12465 Warwick Boulevard, Newport News, VA 23606  Phone: (757) 591-4500



Retirement: Frequently Asked Questions


What is the multiplier and how will my retirement benefits be calculated?

The annual retirement benefit is calculated by multiplying your average final compensation (AFC) by your years of credited service and then by a factor known as the multiplier. The multiplier is currently 2%; the proposal will adjust the multiplier to 1.9% for credited service earned after the effective date of change.

How will reducing the multiplier affect my retirement benefit?

While circumstances may vary from employee to employee depending on their employment and salary record, most current employees will realize only a minor impact on their retirement benefit. Generally, employees with longer service will see a smaller impact. We have compared hypothetical situations to illustrate the potential impact.

Example: Using an average final compensation of $30,000 and 30 year credited service

An employee who retires before any changes are made will have their benefit calculated at $30,000 (AFC) x 30 years x .02 (multiplier) = $18,000 annual retirement benefit. By contrast, a new employee hired after the effective date of changes and who then works 30 years with an AFC of $30, 000 will have their benefit calculated at $30,000 x 30 x .019 = $17,100. This is a 5% lower benefit.

Current employees’ benefits will be calculated using the 2% multiplier for all credited service before the effective date of any change and using the 1.9% multiplier for credited service after the effective date of any change. The same AFC will be used for both calculations. Therefore, those with longer service will realize a lesser impact.

The following are examples of benefits using the same $30,000 and 30 years:

  • An employee has 28 years credited service before the effective date of changes and 2 years credited service after. The retirement benefit in this case will be $17,940 per year, $60 less a year or $5 less a month.
  • An employee has 25 years of credited service before the effective date of changes and 5 years after. The retirement benefit will be $17,850, $150 less a year or $12.50 less a month.
  • An employee has 10 years of credited service before the effective date of changes and 20 years after. The benefit will be $17,400, $600 less a year or $50 less a month.

You may calculate your approximate current or projected retirement benefit under the current plan by using the following formula:

Years credited service X average final compensation X .02 = annual benefit

You may compare this to the proposal by the following formula:

Years credited service under current plan X AFC X .02 PLUS

Years credited service under proposed plan X AFC X .019 = annual benefit

Included on this site is a benefit calculator for use in determining your estimated retirement benefit.

Calculate your Estimated Retirement Benefit

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Retirement Age & Vesting

I have 30 years service and had planned to work 2 more years. Won’t these changes mean I have to retire before I planned? Should I retire before any changes are made so I can protect my retirement and ensure a larger benefit?

While individual circumstances may vary, in almost every case, the longer you work the larger your retirement benefit will be regardless of whether the multiplier changes. 

  • If you retire at 30 years before any changes are made, your benefit will be $18,000.

  • If you have 30 years credited service and had planned to work to 32 years, your benefit under the current plan, assuming an AFC of $30,000, would be $19,200. 

  • Under the proposed plan, if you had 30 years credited service under the current plan and 2 years under the proposed plan, your benefit will be $19,140 per year, only $5 a month less than it would have been under the current plan but $95 more a month than if you retired at 30 years.

Will we be required to retire at 30 years? 


Why are new employees coming into the system continuing to receive vestment at 5 years? Since this new plan may result in many people taking immediate retirement to remain under the old system, it seems that this would be another way to save large amounts of money?

Virginia public pension plans have 5-year vesting. Increasing the City’s vesting period may impact recruiting and retention.

If I want to work longer in order to retire with the same benefit, how much longer will I have to work?

There are no changes to the length of time an employee may work. In fact, employees may choose to work longer to achieve a higher retirement benefit. In the examples used above, the employee with 28 years of service could achieve the same benefit as in the current plan by working 1 – 2 months longer. The employee with 25 years would have the same benefit with 3 months longer credited service.

Will the increase in retirement age be grandfathered?

The RRC recommended consideration of increasing minimum retirement age. It is still under consideration and no recommendations for how it would be implemented have been made. However, it is the desire of the RRC that if such a change is made, it be done in such a way to lessen any negative impact on those employees close to retirement. We do note, however, that this proposal would not impact service time requirements and that those who have 30 years credited service (25 for sworn Fire, Police and Sheriffs) may continue to retire at any age without penalty.

You may calculate service time required to achieve a certain benefit by using the calculator included on this site.

Calculate your Estimated Retirement Benefit

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COLA Changes

If the COLA change is effective July 1, 2008 and Joe retires April 1, 2008, when will he be eligible for a COLA?

Under the proposed plan, Joe would not receive a COLA until April 1, 2009 (for 3 months of that year: April, May and June). On July 1, 2009 and every July 1st thereafter, Joe will receive an annual COLA.

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AFC - Overtime

What is the Average Final Compensation (AFC) and how will it be calculated with the proposed changes?

The AFC is the average annual compensation during the employee’s 36 highest paid consecutive months of employment. Under the current system, some additional payments such as overtime and allowances have been included in AFC. Under the proposed changes, most of these added payments will not be included. However, for purposes of computing your AFC, these payments made to you in the past – before the effective date of any changes - will be included in determining your AFC. Such payments made after the effective date of change will not be included in determining your AFC.

