The Vermont Statutes Online

Title 16: Education

Chapter 055: STATE TEACHERS' RETIREMENT SYSTEM OF VERMONT

• § 1931. Definitions

  As used in this chapter:

  (1) “Accumulated contributions” shall mean the sum of all the amounts deducted from the compensation of a member and credited to his or her individual account in the Pension Fund, together with regular interest thereon, as provided in subsection 1944(b) of this title.

  (2) “Actuarial equivalent” shall mean a benefit of equal value under the actuarial assumptions last adopted by the Retirement Board under subsection 1943a(h) of this title.

  (3) “Annuity” shall mean annual payments for life derived from the accumulated contributions of a member.

  (4) “Average final compensation” shall mean:

  (A) The average annual earnable compensation of a member during the three consecutive fiscal years beginning July 1 and ending June 30 of creditable service affording the highest average, or during all of the years of creditable service if fewer than three years. If the member’s highest three years of earnable compensation are the three years prior to separation of service and the member separates prior to the end of a fiscal year, the average final compensation shall be determined by adding:

  (i) the actual earnable compensation earned in the fiscal year of separation through the date of separation and the corresponding service credit;

  (ii) the earnable compensation and service credit earned in the preceding two fiscal years; and

  (iii) the remaining service credit that is needed to complete the three full years, which shall be factored from the fiscal year preceding the two fiscal years described in subdivision (ii) of this subdivision (A). The earnable compensation associated with this remaining service credit shall be calculated by multiplying the annual earnable compensation reported by the remaining service credit that is needed.

  (B) A member who works less than full-time shall have his or her reported earnable compensation annualized for purposes of determining average final compensation.

  (C) An increase in compensation in excess of 10 percent in any of the years used to calculate average final compensation shall be excluded. For purposes of calculating average final compensation for any member, payments made in lieu of benefits shall not be considered part of a member’s average final compensation. For purposes of determining average final compensation for group C members, unused annual or sick leave, termination bonuses, and any other compensation for service not actually performed shall also be excluded.

  (5) “Beneficiary” shall mean any person in receipt of a pension, an annuity, a retirement allowance or other benefit as provided by the System.

  (6) “Board” shall mean the board of trustees of the System provided for in section 1942 of this title to administer the System.

  (7) “Creditable service” shall mean membership service, any other service allowable under this chapter, and service transferred under 3 V.S.A. § 495.

  (8) “Earnable compensation” shall mean the full rate of compensation for the performance of professional services paid to a teacher when the teacher works the full normal working time for his or her position, in whatever manner paid, plus all additional wages received by a teacher for duties performed that provide direct educational value to the students. Long-term disability benefits, as long as the teacher remains in an employment relationship with the school district, shall be included.

  (9) “Medical Board” shall mean the board of physicians provided for in subsection 1942(k) of this title.

  (10) “Member” shall mean any person included in the System pursuant to section 1933 of this chapter.

  (A) “Group A member”: any person who is first included in the membership of the System prior to July 1, 1981.

  (B) “Group C member”: any person who is first included in the membership of the System on or after July 1, 1990, any person who was a Group B member on June 30, 1990 who was in service on that date, and any person who was a Group B member on June 30, 1990 who was absent from service on that date who returns to service on or after July 1, 1990.

  (11) “Membership service” shall mean service as a member for which credit is allowable as provided in subsection 1936(a) of this title.

  (12) “Pension” shall mean annual payments for life derived from money provided by the State.

  (13) [Repealed.]

  (14) “Regular interest” shall mean interest at such rate as may be established from time to time by the Board as provided in subsection 1943(b) of this title.

  (15) “Retirement” shall mean withdrawal from active service with a retirement allowance granted under the provisions of this chapter.

  (16) “Retirement allowance” or “maximum allowance” shall mean the sum of the annuity and the pension. All retirement allowances shall be payable in monthly installments; provided, however, that if the retirement allowance is less than $20.00 per month, it may be paid, at the discretion of the Board of Trustees, in quarterly or semi-annual installments or in a lump sum of equivalent actuarial value.

  (17) “Service” shall mean all service as a teacher for which compensation is received.

  (18) “State” shall mean the State of Vermont.

