The City of Lynchburg provides the following retirement benefits to eligible employees:
Virginia Retirement System
The Virginia Retirement System (VRS) is a defined benefit plan. Defined benefit plans promise employees a lifetime monthly benefit payable at retirement. The City contributes 20.96% and the employee contributes 5% towards the cost for the VRS benefit. The amount that employees receive at retirement is determined by a specific formula, not the amount of accumulated contributions in VRS account. The formula uses age at retirement, average final compensation, and years of service. By law, full-time employees are automatically enrolled. For more information, visit the VRS website. For plans, review these links:
457 Deferred Compensation Plan
The 457 Deferred Compensation Plan is a defined contribution plan. Employee contributions are deducted from earnings before taxes are applied (pre-tax). Employees bear the risk of earnings and losses associated with investment selections and the ups and downs of the market. For 2023, employees may contribute a maximum of $22,500 annually or $26,000, if over age 50. For more information, follow the links:
Saving to a Payroll Roth IRA builds upon your 457 plan. Income eligibility rules apply to contribution. Contributions may be withdrawn any time without taxes or penalties. Earnings may be withdrawn tax- and penalty-free if you have owned a Roth IRA for at least a five-year period and have a qualifying event, including age 59 1/2, a "first-time" home purchase, disability, or death. For 2023, the annual IRA contribution maximum is $6,500 annually or $7,500, if over age 50. For more information:
Part of your retirement income will come from Social Security. The City pays 7.65% to Social Security in addition to the FICA taxes withheld from employees' paychecks. To find out more about your Social Security benefit, follow the link: www.ssa.gov.
Information about the City of Lynchburg's retirement benefits can also be found in the Employee Policies & Procedures Manual.