Chapter 11: Faculty Benefits Program
Below is an overview of required and optional benefits available to faculty members. Please contact the Human Resources Service Center within the Division of Human Resources to obtain information and to make changes to benefits.
Required benefits are mandated by federal, state, or university regulations.
Participation in the group life insurance program is required of all full-time and part-time salaried faculty. The university pays the monthly premium for the group life insurance.
Coverage is effective on the first day of employment. The amount of the insurance is determined using the annual salary rounded up to the nearest thousand dollars; then doubled. Thus, if the salary is $49,400, the amount of insurance is $100,000. In cases of accidental death, the insurance is four times the rounded annual salary. In the example above, the insurance payout would be $200,000.
A faculty member who leaves the university may convert the term insurance policy to a private policy if the request is made within 31 days after termination. Eligibility to make this conversion will depend upon individual circumstances. Please contact the Human Resources Service Center for detailed information.
Faculty who have reached their earliest reduced retirement eligibility will have continued life insurance coverage after they separate from the university. The life insurance amount will decrease by 25 percent on January 1 after one full calendar year of separation. The face amount will continue to decrease by 25 percent each January thereafter until the face amount is equal to half of the final salary (or one-fourth of the original face amount). All accidental death and dismemberment insurance terminates at separation.
The life insurance program is administered through the Virginia Retirement System and is underwritten by Securian Financial. Per IRS requirements, life insurance in excess of the established excludable limit, in a calendar year, is taxable.
Long-term disability insurance provides coverage for 60 percent of salary after a six-month waiting period if the employee is deemed disabled. These benefits may be offset by Social Security, federal retirement (if applicable), and Virginia Retirement System benefits. The maximum monthly benefit is $15,000; and the minimum monthly benefit is $100. In addition to paying a monthly benefit, a contribution of 10.4 percent (8.5 percent for faculty members hired on or after July 1, 2010) of base salary is paid into the Optional Retirement Plan for those faculty members receiving disability benefits. The Standard Life Insurance Company underwrites the program. This benefit is not optional, and the faculty member pays the monthly premium, which is approximately .25 percent of the employee’s salary.
All eligible faculty are required to participate in either the Virginia Retirement System (VRS) plan or a defined-contribution Optional Retirement Plan (ORP). Faculty have 60 days from the date of appointment to choose either the Virginia Retirement System or an ORP. If no choice is made, the retirement default is the VRS Hybrid Plan (or whichever VRS plan into which the faculty member might be grandfathered).
Part-time salaried faculty members working half time or more for at least six months on a calendar year appointment or one semester if on an academic year appointment are eligible to participate in either the university’s defined contribution ORP or the Virginia Retirement System to the extent permitted by VRS.
VRS Plan 1: Faculty members who have Virginia state service prior to July 1, 2010 and have five years of VRS or ORP service prior to January 1, 2013 (and still maintain an account balance in their retirement account) will be considered for the VRS Plan 1.
VRS Plan 2: Faculty members who have Virginia state service before July 1, 2010 and did not have five years of service as of January 1, 2013 or have Virginia state service between July 1, 2010 to December 31, 2013 (and still maintain an account balance in their retirement account) will be considered for the VRS Plan 2.
VRS Hybrid Plan: Faculty members hired after January 1, 2013 with no previous Virginia state service or faculty members hired after January 1, 2013 and closed out or rolled over a previous Virginia state retirement account will be considered for the VRS Hybrid Plan.
The VRS Hybrid Plan is a qualified plan under IRS code section 401(a) and contains both a defined benefit portion and a defined contribution portion. Both the employee and the employer make contributions to fund the defined benefit portion of the Hybrid Retirement Plan. The employee contributes four percent of their creditable compensation. The employer contribution is actuarially determined. The employee is required to contribute 1 percent to the defined contribution portion of the Hybrid Retirement Plan. The employee also has the option to voluntarily contribute up to an additional four percent in .5 percent increments. The employee’s voluntary contributions will be made to the state deferred compensation plan which is qualified under IRS code 457(b). The employer must match the first one percent of voluntary contribution with a corresponding contribution of one percent of the employee’s creditable compensation. Each of the employee’s additional .5 percent increases will be matched by the employer with a .25 percent contribution. Employees can increase or decrease their contributions on a quarterly basis.
Defined benefit vesting is the minimum length of service members need to qualify for a future retirement benefit. Vesting occurs when a member has at least 60 months of service credit. If vested, members are eligible to receive all member contributions upon retirement or leaving employment. If members are not vested, employer-paid contributions are forfeited upon retirement or leaving employment.