  (19) “System” or “Retirement System” shall mean the State Teachers’ Retirement System of Vermont, as defined in section 1932 of this title.

  (20) “Teacher” means any licensed teacher, principal, supervisor, superintendent, or any professional licensed by the Vermont Standards Board for Professional Educators who is regularly employed, or otherwise contracted if following retirement, for the full normal working time for the teacher’s position in a public day school or school district within the State, or in any school or teacher-training institution located within the State, controlled by the State Board of Education, and supported wholly by the State; or in certain public independent schools designated for such purposes by the Board in accordance with section 1935 of this title; or who is regularly employed by a board of cooperative education services created in accordance with chapter 10 of this title. In all cases of doubt, the Board shall determine whether any person is a teacher as defined in this chapter. It does not mean a person who is teaching with an emergency license.

  (21) “Pension Fund” or “Vermont Teachers’ Retirement Fund” shall mean the Fund created by section 1944 of this title.

  (22) “Benefits Fund” or “Retired Teachers’ Health and Medical Benefits Fund” shall mean the Fund created pursuant to section 1944b of this title. (Amended 1981, No. 41, § 23; 1989, No. 78, § 2; 1989, No. 169 (Adj. Sess.), §§ 1, 2; 1991, No. 24, § 11; 1991, No. 64, § 6, eff. June 18, 1991; 1991, No. 247 (Adj. Sess.), § 7; 1995, No. 36, §§ 3, 4; 2003, No. 122 (Adj. Sess.), § 297d; 2005, No. 214 (Adj. Sess.), § 3; 2007, No. 13, § 22; 2007, No. 137 (Adj. Sess.), § 4; 2009, No. 24, § 5; 2009, No. 74 (Adj. Sess.), § 2; 2013, No. 22, § 10; 2017, No. 165 (Adj. Sess.), § 7; 2023, No. 168 (Adj. Sess.), § 7, eff. July 1, 2024.)

• § 1932. Date of establishment; power and privileges; name

  A retirement system is hereby established and placed under the management of the Board of Trustees of the System for the purpose of providing retirement allowances and other benefits under the provisions of this chapter for teachers of the State of Vermont. The System shall begin operation and be established as of July 1, 1947. It shall have the power and privileges of a corporation and shall be known as the “State Teachers’ Retirement System of Vermont,” and by such name all of its business shall be transacted, all of its assets invested, and all of its cash and securities and other property held in trust for the purpose for which received. (Amended 2007, No. 13, § 23.)

• § 1933. Members generally

  (a) Membership in the System shall be a condition of employment for all teachers. A person shall not join the System as a Group A member. A person shall not join the system as a Group B member after June 30, 1990. A service shall not be included in the creditable service of any member unless the member was a member at the time the service was performed or is entitled to credit under section 1936 or 1944 of this title or was transferred under 3 V.S.A. § 495.

  (b), (c) [Repealed.]

  (d) Should any Group A or Group C member who has less than five years of creditable service in any period of seven consecutive years after last becoming a member be absent from service more than six years, or should a member withdraw the member’s accumulated contributions or die or retire under the provisions of this chapter, the member shall thereupon cease to be a member. However, the membership of any teacher granted leave of absence by the member’s school board for the purpose of professional study or for the acceptance of an exchange position shall be continued during such leave of absence subject to Board rules, if the member does not withdraw the member’s contributions, if any, and such member shall be considered in the service of the State for the purposes of the System during such leave of absence. In the case of leaves of absence granted by a member’s school board for purposes other than for professional study or for an exchange position, service credit shall be granted upon a contribution by the member or the member’s school board. Such contribution shall be made at the member’s current rate multiplied by the member’s earnable compensation for the year preceding the leave of absence.

  (e) [Repealed.] (Amended 1961, No. 163; 1961, No. 223, eff. July 18, 1961; 1963, No. 110, § 5, eff. May 28, 1963; 1965, No. 84, § 1; 1969, No. 62; 1969, No. 215 (Adj. Sess.), § 1; 1971, No. 201 (Adj. Sess.), § 2; 1973, No. 141 (Adj. Sess.), § 1; 1977, No. 53, § 3, eff. April 23, 1977; 1981, No. 41, § 24; 1981, No. 189 (Adj. Sess.), § 1, eff. April 22, 1982; 1989, No. 169 (Adj. Sess.), § 3; 1991, No. 64, § 7; 2013, No. 22, § 11; 2017, No. 165 (Adj. Sess.), § 8; 2019, No. 131 (Adj. Sess.), § 82.)

