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Frequently Asked Questions
- Who pays for the ERFC retirement program?
- I understand that ERFC and ERFC-2001 are Defined Benefit Plans. What does that mean?
- Does Social Security affect my retirement benefits?
- How is interest credited to my ERFC member contributions account?
- When will I receive a statement of my account balance with ERFC?
- Can I retire at any time during the school year?
- Do I have to apply for retirement benefits, or will I receive my benefits automatically?
- When should I apply for retirement with ERFC?
- What documentation will I need to submit with my retirement application?
- Can my Unused Sick Leave be applied to make me eligible for retirement?
- Can I continue my health and dental insurance coverage when I retire?
- Can I continue to participate in the FCPS Flexible Spending Account and/or the Tax-Deferred Annuity programs after retirement?
- How can I arrange to meet with an ERFC retirement counselor?
- What happens to my ERFC contributions if I die before taking retirement?
- If I have designated my spouse as my beneficiary and we are later divorced, is that beneficiary designation cancelled automatically?
- Is there a limit to the benefit amount I can receive from ERFC?
- Are retirement benefits taxable?
- What deductions are withheld from my monthly ERFC retirement benefits?
- Will I receive cost-of-living (COLA) adjustments with my ERFC benefit?
- What are my ERFC benefit payment options?
- What happens to my ERFC retirement benefits when I die after taking retirement?
- Who pays for the ERFC retirement program?
The ERFC retirement program is funded by three sources: member contributions,
employer contributions, and investment income. ERFC members contribute 4 percent
of their paid contract salary or base compensation. The exact share of FCPS
contributions to ERFC is determined by the Fairfax County School Board as part of the
budget process, upon the recommendation of the ERFC Board of Trustees and its
actuary. Investment income, which comes from investing the Plan’s assets, provides the
major source of funding for the Plan.
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- I understand that ERFC and ERFC-2001 are Defined Benefit Plans.
What does that mean?
A defined benefit retirement plan provides eligible members a specified monthly benefit
at retirement. Under a defined benefit plan, a set formula is established and used to
compute the retirement annuity. The amount of the benefit payments is not a function
the investment returns. ERFC and ERFC-2001 are defined benefit retirement plans,
qualified under section 401(a) of the Internal Revenue Code.
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- Does Social Security affect my retirement benefits?
Social Security benefits do not affect benefit payments provided to members hired on
or after July 1, 2001, covered under the ERFC 2001 Plan structure.
ERFC, the legacy plan, which covers members hired prior to July 1, 2001, was designed
specifically as an early retirement plan to supplement the benefits provided by VRS and
Social Security. Under the ERFC benefit structure, members selecting the standard
benefit payment type receive a lifetime benefit amount plus an additional temporary
benefit, which is paid only from the time of retirement until the member is eligible for
full Social Security benefits. The temporary ERFC benefit payment is not paid if you
retire after full Social Security eligibility. Your date of birth is the factor that determines
the age at which you will become eligible for full Social Security benefits, as shown in the
following chart.
| If You Were Born |
Eligible Age for Full Social Security Benefits |
| Jan. 1, 1938 or earlier |
65 |
| Jan. 2, 1938 - Jan. 1, 1939 |
65 and 2 months |
| Jan. 2, 1939 - Jan. 1, 1940 |
65 and 4 months |
| Jan. 2, 1940 - Jan. 1, 1941 |
65 and 6 months |
| Jan. 2, 1941 - Jan. 1, 1942 |
65 and 8 months |
| Jan. 2, 1942 - Jan. 1, 1943 |
65 and 10 months |
| Jan. 2, 1943 - Jan. 1, 1955 |
66 |
| Jan. 2, 1955 - Jan. 1, 1956 |
66 and 2 months |
| Jan. 2, 1956 - Jan. 1, 1957 |
66 and 4 months |
| Jan. 2, 1957 - Jan. 1, 1958 |
66 and 6 months |
| Jan. 2, 1958 - Jan. 1, 1959 |
66 and 8 months |
| Jan. 2, 1959 - Jan. 1, 1960 |
66 and 10 months |
| Jan. 2, 1960 or later |
67 |
Beginning in July 2004, ERFC Plan members were offered an alternative benefit
payment type that provides a Level Lifetime Benefit (LLB) with no change in benefit
payments at full Social Security age. The LLB benefit payment type is designed to
provide members a benefit that is the actuarial equivalent to the standard benefit
payment, with an additional guarantee that the annuity will be at least as valuable
as the member’s contribution account.