Defined contribution vesting is the minimum length of service members need to be eligible to withdraw contributions. Vesting is based upon the length of participation in the plan. Upon retirement or leaving employment, members are eligible to withdraw a percentage of employer contributions based upon the following schedule:
After two years, members are 50 percent vested and may withdraw 50 percent of the employer defined contribution plan contributions.
After three years, members are 75 percent vested and may withdraw 75 percent of the employer defined contribution plan contributions.
After four or more years, members are 100 percent vested and may withdraw 100 percent of employer defined contribution plan contributions.
Within 60 days of the date of appointment, eligible faculty may select the Optional Retirement Plan (ORP) in lieu of the defined benefit Virginia Retirement System or the Hybrid Plan. ORP contribution rates are as follows:
For faculty members hired before July 1, 2010, the university contributes 10.4 percent of base salary to the 401(a) ORP account.
For faculty members hired on or after July 1, 2010, the university contributes 8.5 percent of base salary and the employee contributes five percent of their base salary to the ORP.
Benefits at retirement are based on contributions, net earnings,
and age. The faculty member can choose among a number of investment options. The ORPs are qualified under IRS code section 401(a) and vesting is immediate. Investment risks are borne by the employee with risks varying based on types of funds selected. Fidelity and TIAA are the providers for Virginia Tech’s ORPs.
Tenured faculty members (or those with a continued appointment in University Libraries or the Virginia Cooperative Extension) who are at least 60 years of age and have at least 10-20 years of full-time service at Virginia Tech are eligible for the university’s voluntary transitional retirement program. The program allows the university to make it possible for long-term faculty to remain actively involved in the life of the institution while reducing their professorial responsibilities as they transition towards full retirement. Further details of the program are provided Policy 4410, “Voluntary Transitional Retirement Program for Tenured Faculty.”
Regular faculty are provided with 1040 hours of sick leave at the time of hire. This equates to six months of income protection, i.e., short-term disability coverage. After short-term disability, is exhausted, the faculty long-term disability program outlined in chapter eleven, “Long-Term Disability Insurance,” takes effect and provides disability income to age 65 or for five years if over age 60 at the onset of disability.
This benefit is not available to faculty in restricted positions. Faculty in restricted positions accrue five hours of sick leave per pay period. Beginning July 1, 2012 all of Virginia Tech’s restricted faculty members who are not enrolled in the Virginia Sickness and Disability Program (VSDP) will be covered under a short-term disability plan administered by the Standard Insurance Company.
Restricted faculty who accrue sick leave each pay period will automatically be enrolled in the Standard Insurance Company short-term disability plan. These employees will continue to accrue sick leave and will not be required to pay any additional premium for the coverage.
The Standard Insurance Company short-term disability plan allows employees who are on approved short- term disability leave to collect up to 60 percent of their regular salary for up to six months, after the initial seven-day waiting period. Employees who are still considered disabled after six months will transition into the faculty long-term disability plan.
Alternatively, faculty members on restricted appointments who enroll in the Virginia Retirement System may consider the Virginia Sickness and Disability Plan (VSDP), which provides short-term disability for six months and long-term disability to age 65 or later depending on age at the time of disability. There is a one- year waiting period from the date of appointment under VSDP for the short- and long-term disability benefits. Beginning September 1, 2017 per VRS directive, the election for coverage under VSDP is irrevocable. Therefore, if faculty members on restricted appointments had previously elected coverage under VSDP then later convert to regular faculty appointments, on or after September 1, 2017, the applicable VRS directive disallows VSDP opt-out election. Their previous election for disability benefits are provisioned in the VSDP as outlined above.
There are several insurance plans and benefits programs available for faculty members. Some have a portion of the premiums paid by the university; others are the employee’s responsibility.
Accidental death and dismemberment insurance is an optional program available to faculty and staff members on at least half-time appointment. The policy is with Zurich.
Accidental death and dismemberment insurance is available in multiples of $5,000, in a range of benefits from $10,000 to $250,000. The premium is paid entirely by the employee. Coverage is effective the first day of the month following the month in which the application is received by Human Resources. An employee may enroll at any time in this program.
This coverage has full 24-hour, 365-days-a-year protection against accidents occurring in the course of business or pleasure. The insurance includes accidents whether on or off the job, occurring in or away from the home, or traveling by public or private transportation. The benefits provided under this plan are payable in addition to other insurance that may be in effect at the time of accident. There are no geographical limits on this coverage. This policy also provides travel assist coverage at no additional cost.
Health insurance is an optional program available to all full-time and eligible part-time faculty and staff members. Coverage is offered for the member’s spouse and for eligible dependents through the end of the calendar year that they reach age 26. Employees may participate in the state employees’ health insurance plans by contacting the Human Resources Service Center.
