of the member's salary until eligible to retire under age and service retirement. The member shall then be retired on the age and service pension as provided in § 51.1-811.

Any member of a county, city, or town police department or any sheriff or deputy sheriff who dies or is totally or partially disabled as a result of hypertension or heart disease shall be presumed to have died or become disabled in the line of duty, unless the contrary is shown by a preponderance of competent evidence. To be eligible, or for a beneficiary to be eligible, for retirement, sickness, or other benefit payments based upon such presumption, a member, sheriff, or deputy sheriff shall, before the claim was filed, have had a physical examination and been found free from hypertension or heart disease. The physical examination shall have included such appropriate laboratory and other diagnostic studies as the governing body prescribed and shall have been conducted by physicians whose qualifications were prescribed by the governing body. Any member, sheriff, or deputy sheriff filing a claim for such benefits based upon disability incurred in the line of duty shall, if requested by the governing body, submit to a physical examination by any physician designated by the governing body. The examination may include such tests or studies as may reasonably be prescribed by the designated physician or, in the case of a claim for death benefits, include a postmortem examination to be performed by the medical examiner for the county, city, or town appointed under § 32.1-282. The member or claimant shall have the right to have present at such examination, at his own expense, any qualified physician he may designate.

Michie Code 1942, § 3035k; Code 1950, § 51-122; 1950, p. 739; 1973, c. 499; 1974, c. 94; 1976, c. 772; 1978, c. 769; 1982, c. 581; 1990, c. 832.

§ 51.1-814. Employing such presumption in determining eligibility for benefits.

The presumption established in § 51.1-813 shall be employed in determining eligibility for death, retirement, sickness, and other benefits, provided pursuant to any other provision of law, the charter of any city or town, or otherwise, for any member of a county, city, or town police department or sheriff or deputy sheriff who dies or becomes totally or partially disabled.

1976, c. 772, § 51-122.1; 1990, c. 832.

§ 51.1-815. Counties, cities, and towns authorized to provide relief to surviving spouse and children.

Any county, city, or town may provide for the relief of any children and surviving spouse of any law-enforcement officer, sheriff, or deputy sheriff who dies while in the service of the county, city, or town. If any policeman loses his life while in the discharge of official duties, there shall be paid to the surviving spouse until death, or remarriage, a pension of not less than one-half of the policeman's salary at the time of death. The relief provided shall be exclusive of any payment out of the general fund of the state treasury pursuant to § 9.1-400 et seq.

1940, p. 738; Michie Code 1942, § 3035h; Code 1950, § 51-119; 1976, c. 772, § 51-122.2; 1990, c. 832.

§ 51.1-816. Reduction of pension and benefits where income earned during disability retirement.

If any person receives a disability pension or benefit under this article and subsequently becomes employed, whether full time or part time, the pensions and benefits received shall be reduced by the amount of income received which exceeds the difference between the benefits received under this section and the amount of pay to which the member would have been entitled had the member's employment progressed in the same rank and grade with credit for the level of seniority the member would have attained had the member not been disabled. The reduction shall continue until the member would have been eligible for normal retirement, based on age and service, had the member remained uninjured and employed. For the purposes of this section, "income" means gross income received less deductions for social security taxes only.

Any person receiving pensions or benefits under the provisions of this section shall upon request, on or before May 1 of each year, provide a copy of all W-2 forms showing income received, or a statement under oath as to whether the member has received compensation for work performed in the previous calendar year, to the governing body of the jurisdiction providing this pension. Refusal to provide such documents shall be grounds for termination of benefits under this section until such documents are produced. Production of the documents shall be required until the person would have been eligible for normal retirement had the member remained uninjured.

Nothing contained in this section shall limit or restrict the right of any person to receive Workers' Compensation benefits under Title 65.2.

1983, c. 351, § 51-122.3; 1990, c. 832.

§ 51.1-817. Salary deductions payable to estate or refunded.

If any police officer dies while in active service and leaves no dependents, the member's salary deductions shall be payable to the member's estate. If any police officer separates from service before becoming eligible for a pension, seventy-five percent of salary deductions shall be refunded to the member.

1940, p. 739; Michie Code 1942, § 3035l; Code 1950, § 51-124; 1990, c. 832.

§ 51.1-818. Funds for payment of pensions and benefits.

Any and all cash assets and funds not necessary for immediate payment of pensions or benefits shall be invested in securities that are legal investments under the laws of the Commonwealth for public sinking funds. Any funds raised by any police officers' pension and retirement board for the payment of pensions and benefits shall be paid over to the treasurer of such board who shall deposit and pay the funds as provided in this section to the credit of the board.

1940, p. 739; Michie Code 1942, § 3035n; Code 1950, § 51-125; 1956, c. 184; 1990, c. 832.

§ 51.1-819. Adoption of article optional by counties, cities, and towns; appeal.

Any county, city, or town in this Commonwealth having a police department may adopt the provisions of this article and establish a police officers' pension and retirement board if the governing body of the county, city, or town adopts a resolution approved by a majority of all the members thereof, by a recorded yea and nay vote.

Upon adoption of a resolution and establishment of the police officers' pension and retirement board, the board shall be vested with all the powers, authority, and duties established under this article.

A member shall be entitled to an appeal of right to the circuit court of the county or city which has jurisdiction of the board from any action on any matter in which the board has discretionary power.

1940, pp. 739, 740; Michie Code 1942, § 3035o; Code 1950, §§ 51-126, 51-126.1; 1990, c. 832.

§ 51.1-820. Police officers' pensions and retirements.

All of the provisions of this article, including all authorizations and all requirements, shall apply to all counties having the county manager plan of government, except Arlington County.

1974, c. 63, § 51-127.9; 1975, c. 272; 1990, c. 832.

Article 3. Counties Having Urban County Executive Form of Government.

§ 51.1-821. Police Retirement System.

Prior §§ 51-127.10 through 51-127.30 are continued in effect under subdivision 2 of § 51.1-805 as Chapter 303 of the Acts of Assembly of 1944, as amended.

1990, c. 832.

§ 51.1-822. Amendment, suspension, or revocation of retirement plan and trust.

The governing body of any county with an urban county executive form of government may by ordinance reserve the right to amend, suspend, or revoke the retirement plan and trust at any time, so long as the benefits payable under the plan are consistent with § 51.1-800. However, any amendment, suspension, or revocation shall not have the effect of diverting the trust fund to purposes other than the exclusive benefit of the participating employees or their beneficiaries until all liability for accrued benefits payable under the terms of the plan has been fully satisfied.

1990, c. 832.

§ 51.1-823. Appeal.

An appeal of right from the action of the retirement board of any county having an urban county executive form of government on any matter in which the board has discretionary power shall lie to the circuit court of the county which has jurisdiction of the board.

1990, c. 832.