• § 1934. Repealed. 2017, No. 165 (Adj. Sess.), § 29.

• § 1935. Teachers in certain public or independent schools

  (a) The Board of Trustees may designate certain public or independent schools, which are located within the State, and supported wholly or in part by the State but which are not under the control of the State Board of Education, as employers of teachers within the meaning of this chapter.

  (b) At any time within 75 days following the date of such designation, any person employed on the date of designation in a teaching capacity by such institution and who is not then a member of the System may become a member of the System by filing with the Board of Trustees, on a form prescribed by the Board, an application to be covered in the membership of the System.

  (c)-(f) [Repealed.] (Amended 1963, No. 69; 1991, No. 24, § 11; 2007, No. 13, § 25; 2017, No. 165 (Adj. Sess.), § 9.)

• § 1936. Creditable service; military service

  (a) Each member shall receive membership service credit for all service rendered while a member of the System since he or she became a member, or since he or she last became a member in the event of a break in his or her membership.

  (b) [Repealed.]

  (c) Creditable service shall consist of membership service credit, any other service allowable under this chapter, and service transferred under 3 V.S.A. § 495.

  (d) Credit shall also be granted for any period of absence from service due to any class of military service of the United States approved by the Retirement Board, provided the member returns to service as a teacher as defined under section 1931 of this title within 90 days after having become discharged or separated from military service, as if such service had been service as a teacher. The earnable compensation of the teacher at the time of entering such military service shall be deemed to be the earnable compensation for the period of such service.

  (e) Credit shall also be granted for any period of absence from service in connection with an approved workers’ compensation claim as a result of a work-related injury, provided the employee provides evidence of the period covered by the approved workers’ compensation claim upon return to active service. The earnable compensation of the employee at the time of entering the absence from service resulting from an approved workers’ compensation claim or the wages plus all other wage replacement compensation received while on the approved period of absence, whichever provides for the highest total compensation, shall be deemed to be the earnable compensation for the period of service. The total compensation under this subsection shall not exceed what the earnable compensation would have been had the member not been injured. (Amended 1977, No. 53, §§ 1, 5, eff. April 23, 1977; 2001, No. 29, § 4; 2007, No. 13, § 26; 2017, No. 165 (Adj. Sess.), § 10.)

• § 1937. Service retirement

  (a) Upon written application to the Board not later than 90 days, or longer for good cause shown, after the date upon which the retirement allowance is to begin:

  (1) any Group A member may retire on a service retirement allowance on the first day of the calendar month next following the member’s separation from service, provided that the member shall have attained age 60, and following completion of five years of creditable service for those members hired on or after July 1, 2004, or have completed 30 years of creditable service at the date of the member’s retirement;

  (2) any Group C member, having attained the age of 57 or completed 25 years of creditable service as of June 30, 2010, may retire on a service retirement allowance on the first day of the calendar month next following the member’s separation from service, provided that such member shall have attained age 62, and following completion of five years of creditable service for those members who are hired on or after July 1, 2004, or have completed 30 years of creditable service at the date of the member’s retirement; and

  (3) any Group C member not having attained the age of 57 or completed 25 years of creditable service as of June 30, 2010, may retire on a service retirement allowance on the first day of the calendar month next following the member’s separation from service, provided that the member shall have completed five years of creditable service and either has attained the age of 65 or has at least 90 years of combined age and years of creditable service at the date of the member’s retirement.

  (b)(1) Upon service retirement, a Group A member shall receive a service retirement allowance that shall consist of:

  (A) an annuity, which shall be the actuarial equivalent of the member’s accumulated contributions at the time of retirement except as subdivisions 1937(b)(4) and 1944(b)(2) of this title increase the annuity; and

  (B) a pension, which shall be equal to one-120th of the member’s average final compensation multiplied by the number of years of the member’s membership service.