For employees who work at least .75 percent time the employer pays a major portion of the employee’s health care premium. Employee plus one and family coverage is also available under this plan. Employees whose FTE is between .50 and .74 are eligible to enroll in a health care plan, however the employee pays 100% of the premium.
Newly eligible employees (newly hired or rehired) must request enrollment within 30 calendar days to enroll in a health plan and/or flexible spending accounts (FSA) offered by the state. If the enrollment action is received within the 30 calendar day time frame, coverage will be effective the first of the month coinciding with or following the date of employment. The 30-day countdown period begins on the first day of employment. For employees whose employment starts on the first day of the month, and who have completed an application within 30 calendar days, the coverage will begin on their date of hire.
Status changes to an eligible position have up to 60 calendar days to enroll in a health plan offered by the state. The 60-day countdown period begins on the date of the status change. Coverage will be effective the first of the month following receipt of the request or following the event, whichever is later. When the later date is the first of the month, changes are effective that day.
Enrollment or enrollment changes cannot be made outside of the open enrollment period unless there is a qualifying mid-year event such as marriage, divorce, birth, or adoptions. Enrollment must be made within 60 calendar days of the qualifying event.
Open enrollment is usually held during the month of May each year for employees desiring to enroll or to make changes in their health care program. Any enrollment or changes made during open enrollment are effective on July 1.
Salaried faculty who work at least 20 hours per week (.50 FTE) are eligible to enroll in the commonwealth’s health flexible spending account (FSA), which allows them to set aside part of their income on a pre-tax basis and then use that money to pay for eligible out-of-pocket health care expenses for themselves, a spouse, and dependents. The minimum that may be set aside is $10 per pay period; the maximum is $2,550 per year. A monthly pre-tax administrative fee does apply.
Faculty must request enrollment within 30 calendar days to enroll in the health FSA. Each year during open enrollment in the spring, faculty may renew FSA accounts or elect to enroll for the first time. Changes made during open enrollment are effective the following July 1. Certain qualifying mid-year events may be made outside the open enrollment period if the request for change is made within 60 calendar days of the qualifying event. Contact the Human Resources Service Center about specific qualifying mid-year events for family status change.
Salaried faculty who work at least 20 hours per week (.50 FTE) are eligible to enroll in the commonwealth’s dependent care flexible spending account (FSA), which allows them to set aside part of their income on a pre-tax basis to pay for eligible dependent care expenses throughout the coverage period for the care of a child, disabled spouse, elderly parent, or other dependents who are physically or mentally incapable of self- care so that the faculty member (and spouse) can work or actively seek work. The minimum that may be set aside is $10 per pay period; the maximum is $5,000 per year. A monthly pre-tax administrative fee does apply.
Faculty employees must request enrollment within 30 calendar days to enroll in the dependent care (FSA). Each year during open enrollment in the spring, faculty may renew FSA accounts or elect to enroll for the first time. Changes made during open enrollment are effective the following July 1. Certain qualifying mid- year events may be made outside the open enrollment period if the request for change is made within 60 calendar days of the qualifying event. Contact the Human Resources Service Center about specific qualifying mid-year events for family status change.
The Employee Assistance Program (EAP) is a counseling and referral service available to faculty and staff to help deal with a range of problems that might have an impact on their work lives as well as personal lives. The EAP provides confidential short-term intervention, assessment, and referral services for benefitted employees. Employees may self-refer to the EAP. A supervisory referral can be made when a work performance or work site problem exists. Supervisors must consult in advance with Employee Relations in Human Resources on appropriate ways to address the issue with the employee.
The Employee Assistance Program is part of the health benefits program provided by the Commonwealth of Virginia, which contracts with a provider of mental health and behavioral management services. The contract provides employees with several free counseling sessions with a mental health professional certified by the approved EAP contractor. The cost of additional services, beyond the specified number of free sessions, is the responsibility of the employee.
With appropriate approvals by senior administrators, an employee may be referred for a mandatory fitness- for-duty examination in cases where the employee poses a hazard or risk to self or others, or if a determination of the employee’s medical or psychological fitness to perform the essential job functions is needed. A supervisor who is considering a mandatory EAP referral must first have the approval of the vice president for human resources or designee, as well as the relevant vice president or designee for faculty.
Protections for employees to assure the privacy of their personal health information and to prevent abuse of mandated referrals by supervisors are included in Policy 4345, “Employee Assistance Program.”
These programs offer opportunities for employees to invest a portion of their salaries and/or wages and delay tax liabilities until a later date. Full-time or part-time salaried faculty and staff may be eligible for the employer-paid cash match program. Please contact the Human Resources Service Center for detailed information.