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Close Schools Supplemental Plan to New Hires

I am currently a NNPS teacher. I am not vested into the NN Retirement Plan since I have been working only three (3) years within the school system. Is it correct to assume that I will be provided benefits under the NN Retirement Plan?

Once you are vested (five years of service), you will be eligible for retirement benefits.

In two years (2), when I am vested will my first three years (3) of teaching be calculated at the 2% or 1.9% amount?

The City provides a supplemental retirement plan for Virginia Retirement System (VRS) participants. The multiplier for the City’s Supplemental Retirement Plan is the difference between the City and VRS multiplier, as follows:

Current Plan:

City Multiplier = 2.0 %    VRS multiplier = 1.7%
City Supplement = 2.0% – 1.7% = .3%

Proposed Change:

For years of service after the change
City Supplement: 1.9% - 1.7% = .2%

If you have 3 years of service prior to the effective date of change, the multiplier of .3% will be used to calculate your benefit. The multiplier of .2% will be years for the two years earned after the effective date of change.

Vesting - Schools:

If the change regarding new NNPS employees (who are also VRS eligible) happens, would someone who is actively employed with NNPS on the effective date of the change, but not yet vested in the NNERF, continue to remain in the plan and be able to become vested.

Yes, non-vested VRS-participants will continue in the plan.

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Eligibility for Retirement: Exchanged or Purchased Time

Credited Service

Credited service for retirement benefits calculation includes time worked in an active pay status, purchased time, ported time, unused paid medical leave (PML) and time gained through the leave exchange program.

Under the proposed changes, credited service purchased, ported or gained in the leave exchange program AFTER AN EFFECTIVE DATE will not be used to determine retirement eligibility. Time purchased, ported and exchanged PRIOR TO THE EFFECTIVE DATE, will be counted in the determination of retirement eligibility. This proposed change only applies to determining retirement eligibility based on credited service. The determination of your retirement benefit will continue to include time work, purchased, ported and exchanged.

Example: An employee, age 38, has 15 years of actual service time, ported 3 years of qualified time from another plan and has 12 months of credited service from participation in the PPL Exchange program on the effective date of change. Under the proposed change, the employee would be recognized as having 19 years of service time towards retirement eligibility. The employee would have to work another 11 years (6 years for sworn public safety) to reach the minimum service retirement. Once retirement eligibility has been met, any additional credit gained from the Exchange program and unused PML will be added to service time to calculate the final retirement benefit.

Currently, 75% is the maximum benefit. It takes 37.5 years to reach this. Will this change?

75% of AFC will remain the maximum retirement benefit. Under the proposed changes, the time to reach the 75% maximum will increase depending on credited service on the date of change.

To compute the approximate additional service time required to achieve 75%, use the calculator included on this site or apply the following formula:

  • Multiply your current years of credited service as of the effective date of any change by 2.
  • Subtract this number from 75.
  • Divide that number by 1.9.
  • This will give you the approximate additional years required to reach 75%. 

Example:  An employee with 30 years credited service as of the effective date of any change would reach 75% with approximately 37 years 8 months credited service, an additional 2 months.

How will accrued Paid Medical Leave (PML) be credited? 

There will be no change. Accrued PML is considered as credited service for calculation of your retirement benefit but it does not count toward reaching retirement age or toward reaching the minimum service time for retirement.

You may calculate service time required to achieve a certain benefit by using the calculator included on this site.

Calculate your Estimated Retirement Benefit

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Maintain Current Plan Design

We have always been told that the city has higher benefits because our salaries are lower. If our retirement benefits are reduced, shouldn’t the City pay higher salaries?

We have long enjoyed both excellent benefits and competitive salaries. Our benefits, even with the proposed retirement changes, will continue to be among the most generous in the area and they are an important component of our total compensation. There have been periods when our salaries have been in a lower competitive position. However, in recent years, we have placed much emphasis on achieving competitive salaries and our salaries are in fact in a very strong competitive position in this area. Like many other employers nationwide, including most public employers, we have to reassess our benefits programs to ensure that they remain sustainable. The actions we are proposing are designed to allow us to remain in the forefront of compensation and benefits and to continue to be an employer of choice.

Why will these changes affect current employees? Why can’t the changes apply only to new employees?

Based on the studies conducted by the RRC, the actual financial impact of making system changes that only affect new hires is negligible in the first 10-12 years. While over time, the net effect would be to reduce the NNERF’s liability, it would take 20+ years for the impact to provide a significant reduction to the unfunded liability if only applied to new hires. The current NNERF unfunded liability has a direct impact on the City’s fiscal health and it must be addressed proactively in the short term.

For example, several people have suggested changing the vesting for retirement benefits from 5 to 10 years for new hires. While this would seem logical, the reality is that a change in vesting from 5 to 10 years for new hires would reduce the unfunded liability by less than $4 million over a period of 10 years; however, no municipality that was studied, including the State, exceeds a 5 year vesting period for retirement eligibility. Such a change would significantly impact our ability to recruit and hire new employees.

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