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- How is interest credited to my ERFC member contributions account?
Interest is credited to your ERFC member contributions account (including payments
for purchased service under the ERFC benefit structure) each year on July 1st. The
interest paid is based on the balance of your Accumulated Contributions as of July 1st of
the preceding year. The interest rate is set currently at 5%, unless the Board of Trustees
determines the need to adopt a different rate for a particular fiscal year. Be aware that
once you begin to receive ERFC retirement benefits, no further interest will be credited
to your account.
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- When will I receive a statement of my account balance with ERFC?
ERFC member contribution statements are distributed annually in the early fall.
These individual statements are marked confidential and mailed directly to the home
addresses of all active and deferred vested ERFC members. Each benefit profile
statement cites the member’s account balance effective July 1st of the preceding fiscal
year, noting changes during the fiscal year and interest credits.
To ensure that you receive your annual account statements, make certain that you keep
ERFC apprised of your current home address. This is especially important for those
members who may leave active FCPS employment while retaining contributions on
account with ERFC. Any discrepancies in your benefit profile statement should be
reported immediately to ERFC.
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- Can I retire at any time during the school year?
You may retire at any time during the school year. However, all benefit payments
commence on the first of the month. If your FCPS employment terminates on the first
day of the month, your benefits can begin effective on that day. Otherwise, your benefits
will begin on the first day of the following month.
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- Do I have to apply for retirement benefits, or will I receive my benefits
automatically?
ERFC benefits are not paid automatically; you must submit a retirement application and
supporting documents to initiate your benefit payments. If you delay your application,
you may lose a portion of your benefits, because retroactive payments are limited to a
90-day window before the application date.
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- When should I apply for retirement with ERFC?
You should contact ERFC at least 120 days before you plan to retire. This will allow
sufficient time for ERFC to prepare your individual benefit estimates and to process
your requests. You will also want to allow yourself plenty of time to review your options
carefully before you must lock in your elections. Remember, once you are retired, most
of your benefit options cannot be changed. Please also note that the 120-day allowance
is especially important if you are planning to retire on July 1st. This is the most popular
retirement date, and therefore spring is always the busiest time of the year at ERFC.
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- What documentation will I need to submit with my retirement
application?
Upon applying for retirement, you will need to provide the following documents:
- Documented proof of birth
(A certified copy of your birth certificate is preferred. Married women should print their
full current name and Social Security number on the back of any documented proof of birth.
- Your Military DD-214 discharge certificate
(If applicable, and hired prior to July 1, 2001)
- Your beneficiary’s birth certificate and Social Security card
(Applicable only if you choose a survivor benefit payment option)
- A certified copy of your marriage certificate
(Applicable only if you choose a survivor benefit payment option, and your Nominated
Beneficiary is your spouse or former spouse)
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- Can my Unused Sick Leave be applied to make me eligible for
retirement?
If you retire under the legacy plan, ERFC, your Unused Sick Leave is converted
automatically to retirement service credit at the time of retirement, unless you make
arrangements with FCPS Payroll Services, prior to termination of employment, to
transfer it to another Virginia school district. Unused Sick Leave cannot be used to
reach vesting or to make you eligible for early retirement. However, if you are a fully
vested FCPS employee, age 55 or older at the time you terminate employment, your
Unused Sick Leave may be used to meet the 25-year service requirement for full ERFC
benefits.
