3. Employees shall share in the cost of their retirement benefits.

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1 A. Retirement Principles The Arlington School Board believes that setting out the principles of a Retirement Program (including both defined contribution and defined benefit systems) and then developing a retirement plan to meet those principles is the best way to approach retirement plan design. These are the principles we believe shall guide the provision of a Retirement Program for our employees. 1. Fair, equitable, and competitive benefits and conditions of retirement shall be provided for all employees, including part-time employees. 2. The retirement benefits shall come from a blend of a defined benefit system and a defined contribution system that provides a guaranteed benefit for long-service employees and portability and flexibility for all employees. The level of any employer matching contributions to the defined contribution system depends upon the level of benefits provided by the defined benefit system. 3. Employees shall share in the cost of their retirement benefits. 4. Full career employees retirement income, including Social Security, shall be sufficient to maintain pre-retirement living standards at the age when unreduced Social Security benefits begin. The standard for "full career" shall be 30 years of service. "Pre-retirement living standard shall be targeted by providing 55% of pre-retirement gross income excluding Social Security benefits assuming a life-only benefit form of payment. 5. Receipt of an unreduced annuity depends upon meeting the minimum conditions of the retirement program in which the employee is enrolled. 6. Periodic post-retirement supplements shall be provided automatically so that, within reasonable limits, the initial level of retirement income provided by Social Security and the defined benefit system will not be significantly diminished because of future increases in the cost of living. 7. The defined benefit system shall be supplemented by a disability plan. 8. The defined benefit retirement program s objectives extend to Arlington Public Schools employees regardless of their date of hire. 9. The retirement program shall be administered in a prudent manner and provide for full disclosure of operations, investments and system financial condition. 10. The defined benefit system shall be funded in accordance with generally accepted actuarial standards and generally accepted accounting standards. 11. The retirement program shall be reviewed on a regular basis with a comprehensive review every 7-10 years. Approved March 3, 2016 Effective March 3, 2016 Page 1 of 6

2 B. Social Security ARLINGTON PUBLIC SCHOOLS All employees of the Arlington Public Schools shall be covered under the Social Security system. C. Virginia Retirement System 1. The following groups of employees are covered under the Virginia Retirement System (VRS): a. All full-time A, E, G, P, T and X-scale employees; b. All full-time C, D and M-scale employees hired on or after July 1, 2001; and c. Full-time C, D and M-scale employees hired before July 1, 2001 who opted to be covered by VRS. For purposes of this policy, employees who work at least half-time (0.5 FTE) are considered full time employees. 2. In the interest of providing continuity for the instructional program, instructional staff (school-based administrators, teachers and assistants) are encouraged to set the effective dates for their retirement on July 1. D. Arlington County School Board Employees Supplemental Retirement System Employees covered by VRS who were employed in a covered position prior to February 8, 1981 are automatically members of the Arlington County School Board Employees Supplemental Retirement System. The school system pays the cost of this benefit. E. Arlington County Employees Supplemental Retirement System The following C, D and M-scale employees are covered by the Arlington County Employees Supplemental Retirement System: 1. Those hired prior to February 8, 1981; and 2. Those hired between February 8, 1981 and June 30, 2001 who did not choose coverage under VRS. F. Defined Contribution Plan The School Board shall contribute a percentage of pay each payday to the 401(a) defined contribution accounts of C, D and M-scale employees who were hired between February 8, 1981 and June 30, 2001 and who are covered under the Arlington County Employees Supplemental Retirement System (D above). This percentage of pay shall be set by the School Board. Approved March 3, 2016 Effective March 3, 2016 Page 2 of 6

3 G. Cash Match Plan The school system shall match employee contributions to their 403(b) tax sheltered annuity accounts up to the limit determined by the School Board. Cash match contributions shall be paid into the employees 401(a) defined contribution accounts. Beginning July 1, 2007, new employees will automatically be enrolled in the 403(b) tax sheltered annuity program at a level that allows them to receive the maximum cash match provided by the School Board unless they opt out of the program. Employees covered by the VRS Hybrid Plan will only be eligible for the School Board s match of their contributions to 403(b) tax sheltered annuity accounts if they are contributing the maximum amount (5%) to the defined contribution portion of the VRS Hybrid Plan. H. Tax Sheltered Annuities All employees who earn sick leave are eligible to participate in approved tax sheltered annuity and mutual fund plans under section 403(b) of the Internal Revenue Code. Employees may authorize payroll deductions for no more than two plans. I. Separation Pay Employees with satisfactory performance records who qualify and retire under the Virginia Retirement System or the Arlington County Employees Supplemental Retirement System after a minimum of five years with APS shall be paid one-half day s pay for each day of accumulated sick leave, based on their salary at the time of retirement, and a day s pay for each day of accumulated annual leave. Employees hired on or after July 1, 2011 who qualify and retire under the Virginia Retirement System after a minimum of five years of service with APS shall be paid one-quarter day s pay for each day of accumulated sick leave and up to 40 days of accumulated annual leave, based on their hourly rate of pay at the time of retirement. Part-time employees who are covered by neither retirement system shall be considered to have retired for purposes of this policy if they leave school system service after achieving the same age and service combinations that covered employees must meet in order to be eligible for an immediate annuity. Payouts that exceed $2, shall be deposited in deferred compensation accounts established in the retiree s name. J. Individual Early Retirement In order to advance the school system s objectives and priorities, the School Board has established the Individual Early Retirement Plan to secure the specialized services of P, E, T, X and G-scale employees who retire under the Virginia Retirement System (VRS) or who take a deferred retirement at age The Superintendent shall be responsible for: a. Appointing a committee to review proposals and to make recommendations on their disposition; Approved March 3, 2016 Effective March 3, 2016 Page 3 of 6

