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 contributions. Contributions may be withdrawn at any time without taxes or penalties. Earnings may be withdrawn tax and penalty-free if you have owned a Roth IRA for at least a five-year period and have a qualifying event, including age 59 1/2, a "first-time" home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:
- Considering a Roth IRA
- Matching a Roth IRA Plan with 457 Plan
- Your Payroll 457 and Roth IRA
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, go to the Social Security website.
Information about the City of Lynchburg's retirement benefits can also be found in the Employee Policies and Procedures Manual (PDF).