  (2) Beginning on July 1, 1989, the service retirement allowance shall be not less than the larger of $4,550.00 a year or 50 percent of the member’s average final compensation for any member or beneficiary who has completed 30 years or more of creditable service, nor less than a proportionate amount thereof for any member or beneficiary who has completed less than 30 years of creditable service. Beginning on March 1, 1998, the service retirement allowance shall be not less than the larger of $6,600.00 a year or 50 percent of the member’s average final compensation for any member or beneficiary who has completed 30 years or more of creditable service, nor less than a proportionate amount thereof for any member or beneficiary who has completed at least five years, but less than 30 years, of creditable service. For this purpose, any annuity derived from the member’s contributions transferred from the existing system under subsection 1934(c) of this title and from additional contributions made under subdivisions 1944(b)(5) and (6) of this title shall not be included as part of the retirement allowance. Beginning on September 1, 2006, the service retirement allowance shall be not less than the larger of $9,000.00 per year or 50 percent of the member’s average final compensation for any member or beneficiary who has completed 30 years or more of creditable service nor less than a proportionate amount thereof for any member or beneficiary who has completed at least five years but less than 30 years of creditable service. Beginning on September 1, 2011, and on September 1 of every fifth year thereafter, the minimum service retirement allowance shall be increased by $1,000.00.

  (3), (4) [Repealed.]

  (c) Upon service retirement, a Group C member shall receive a service retirement allowance as follows:

  (1) for a member having attained the age of 57 or completed 25 years of creditable service as of June 30, 2010, the sum of:

  (A) 1-1/4 percent of the member’s average final compensation multiplied by years of creditable service prior to July 1, 1990;

  (B) 1-2/3 percent of the member’s average final compensation multiplied by years of creditable service on and after July 1, 1990 through June 30, 2010, to a maximum of 50 percent of average final compensation; and

  (C) 1-2/3 percent of the member’s average final compensation multiplied by years of creditable service, 2 of which shall be membership service, on or after July 1, 2010, to a maximum of 53.34 percent of average final compensation;

  (2) for a member having neither attained the age of 57 nor completed 25 years of creditable service as of July 1, 2010, the sum of:

  (A) 1-1/4 percent of the member’s average final compensation multiplied by years of creditable service prior to July 1, 1990;

  (B) 1-2/3 percent of the member’s average final compensation multiplied by the member’s years of creditable service between July 1, 1990 and June 30, 2010; and

  (C) 1-2/3 percent of the member’s average final compensation times the member’s creditable service on or after July 1, 2010 until attainment of 20 years of creditable service, and two percent of the member’s average final compensation multiplied by the member’s years of creditable service in excess of 20 years, to a maximum of 60 percent of average final compensation.

  (d) Upon written application to the Board, any Group A member who has not attained age 60 but who has attained age 55 may retire on an early retirement allowance on the first day of the calendar month next following the filing of the application or the member’s separation from service, whichever date is later, provided that the applicant has notified the superintendent of schools in writing 30 calendar days prior to the effective date of the application.

  (e) Upon early retirement a Group A member shall receive an early retirement allowance, which shall be the actuarial equivalent of:

  (1) a normal retirement allowance payable at normal retirement date, based on the member’s average final compensation at early retirement and the number of years of creditable service the member would have completed had the member remained in service to the member’s normal retirement date; multiplied by

  (2) the ratio that the number of the member’s years of creditable service at early retirement bear to the number of years of such service the member would have completed had the member remained in service to the member’s normal retirement date.

  (f) Upon written application to the Board:

  (1) any Group C member who has attained the age of 57 or completed at least 25 years of creditable service as of June 30, 2010, has not attained the age of 62 but has attained the age of 55 and completed between five and 30 years of creditable service may retire on an early retirement allowance on the first day of the calendar month next following the filing of the application or the member’s separation from service, whichever date is later;

  (2) any Group C member who has not attained the age of 57 or completed at least 25 years of creditable service as of June 30, 2010, and neither has attained the age of 65 nor has at least 90 years of combined age and years of creditable service, but who has attained age 55 and completed five years of creditable service, may retire on an early retirement allowance on the first day of the calendar month next following the filing of the application or the member’s separation from service, whichever date is later.

