Defined Benefit Plan

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One of the most valuable benefits offered by your employer is a unique retirement program known as a defined benefit (DB) plan. Unlike any other employment benefit, a DB plan offers you retirement income that will last your lifetime!

VCERA is a multi-employer, defined benefit, public pension plan qualified under Section 401(a) of the Internal Revenue Code to administer this lifelong benefit. VCERA provides its eligible members with pension payments that are calculated based on a formula “defined” by law, not on your retirement contributions. VCERA is therefore different from a defined contribution (DC) plan, where benefits are based on contributions and investment earnings that can eventually be exhausted.

Your lifetime VCERA pension will be based on your age at retirement, total years of retirement service credit and final average compensation. Generally, increasing any of these factors will increase your pension. A fourth calculation factor is benefit tier, which was assigned based on your VCERA membership date and employment classification. Some of the unique advantages of VCERA’s defined benefit plan include:

  • Financial Security. Retired members receive a pension payment every month for the rest of their lives. When the retiree dies, an eligible beneficiary (e.g., spouse) may also receive a lifetime continuance.
  • Inflation Protection. An annual, compounding cost-of-living adjustment (COLA) is applied to retirement benefits each April. COLAs apply only to the eligible service credit of VCERA’s Safety members, General Tier 1 members and SEIU-represented General members.
  • Professional Management. VCERA’s pension funds are managed by professional investment managers, not individual plan participants.
  • Disability Retirement. Members who have been permanently incapacitated from performing their normal job duties can apply for a disability retirement. If granted, the benefit is payable for life.
  • Survivor Benefits. When a VCERA retiree dies, there are survivor benefits available to eligible beneficiaries, such as a monthly continuance and $5,000 death benefit.

VCERA provides these valuable benefits to more than 18,500 active, deferred, and retired members and their beneficiaries. Because the benefits are determined by law and not subject to contribution balances or investment market fluctuations, you can rely on them. For this reason, VCERA extends to its members a lifetime guarantee, a bedrock commitment, the fulfillment of a “pension promise” that you can take to the bank—every month for life.