FCPS employees hired on or after July 1, 2001 and covered under the ERFC-2001
benefit structure are not eligible to convert their unused sick leave into retirement
service credit.
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- Can I continue my health and dental insurance coverage when I retire?
At this writing, you may continue to opt for the insurance coverage plans FCPS offers to
employees, including health and dental coverage for you and your dependents, optional
life insurance, and long-term care insurance. FCPS currently provides retirees, age 55
and older, some level of subsidy for health insurance expenses. For the most up-to-date
information on your available insurance options and associated costs, refer to the FCPS
Human Resources’ Benefit Services website.
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- Can I continue to participate in the FCPS Flexible Spending Account
and/or the Tax-Deferred Annuity programs after retirement?
No. Both the flexible spending account (FSA) and tax-deferred annuity (TDA) programs
allow deductions from earned income only. Under current law, your retirement benefits
are not considered “earned income,” and therefore, participation in these programs is
not permitted after you retire.
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- How can I arrange to meet with an ERFC retirement counselor?
You are encouraged to schedule an appointment with an ERFC counselor after you have
first requested and received a comprehensive estimate of your retirement benefits. This
is necessary so that you and your counselor are each prepared to discuss your concerns
with information specific to your particular circumstances. If you are within five years of
ERFC retirement eligibility, you may request up to three benefit estimates by
completing and submitting a Benefit Estimate Request Form (ERFC-7). You may
call to request a copy by mail at 703-426-3900 or 1-800-426-4208.
After you have received your benefit estimates, you may contact ERFC to schedule a
counseling appointment. If you wish, you may bring your spouse, significant other, or
even your financial consultant to the counseling appointment with you.
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- What happens to my ERFC contributions if I die before taking
retirement?
If you should die while in FCPS Eligible Employment, or while on approved leave from
FCPS Eligible Employment, but prior to attaining five years of Vesting Service, your
ERFC Accumulated Contributions will be refunded in full to your Named Beneficiary or
to your estate. If you are fully vested with ERFC, and you die while in FCPS Eligible
Employment, or during an approved leave of absence, ERFC will provide your eligible
Named Beneficiary either a monthly pension benefit, or a full refund of your
Accumulated Contributions. The only Named Beneficiaries who can be eligible to
receive a pension (rather than a refund of your Accumulated Contributions) are your
spouse, former spouse, a disabled dependent child, or another person 40 years of age or
older who received at least half of his or her support from you in the year immediately
preceding your death.
For all of these reasons, it is important that you keep your beneficiary designations up to
date with ERFC, and that you keep your potential beneficiaries informed of your various
benefits.
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- If I have designated my spouse as my beneficiary and we are later
divorced, is that beneficiary designation cancelled automatically?
No. Your beneficiary designation is not automatically cancelled by any changes such as a
divorce or marriage, and it will not change automatically even if a divorce decree says
that it does. You must make any such changes yourself by completing and submitting a
new Beneficiary Designation form (PDF) to ERFC. You may call to request a copy by mail.
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- Is there a limit to the benefit amount I can receive from ERFC?
There are a variety of legal limits that apply to the benefits that you may receive from the
ERFC plan.
- At retirement, your combined annual ERFC and VRS benefits, calculated
under the Basic Benefit provisions of the ERFC plan, cannot exceed 100% of
your Final Average Compensation (FAC). In computing this limit, the amount
of your VRS benefit is calculated based on the VRS benefit formulas, your age
at retirement from ERFC, and your Creditable Virginia Service.
- If you are receiving a VRS disability benefit, your combined annual ERFC and
VRS benefits cannot exceed 100% of your Final Average Compensation (FAC).
The limit is generally calculated using the straight annual amount payable by
VRS for the disability.
- Section 415(b) of the Internal Revenue Code requires certain limits in the
amount of benefits provided to plan members in all qualified employer
retirement plans. These limits apply to your combined benefits from ERFC and
VRS. Additional information about these limits may be obtained be contacting
the ERFC office, or by reviewing Article XVII (for ERFC members) or Article
VII (for ERFC-2001 members) of the Plan Document.