  (g) Upon early retirement, a Group C member:

  (1) who has attained the age of 57 or completed at least 25 years of creditable service as of June 30, 2010 shall receive an early retirement allowance equal to the service retirement allowance reduced by one-half of one percent for each month the member is under age 62 at the time of early retirement;

  (2) who has not attained the age of 57 or completed at least 25 years of creditable service as of June 30, 2010, and neither has attained the age of 65 nor has at least 90 years of combined age and years of creditable service, shall receive an early retirement allowance, which shall be the actuarial equivalent of the normal retirement allowance computed under subsection (c) of this section, based on the average final compensation and years of creditable service at the date of early retirement.

  (h) Any member who retires prior to age 62 may, at any time prior to the date the first payment on account of the member’s retirement allowance normally becomes due, elect to convert the retirement allowance otherwise payable to the member after retirement into a reduced retirement allowance that is its actuarial equivalent and is of such amount that, with the member’s primary insurance amount under Title II of the Social Security Act, the member will receive, so far as possible, the same amount each year before and after such primary insurance amount commences.

  (i) When a member has a minimum of 25 years of creditable service, he or she may elect to purchase up to five years of additional service credit. A member who has attained the age of 57 and completed at least 25 years of creditable service as of June 30, 2010 and makes an election under this subsection shall deposit in the Pension Fund by a single contribution an amount computed at regular interest to be sufficient to provide at normal retirement an annuity equal to one and two-thirds percent of the member’s average final compensation multiplied by the number of years purchased. A member who has not attained the age of 57 or completed at least 25 years of creditable service as of June 30, 2010 and makes an election under this subsection shall deposit in the Pension Fund by a single contribution an amount computed at regular interest to be sufficient to provide at normal retirement an annuity equal to one and two-thirds percent of the member’s average final compensation for each year up to 20 years of service and two percent of the member’s average final compensation for each year thereafter. If through a negotiated agreement or binding contract, a school district or supervisory union is required to purchase the whole or part of the additional years of service credit necessary to enable the member to take normal retirement, the school district or supervisory union may deposit a single contribution into the Pension Fund or make the contribution in four equal annual payments on dates established by the State Treasurer. If a school district or supervisory union elects to make the contribution in four equal annual payments, it shall, in addition, pay interest at the actuarially assumed interest rate at the time of each annual payment. Any payment not received within 30 days after the date it is due shall be considered delinquent and the delinquent payment and interest may be recovered by action in a court of competent jurisdiction against the school district or supervisory union liable therefor or may be deducted by the State Treasurer from any other monies payable to such school district or supervisory union by the State or any department or agency thereof. (Amended 1959, No. 72, §§ 1, 2, eff. April 1, 1959; 1961, No. 85, § 1; 1963, No. 182, § 1; 1967, No. 172, § 1; 1969, No. 72; 1971, No. 201 (Adj. Sess.), §§ 1, 3; 1973, No. 5; 1973, No. 141 (Adj. Sess.), § 2; 1977, No. 38; 1981, No. 41, § 25; 1989, No. 78, § 5; 1989, No. 169 (Adj. Sess.), § 4; 1993, No. 33, § 2; 1997, No. 68 (Adj. Sess.), § 1, eff. March 1, 1998; 1999, No. 158 (Adj. Sess.), §§ 3, 8; 2003, No. 122 (Adj. Sess.), § 297e; 2005, No. 163 (Adj. Sess.), § 6; 2007, No. 13, § 27; 2009, No. 74 (Adj. Sess.), § 3; 2009, No. 139 (Adj. Sess.), § 5; 2017, No. 165 (Adj. Sess.), § 11.)

• § 1938. Disability retirement

  (a) Upon notice not later than 90 days subsequent to the date the member may have separated from service, any member who has had five or more years of creditable service and has served as a teacher in the State during the five years immediately preceding the date of such separation from service, may be retired by the Board of Trustees on a disability retirement allowance on the first day of the calendar month next following receipt of application, provided such application is filed not less than 30 nor more than one 180 days subsequent to the filing of such notice, or on the first day of the calendar month next following the member’s separation from service provided such application is filed prior to such separation, and further provided that the Medical Board, after a medical examination of such member, shall certify that the member is mentally or physically incapacitated for ordinary service; and, if previously separated from service, that such incapacity has existed since the time of the member’s separation from such service; and that such incapacity is likely to be permanent.