4 b. Establishing procedures for the submission and evaluation of proposals; c. Establishing procedures for the review of approved proposals; and d. Making determinations about whether projects and contracts will continue for an additional year. 2. Individual Early Retirement Plan proposals are subject to approval by the School Board. The School Board may approve proposals as exceptions to the limits expressed in this policy or the PIP when it determines that it is in the best interest of the school system to do so. 3. Employees are responsible for submitting Individual Early Retirement Plan proposals by March 1 for retirements that must be effective on July 1. Proposals must: a. State how the work to be performed contributes to the school system s objectives and priorities; b. Include a rationale with a statement of needs, objective and an evaluative component; and c. Include a task outline and a cost analysis. 4. Limits a. Generally, the number of days that may be worked in a year shall be limited to 40. In unusual circumstances or for particularly promising proposals, the days may be extended beyond 40 in a year. b. Retirees must have severed their employment with the school system for at least 30 days. For 10-month employees, the summer break does not meet this requirement. c. New Individual Early Retirement Plans shall be made for a period not to exceed five years. An evaluation and review of the project shall take place at the end of each year. Annually, a determination shall be made by the Superintendent or designee about whether the project and the contract will continue for an additional year. d. New Individual Early Retirement Plans in any year shall not exceed two percent of the number of employees in the applicable employee group. 5. Compensation Tasks performed shall be compensated at a rate commensurate with the work to be performed. In no case shall the rate of pay exceed the rate based on the retiree s grade and step (including longevities) at the time of retirement. The rate will be adjusted by general salary adjustments made in the year in which the tasks are performed. Approved March 3, 2016 Effective March 3, 2016 Page 4 of 6

5 6. Contracts After approval by the School Board, a contract shall be prepared covering the services to be rendered by the retiree and the compensation to be paid for the services rendered. Contracts shall not be cancelled unless the cancellation benefits the School Board or the school system and is mutually acceptable to both parties. K. Reemployment of Retirees Any employee who retires from one of the school system s retirement plans (the Virginia Retirement System VRS or the Arlington County Employees Supplemental Retirement System) may not be reemployed by the school system until the employee has severed employment for at least thirty days. The thirty-day separation requirement shall not apply to: Retirees who are eligible for and elect to participate in the Defined Retirement Option Plan (DROP) of the Arlington County Employees Supplemental Retirement System, Retirees who suspend their retirement benefits, Retirees who substitute teach on an occasional basis, Disability retirees returning after recovery from disability, or Retirees selected to fill full-time positions in critical shortage areas (a one-year separation is required). When an employee retires under any of the school system s retirement plans, unless he or she has been approved for the Individualized Early Retirement Plan (section J above), no promise of future employment shall be made to that retiree nor shall any position be held vacant for such retiree in anticipation of reemployment. A position vacated by a retiree shall be filled as specified in School Board policy 35-3, Employment. Except for disability retirees returning after recovery from disability within the timeframe specified in School Board Policy 35-5, section F, if a retiree wants to return to school system employment, that retiree shall follow the same application and competition procedures that apply to all other applicants and shall not receive preferential treatment because of his or her retired status. Disability retirees returning within the timeframe specified in School Board policy 35-5, section F shall be treated in the same manner as employees returning from Family and Medical Leave. L. Responsibilities 1. The Superintendent or designee shall be responsible for: a. Making information about the various retirement plans and options available to employees each year; b. Issuing procedures pertaining to the reemployment of retirees; c. Surveying the school division to identify critical shortages of teachers and administrative personnel and reporting such critical shortages to the School Board, the Superintendent of Public Instruction and the Virginia Retirement System; and Approved March 3, 2016 Effective March 3, 2016 Page 5 of 6

6 d. Developing procedures for the selection and conduct of tax sheltered annuity vendors. 2. Employees who intend to retire are encouraged to indicate their plans in writing to the School Board as soon as their plans become firm and the decision to retire is made. References Code of Virginia, Section , and Code of Virginia, Title 51.1 Arlington County Code, Chapters 21, 35 and 46 Internal Revenue Code of 1986, as amended Approved March 3, 2016 Effective March 3, 2016 Page 6 of 6