Your retirement plan is funded by both employee and employer contributions. Your employee contributions are a biweekly payroll deduction taken on base compensation as well as other cash payments that fall under the definition of “compensation earnable” (for Legacy tiers) or “pensionable compensation” (for PEPRA tiers 5, 6, 7 & 8).
Your contributions are credited to your individual account. Interest is credited to member accounts each June 30 and December 31. Member contributions may be paid in whole or part by the employer as a result of employee-employer negotiated retirement contribution “pick-ups”. Employer-paid employee contributions made in lieu of wages are credited to the member’s account.
Contributions are required as long as you are in service. If you are a Safety Tier 1 member, your contributions stop after you reach 30 years of continuous service. Retirement contributions may not be withdrawn prior to separation of service, even in cases of personal financial hardship, and there is no provision allowing members to take a loan on any portion of their account balance.
In addition, employer contributions are made each pay period and go toward general funding of the retirement program, not into a specific account for you.
The combination of employee contributions, employer contributions, and investment earnings are what fund VCERA and allow members to draw a lifetime monthly benefit at retirement.
You will receive a Retirement Benefits Statement annually as a member of VCERA. The statement includes a summary of your annual contributions, employer “pick-up” of employee contributions (if applicable), interest credited, accrued retirement service credit, and retirement benefit projections.