Withdrawing Retirement Account and Layoff

Employees sometimes consider withdrawing their Virginia Retirement System (VRS) contributions when they are placed on Leave Without Pay – Layoff status. Agencies should inform employees that withdrawal of these contributions is considered resignation. The individual who does so has severed all employment-related ties with the Commonwealth. All benefits, including Layoff and Severance benefits, are stopped, and all service credits for retirement are lost.
Therefore, agencies should require the employee to submit a written letter of resignation before they process the VRS Refund Request Form. Such a letter may help an employee realize the meaning of the step he is taking, and it could provide valuable documentation for the agency if problems arise later.
Agency HR Officers should ensure that their payroll and benefits staffs do not certify the VRS Refund Request Form unless authorized by Human Resources.