Virginia Law

Article 1. General Provisions.

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.

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.

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.

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.

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.

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.

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.

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.