The Hybrid Retirement Plan is funded through mandatory and voluntary contributions made by the employee and employer to both the defined benefit and the defined contribution components of the plan.
Defined Benefit Component
Both the member and the employer make contributions to fund the defined benefit component of the Hybrid Retirement Plan. Members contribute a mandatory 4 percent of creditable compensation each month to their defined benefit member contribution account on a pre-tax salary reduction basis. The actual amount contributed by the employer to the defined benefit component of the hybrid plan will be the total employer contribution rate for that employee, less any employer contributions to the defined contribution component of the plan for that employee.
Defined Contribution Component
The defined contribution component of the Hybrid Retirement Plan provides the Hybrid 401(a) Cash Match Plan. Members contribute a mandatory 1 percent of their creditable compensation each month to their 401(a) plan account. Employers also contribute a mandatory 1 percent as well as matching contributions on any voluntary contributions a member makes, which are deposited to this account. Members invest these contributions through their hybrid 401(a) plan.†
†Some provisions related to the voluntary contributions and associated employer match may differ for school division employees who have elected to use an employer-sponsored hybrid 403(b). For additional information, contact your human resource office.vrs