Retirement & Savings Plans

Virginia Retirement System (VRS)


Effective July 1, 2012, as required by the Virginia General Assembly, eligible employees contribute 5% of their salary to their member accounts.  VRS members are vested after five years of VRS service credit.  Service retirement is a defined benefit based on a member's average final compensation, years of service, and age at retirement.

Plan 1:  Members with service credit prior to July 1, 2010 are eligible to retire with unreduced benefits at age 65, with at least five years of service, or at age 50 with at least 30 years of service.  An employee's highest consecutive 36 months of creditable compensation is used as the average final compensation.

Plan 2:  Members hired or rehired on or after July 1, 2010, with no service credit prior to July 1, 2010, are eligible to retire with an unreduced benefit at their normal social security retirement age with at least five years of service credit, or when age and years of service credit equal 90.  An employee's highest consecutive 60 months of creditable compensation is used as the average final compensation.

Hybrid Plan:  This plan applies to most members hired on or after January 1, 2014, with no prior VRS service credit.  This plan also applies to eligible VRS Plan 1 and VRS Plan 2 members who elected to opt into the plan during the election window held January 1 - April 30, 2014, for an effective date of July 1, 2014.  Public Safety employees covered by enhanced hazardous duty benefits are not eligible for the Hybrid Plan.  This plan offers a defined benefit component and defined contribution component (similar to a 401K). Hybrid members receive short and long term disability benefits following 12 consecutive months of employment.

Life Insurance - Minnesota Life


All full-time employees are provided term, group life insurance and accidental death and dismemberment insurance through the VRS, administered by Minnesota Life. The insurance has no cash value. The amount of the basic life insurance benefit for death due to natural causes is two times the employee's annual salary.  For accidental death, the life insurance is double the natural death benefit, or four times the annual base salary. Currently, the Town pays all premiums for this coverage.

VRS members are also eligible to purchase optional term, group life insurance for natural and accidental death for the member, the member's spouse, and the member's dependent children.  VRS members may purchase the optional life insurance for up to four times the annual salary. The monthly premium is based on the amount of insurance purchased and the age of the member. The member is responsible for paying the monthly premium for the optional life insurance through payroll deduction.

Tax Deferred Compensation Plan (IRC 457)


All Front Royal employees are eligible to participate in a tax-deferred compensation program (IRC Section 457). An employee may choose between 3 plan providers:

  • ICMA Retirement Corporation
  • VALIC
  • Mass Mutual
Each plan allows the employee to defer a portion of salary which will not be subject to current federal or state income taxes. The deferred salary amount is invested with the above listed firms under contract with the Town and is not normally available for withdrawal until retirement or termination. The employee may incur a penalty and/or interest expense for early withdrawal.

United States Savings Bonds


United States Savings Bonds are available for purchase through payroll deduction. In order to take advantage of that provision the employee must set up an account through the Treasury Direct website and forward the account number to payroll, funds will be direct deposited into the employee's account.