  (b) Anything to the contrary notwithstanding, should the Board of Trustees of the State Teachers’ Retirement System determine, within its sole discretion, that a member of said System had failed for good cause to file the notice or application required by subsection (a) of this section, within the time limits prescribed, said Board may permit the filing of such notice or application at any time prior to termination of membership and may thereupon act upon such notice or application as if it had been filed within the time limits prescribed by the subsection.

  (c) Upon disability retirement a member shall receive a service retirement equal to the normal retirement benefit accrued to the effective date of the disability retirement, provided, however, that such allowance shall not be less than 25 percent of his or her average final compensation at the time of his or her disability.

  (d) Once each year during the first five years following the retirement of a member on a disability retirement allowance, and once in every three-year period thereafter, the Board of Trustees may, and upon his or her application shall, require any disability beneficiary who has not reached his or her normal retirement date to undergo a medical examination by a Medical Board or by a physician or physicians designated by the Medical Board, such examination to be made at the place of residence of such beneficiary or other place mutually agreed upon. Should any disability beneficiary who has not reached his or her normal retirement date refuse to submit to such medical examination, his or her allowance may be discontinued until his or her withdrawal of such refusal, and should his or her refusal continue for one year, all his or her rights in and to his or her pension may be revoked by the Board of Trustees.

  (e) Should the Medical Board report and certify to the Board of Trustees that any disability beneficiary has a residual functional capacity that might enable the beneficiary to return to work, and should the Board of Trustees reasonably conclude that the beneficiary is engaged in or is, as a result of specific findings made by a certified vocational counselor, able to engage in a gainful occupation paying more than the difference between the beneficiary’s retirement allowance and his or her average final compensation at retirement, the beneficiary’s pension may be reduced to an amount that, together with his or her annuity and the amount earnable by him or her, shall equal the beneficiary’s average final compensation at retirement, adjusted for inflation each year following retirement, provided that:

  (1) The Board of Trustees shall provide written notice and an opportunity to be heard to the beneficiary prior to any reduction of the beneficiary’s pension under this subsection.

  (2) If the beneficiary has engaged in a gainful occupation subsequent to receiving disability retirement, the Board of Trustees in its discretion may reject in whole or in part a vocational assessment of the beneficiary’s ability to engage in a more gainful occupation and may rely in whole or in part on evidence of the beneficiary’s actual earnings in determining the amount earnable by the beneficiary. In addition, if the Board of Trustees’ determination is based in whole or in part on a vocational assessment of the ability to engage in a gainful occupation, the beneficiary shall be given a reasonable opportunity, not to exceed two years, to seek gainful occupation prior to any change in his or her retirement allowance. Not later than 60 days before the change in retirement allowance is to occur, at the conclusion of the period of a reasonable opportunity to seek gainful occupation, the beneficiary may petition the Board of Trustees for an extension of that period. An extension will be granted only where the beneficiary can demonstrate reasonable diligence in seeking gainful employment and that a substantial hardship will result from a change in the retirement allowance. The Board of Trustees shall render a decision at least five days before the change in retirement allowance is set to occur. In the event that the beneficiary is subsequently restored to service as a teacher as set forth in subsection 1939(a) of this chapter, the beneficiary’s retirement allowance shall cease, effective on the date when reemployment commences.

  (f) Every recipient of disability benefits who has not reached his or her normal retirement date shall, annually on a date determined by the Board of Trustees, file with the State Treasurer a statement certifying, under penalty of perjury and in such form as the Board of Trustees shall prescribe, the full amount of his or her earnings from earned income during the preceding calendar year. The State Treasurer may request, and the beneficiary shall provide within 60 days after such request, additional financial information and records pertinent to the beneficiary’s earned income. The beneficiary’s statement and accompanying forms and schedules and any other financial information and records provided by the beneficiary to the State Treasurer shall be confidential. In the event that a beneficiary fails to submit the certification or any required or requested financial information or records pertinent to the beneficiary’s earned income, the beneficiary’s retirement allowance shall be suspended until all such information and records have been submitted, and in the event that the failure continues for one year, the suspension shall include all the beneficiary’s rights in and to his or her pension. Notwithstanding any provision of this section to the contrary, if the beneficiary’s earned income for the preceding year exceeded the difference between the beneficiary’s retirement allowance and his or her average final compensation at retirement, adjusted for inflation each year following retirement, the beneficiary shall refund the portion of the preceding year’s retirement allowance that is equal to the amount of the reduction specified in subsection (e) of this section, and the refund amount may be offset against the beneficiary’s monthly pension benefits. Prior to suspension or revocation of the beneficiary’s retirement allowance, reemployment rights, or inception of any offset under this subsection, the Board of Trustees shall provide the beneficiary with written notice and an opportunity to be heard.