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- Are retirement benefits taxable?
All or part of your ERFC benefit is subject to state and federal income taxation from the
first month of retirement. At the time of your retirement, ERFC will provide you a
detailed statement itemizing your taxable versus non-taxable monthly ERFC benefit.
Any ERFC contributions you may have paid into the retirement system prior to July 1,
1985 have already been taxed, and are not subject to further taxation. A special
calculation, designed by the Internal Revenue Service, is used to determine which
portion of your benefit if any, is not taxable.
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- What deductions are withheld from my monthly ERFC retirement
benefits?
Currently, the standard deductions withheld from your ERFC benefit payments include:
- Federal income taxes
- State/Local income taxes (including the District of Columbia, Maryland,
North Carolina, South Carolina, Virginia and West Virginia)
- Health Insurance (optional)
- Dental Insurance (optional)
- Apple Federal Credit Union (optional)
If you opt to continue the available FCPS health and dental insurance coverage in
retirement, you may choose to have these costs deducted automatically from your
ERFC benefit payments, assuming your monthly annuity is large enough to cover the
withholding.
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- Will I receive cost-of-living (COLA) adjustments with my ERFC benefit?
Yes. ERFC applies an annual cost-of-living adjustment (COLA) to retirement benefits.
Under the current schedule, your first COLA will equal 1.49 percent of your monthly
ERFC retirement benefit (or roughly half of the full COLA approved for ERFC in a
given year), and will be implemented on March 31st in the first full calendar year
following your effective date of retirement. Thus, for example, if you should retire
during the first quarter of any given year, your initial ERFC COLA will not be applied
until March 31st of the following calendar year. Thereafter, your ERFC benefit will
increase by 3% annually on March 31st.
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- What are my ERFC benefit payment options?
ERFC offers up to five different benefit payment options to accommodate your personal
needs in retirement.
Under the basic benefit payment option, you will receive monthly retirement benefits
for life, but upon your death, no ongoing pension benefits are provided to your survivors
or your estate.
There are two survivor benefit payment options, which provide a reduced benefit during
your lifetime in order to provide an ongoing benefit to your spouse or certain other
beneficiaries after you die. Upon your death with a survivor benefit payment option,
either 100% (Option A), or 50% (Option B), of your reduced ERFC benefit continues
to be paid to your spouse or eligible beneficiary for the remainder of his or her life.
Option C provides you a lifetime benefit equal to 96% of what you would have received
under the basic benefit option, with payments guaranteed for a minimum 120
consecutive months (10 years). If you should die before receiving all 120 payments,
your designated beneficiary will receive the remaining balance of those payments.
Under benefit payment Option D (available only to members employed prior to July 1,
2001 and covered under the ERFC Plan structure), you may elect to receive a partial
lump sum payment, plus an ongoing reduced monthly retirement benefit. The lump sum
can be as small as $1,000, or as large as your total Accumulated Contributions, less
interest and Purchased Service Credit amounts. The reduced monthly benefit amount
offers no provision for payments to a surviving beneficiary or to an estate after your
death. It is important to note that your election to receive a direct lump sum payment
under Option D may affect the taxes you owe for the year in which the distribution is
made.
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- What happens to my ERFC retirement benefits when I die after taking
retirement?
Your monthly ERFC benefit payments will cease when you die, unless you have elected
one of the optional forms of payment that provides a benefit to your surviving spouse or
to an eligible beneficiary. (See Question #20)
If you die before receiving benefit payments equal to the sum of your Accumulated
Contributions, your surviving Named Beneficiary or your estate may apply for a refund
of the balance of your residual Accumulated Contributions. Residual Accumulated
Contributions is the difference between your Accumulated Contributions balance at the
time of retirement and the sum of the pension benefits paid on your account.
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