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The Line of Duty Act (LODA) provides benefits to state employees, local government employees and volunteers who hold specified hazardous duty positions (§9.1-400 et seq. of the Code of Virginia). By statute, LODA benefits must be provided. The Virginia Department of Accounts administers the benefit for entities that participate in the Line of Duty Act Fund (LODA Fund), which is administered by the Virginia Retirement System (VRS), and provides a funding mechanism for payment of LODA benefits. Localities that have opted out of the LODA Fund must administer their own LODA benefits. The LODA Fund was originally established by the 2010 Appropriation Act with VRS as the investment manager. VRS is also responsible for obtaining an annual actuarial review and the VRS Board of Trustees sets the LODA Fund premiums each biennium on a pay-as-you-go basis. State agencies and localities participate automatically in the LODA Fund. Localities were given the option to opt out of the LODA Fund by July 1, 2012 and provide their own source for funding the benefit. Opt out localities must still provide the benefits required by the Code.
In 2012, the General Assembly passed legislation (Chapter 90 of the 2012 Acts of Assembly) that allows the State Comptroller to advance LODA death benefits to pay funeral expenses when a death is likely to be covered under the program. If a subsequent investigation determines that the death is not covered, VRS can deduct the previously paid expenses from any other benefits owed to the beneficiaries.
The 2012 Appropriation Act, Chapter 3 of the 2012 Special Session 1 Acts of Assembly, removed language that required localities that opt out of the program to use the State Comptroller to process their benefit payments. Employers that do not participate in the LODA Fund are now responsible for paying benefits to eligible employees and volunteers. The State Comptroller continues to determine benefit eligibility and will collect an administrative fee for determining benefit eligibility. See Item 268 (3) (e) of HB1500 (2013 Appropriation Act) for current provision.
Eligibility
Hazardous duty state and local government employees, including volunteers, are eligible for the Line of Duty Act benefits. See an eligibility listing.
Virginia Retirement System's Role vs. Department of Accounts' Role
The Department of Accounts determines eligibility for LODA benefits and administers the benefits for entities that have not opted out of the LODA Fund. Opting out of the LODA Fund does not mean that a locality does not have to provide the statutory LODA benefits. If the Department of Accounts, in conjunction with the State Police, determines that an individual or survivors are eligible for LODA benefits, then they must be provided, even if the locality has opted out of participation in the LODA Fund. VRS is designated as the investment manager of the LODA Fund, which provides a funding mechanism for future benefit payments. VRS also provides for an annual actuarial valuation and the Board of Trustees sets LODA premiums each biennium on a pay-as-you-go basis.
Contribution Rates
At its December 9, 2011 meeting, the VRS Board of Trustees approved the Line of Duty Act Fund contribution rate of $474.14 for fiscal year 2013 and $521.97 for fiscal year 2014. This is a per capita rate, meaning this is the amount the locality pays per covered full-time participant.
Program Overview Contribution Rates
| FY 2013 | FY 2014 | |
|---|---|---|
| Expected Benefit Payments | $354.10 | $400.66 |
| Loan Repayment | $102.80 | $102.80 |
| Administrative Expenses | $14.10 | $15.07 |
| Margin (Estimated cost of health benefits awaiting processing) |
$3.14 | $3.44 |
| Total Pay-As-You-Go Cost | $474.14 | $521.97 |
Please note:
- The current rate is based on a pooled approach.
- Hazardous duty volunteers are billed at 25 percent of the per capita rate ($130.49); part-time National Guard participants are billed at 10 percent of the per capita rate.
- The VRS actuary will conduct an annual valuation of the LODA Fund. The annual valuation will examine plan experience and the number of individuals covered. To obtain the number of individuals covered in the plan, VRS will send out an annual LODA Fund Coverage List to participating localities containing the names of paid and volunteer hazardous duty participants. Localities will review, confirm and return the list to VRS each year.
- Due to the variance in the number of covered individuals, actual plan experience, and the payoff of the loan to cover initial startup costs, rates will fluctuate over time.