  (g) If a disability beneficiary engages in gainful occupation paying more than the difference between his or her retirement allowance and his or her average final compensation at retirement, the Board of Trustees may, under uniform standards of economic need, reduce and from time to time adjust his or her pension to an amount that, together with his or her annuity and the amount earnable by him or her, equals his or her average final compensation at retirement. For the purposes of this subsection, “retirement allowance” means the allowance payable without optional modification as provided in section 1941 of this title, and does not include any part of the annuity not provided by the regular contributions of the member at the rate provided under subdivision 1944(b)(2) of this title. (Amended 1959, No. 72, § 3, eff. April 1, 1959; 1961, No. 85, § 2; 1963, No. 110, § 1, eff. May 28, 1963; 1963, No. 182, § 2; 1967, No. 172, § 2; 1973, No. 141 (Adj. Sess.), § 3; 1981, No. 41, § 26; 1993, No. 33, § 3; 1999, No. 158 (Adj. Sess.), § 9; 2017, No. 165 (Adj. Sess.), § 12.)

• § 1938a. Benefit denial; evidentiary hearing

  (a) An applicant for disability retirement benefits under section 1938 of this title may file a request for an evidentiary hearing with the Board of Trustees if the application for benefits is denied.

  (b) The hearing shall be conducted by a hearing officer designated by the Board and in conformance with rules adopted by the Board. Rules adopted by the Board shall be consistent with 3 V.S.A. § 809.

  (c) The decision of the hearing officer shall constitute final administrative action. (Added 2003, No. 38, § 6.)

• § 1939. Restoration to service

  (a) In any fiscal year in which a beneficiary resumes service, as that term is defined in section 1931 of this title, he or she shall again become a member of the System, shall contribute at the rate established for members of his or her group and shall not be entitled to receive a retirement allowance, if he or she is:

  (1) compensated in excess of the allowable number of days per school year as established by the Board for substitute teaching; or

  (2) receives compensation in excess of 60 percent of the average compensation in the teacher System.

  (b) If a person once again becomes a member under subsection (a) of this section, membership shall be retroactive to the beginning of the fiscal year in which the person resumed service and the member shall not be entitled to any retirement allowance received during that fiscal year. If the person received a retirement allowance during the fiscal year in which he or she resumed service, upon subsequent retirement the Board shall suspend his or her retirement allowance for a period necessary to reimburse the System for the total retirement allowance received during the period in which the beneficiary resumed service and became a member.

  (c) Upon subsequent retirement of a person who once again becomes a member under subsection (a) of this section, the beneficiary’s former retirement allowance shall be restored, but the beneficiary shall not be entitled to cost of living adjustments for the period during which he or she was restored to service. In addition to the former retirement allowance, a beneficiary shall be entitled to a retirement allowance separately computed for the period beginning with his or her last restoration to service for which the member has made a contribution. (Amended 1963, No. 110, § 2, eff. May 28, 1963; 1973, No. 141 (Adj. Sess.), § 4; 1981, No. 41 § 27; 1995, No. 36, § 5; 1999, No. 158 (Adj. Sess.), § 10.)