Informational packets are available in Human Resources. These packets contain a brief description of the tax sheltered annuity or deferred compensation plans, and the agent’s name and address. Information is also available on the 401(a) cash match plan.
Employees may use the services of two credit unions. Payroll deductions may be made for the Freedom First Credit Union. Its main office is located at 1204 South Main Street, Blacksburg, with ATMs and/or branch services available in several Blacksburg campus locations.
Any full time and part-time faculty member employed by the Commonwealth of Virginia is eligible for membership in the Virginia Credit Union. Payroll deductions are not available for the Virginia Credit Union. Employees desiring information or membership in either credit union should contact the credit union directly.
Payroll deduction may be made for participation in the Commonwealth of Virginia Campaign (CVC), which provides contributions to many national, state, and local social and health charitable organizations, including several local United Way organizations.
Optional life insurance for the faculty member, the spouse, and children is available through the optional life insurance program. If you apply for optional life insurance within 31 days from the date of employment, you may receive all options, up to a maximum death benefit of $400,000, without providing evidence of good health. Coverage may be applied for outside of the 31 days, but evidence of insurability will be required. The coverage is provided by Securian Financial.
Legal Resources is an optional benefit that may be purchased which provides comprehensive legal services and representation for the employee, spouse and dependent children paid at 100 percent for the most often-needed legal services. Other services are offered at a 25 percent discount. New employees mayenroll within 60 days of employment and all other changes to coverage may be made during open enrollment, which for this benefit is annually during the month of September.
New York Life Insurance Company offers a guaranteed issue whole life insurance during special enrollment periods. After the initial enrollment period in 2015, only new hires and those who initially elected to take at least a minimum $5,000 policy will be allowed to add to their coverage on a guaranteed basis. New York Life whole life policy is an optional program available to full time faculty and staff members who meet eligibility requirements.
Aflac offers several supplemental insurance plans that pay cash benefits to help with expenses due to injury or illness. The cost of these plans will vary based upon the level of benefits purchased. The benefits are pre-determined and paid regardless of any other insurance that an individual may have. Aflac offers the following plans: accident plan, cancer plan, critical care, hospital protection, and short-term disability. Aflac is an optional program available to faculty and staff members on at least half-time appointment. New hires may enroll within 30 days and all other changes may be made during open enrollment, which for this benefit is held annually during the month of September.
Genworth Life Insurance Co. offers long-term care insurance coverage, under the Commonwealth of Virginia Voluntary Group Long Term Care Insurance Program, which provides assistance with costs related to long-term care services such as nursing home care or at-home care to assist with bathing, eating or other activities of daily living which may not be covered by most medical plans. Participant-paid coverage provides a monthly benefit allowance for covered long-term care expenses. Employees do not have to be a VRS member to be eligible, and family members may also apply for coverage. Employees who enrolled in the long-term care insurance program before December 31, 2016, will continue their coverage under that program.
All employees are covered against job-related illness/injury by the Commonwealth of Virginia Worker’s Compensation. Employees who lose their job through no fault of their own are eligible to apply for unemployment insurance through the Virginia Employment Commission.
All employees of the university are covered by unemployment insurance. If for some reason employees become unemployed by no fault of their own, they may qualify for this insurance. If employees lose their jobs, they should contact the Virginia Employment Commission immediately to file an unemployment claim.
The university provides severance benefits for eligible faculty who are involuntarily separated due to budget reduction, agency reorganizations, or workforce downsizings for reasons unrelated to performance or conduct. Faculty hired on restricted appointments funded from sponsored contracts or grants, or term appointments with a specified ending date, regardless of funding source, are not eligible to receive severance benefits. Non-reappointments and voluntary resignations for any reason are not deemed “involuntary separation” for purposes of the severance policy.
All employers are required to provide protection to their employees for job-related injuries, illnesses, or loss of life. The purpose of the workers’ compensation program is to ensure that all university employees with injuries or illness arising out of and during the course of employment with the university are offered fixed, certain, and speedy relief. The Commonwealth of Virginia workers’ compensation services are provided by MC Innovations, LLC, Workers’ Compensation Department, PO. Box 1140, Richmond, VA 23208-1121.
In the event of a job-related injury or illness, Policy 4415, “Workers’ Compensation”, provides procedures the employee and supervisor should follow. An injured employee is required to report an accident or illness to the direct supervisor as soon as possible. Once an employee reports a job-related injury, the supervisor must file the employer’s accident report within 24 hours of the occurrence. A claims adjuster from Managed Care Innovations, LLC, the university’s worker’s compensation carrier, will be assigned to handle the claim.