Get Started With the Commonwealth of Virginia 457 Deferred Compensation Plan
Why Should You Adopt the Plan?
The Commonwealth of Virginia 457 Deferred Compensation Plan (COV 457) allows your employees to set aside additional savings toward retirement through before-tax contributions and Roth after-tax contributions. All employees of VRS-participating employers, including wage and part-time employees, are eligible to participate in the plan.
Adopting the COV 457 Plan provides benefits to you and your employees. Not only does it ease your administrative burden and overlap, it provides employees seamless integration with myVRS for a holistic retirement outlook.
You Have the Option to Consolidate
Employers with an existing 457 plan may transition those assets to the COV 457 plan. ICMA-RC, our record keeper for defined contributions plans (DCP), and VRS will work closely with you and your outgoing record keeper to ensure a seamless transition for your employees.
Low Fees Benefit Participants
VRS offers one transparent administrative fee to record keep your employees' Defined Contribution Plan (DCP) accounts. The current administrative fee is $30.50 per year for each unique participant. Participants enrolled in more than one VRS DCP account with ICMA-RC (e.g., COV 457, Virginia Cash Match plan or the defined contribution component of the Hybrid Retirement Plan), only pay a total of $30.50 per year. This administrative fee of approximately $2.54 is deducted monthly from the participant's account balance.
Account Information Is Easily Accessible
Your employees can manage their accounts using state-of-the-art online tools, such as the DCP Mobile app, text access and retirement calculators.
You'll Be in Good Company
Join the state agencies, political subdivisions and school divisions that already participate in the COV 457 Plan. View participating employers.
Experience a Seamless Adoption Process
- Your governing body first must pass a resolution to adopt the plan.
- The plan becomes effective between 60 and 90 days after the governing body adopts the plan.
- The transition to the new plan typically takes 90 to 120 days.
- To learn more about adopting a DCP plan, contact your employer representative or call 888-827-3847.
Pair It With the Cash Match Option
If you have previously adopted the COV 457 Plan, you may wish to consider adopting the Virginia 401(a) Cash Match Plan. VRS research indicates that participation rates are higher when employers offer both the COV 457 and 401(a) Cash Match plans.
The Virginia 401(a) Cash Match Plan provides an additional incentive for your employees to save for retirement. Full-time and part-time salaried employees making continuous contributions to the COV 457 Plan are eligible to receive a cash match. Employees covered under the Hybrid Retirement Plan must maximize voluntary contributions to that plan before being eligible to receive an employer match under the Virginia Cash Match Plan. Political subdivisions and school divisions select the match amount.