• § 1940. Termination of service; death; refund; pension

  (a)(1) Upon the withdrawal of a member from service prior to retirement, the amount of the member’s accumulated contributions, less not more than one-third of the regular interest credited thereon as determined by the Board, will be returnable to the member. In lieu of the return of contributions:

  (A) a member who has attained the age of 57 and completed at least five years of creditable service or completed 25 years of creditable service as of June 30, 2010, may allow his or her contributions to remain in the System and receive a retirement allowance, commencing as early as age 55;

  (B) a member who has not attained the age of 57 or completed 25 years of creditable service as of June 30, 2010 but who has five or more years of creditable service may allow his or her contributions to remain in the System and receive a retirement allowance commencing as early as age 55 or when the combination of the member’s age and years of creditable service totals 90, whichever comes first.

  (2) In either instance set forth in subdivisions (1)(A) and (B) of this subsection, the retirement allowance shall consist of the annuity provided by his or her accumulated contributions with interest to the date on which the allowance commences, and a pension equal to a service retirement pension computed on the basis of the member’s compensation and creditable service to his or her date of withdrawal from service.

  (b)(1) Upon the death of a Group A or Group C member before retirement the member’s accumulated contributions will be payable to such primary beneficiary, primary and secondary beneficiaries, or joint beneficiaries, if any, as the member has nominated by written designation duly acknowledged and filed with the Board. In the absence of a written designation of beneficiary or in the event the designated beneficiary is deceased, the return of accumulated contributions with interest payable as a result of the death of the member prior to retirement shall be payable as follows:

  (A) In the case of an open estate, to the administrator or executor.

  (B) In the case of a closed estate and the deceased member’s account is valued at less than $1,000.00, in accordance with the Probate Division of the Superior Court decree of distribution.

  (C) In the absence of an open estate or Probate Division of the Superior Court decree of distribution, and where the deceased member’s account is valued at less than $1,000.00 to the surviving spouse of the deceased owner, or, if there is no surviving spouse, then to the next of kin according to 14 V.S.A. § 314.

  (D) In all other cases a probate estate shall be opened by the claimant, or other interested party, in order to determine the appropriate distribution of the proceeds of the deceased member’s account. When an estate is opened solely to distribute the proceeds of a deceased member’s account under this section, the Probate Division of the Superior Court may waive any filing fees.

  (2) In addition, if any member was in service at the date of the member’s death or on leave of absence granted subject to Board rules and had completed one or more years of creditable service, or if the member’s death was the result of an accident while in service or on leave of absence under Board rules, a pension equal to ten percent of the member’s average final compensation, but not less than $50.00 per month, will be payable on account of each of the member’s dependent children under 18 years of age, or, if a dependent student, under 23 years of age, not exceeding a total of three. However, if a surviving child of any age was mentally or physically incapacitated for substantial gainful employment before attaining 18 years of age, the pension will be payable for the duration of the child’s incapacity.

  (3) The survivors of a member who dies after December 31, 2006, while performing qualified military service shall be entitled to any additional benefits, other than benefit accruals related to the period of qualified military service, that would have been provided under the Plan had the member resumed employment and then terminated employment on account of death. (Amended 1959, No. 226, § 1; 1963, No. 110, § 3, eff. May 28, 1963; 1966, No. 45 (Sp. Sess.), eff. July 1, 1965; 1967, No. 316 (Adj. Sess.), § 1, eff. March 22, 1968; 1973, No. 141 (Adj. Sess.), § 5; 1981, No. 41, §§ 28, 39(2); 1989, No. 169 (Adj. Sess.), § 5; 1999, No. 158 (Adj. Sess.), § 11; 2007, No. 13, § 28; 2009, No. 74 (Adj. Sess.), § 4; 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011; 2013, No. 22, § 12; 2015, No. 18, § 6; 2015, No. 23, § 37; 2017, No. 165 (Adj. Sess.), § 13; 2019, No. 131 (Adj. Sess.), § 83.)

• § 1941. Optional benefits

  (a)(1) On or before the 15th day of the calendar month in which the first payment on account of a retirement allowance becomes normally due, but not later than the date on which the payment becomes normally due, each member shall elect to receive the member’s retirement allowance in accordance with one of the following forms of payment:

  (A) Option 1. A retirement allowance payable during the member’s life computed pursuant to section 1937 or 1938 of this title, whichever is applicable.

  (B) Option 2. A reduced retirement allowance payable during the member’s life, with the provision that at the member’s death a lump sum equal in amount to the difference between his or her accumulated contributions at the time of his or her retirement and the sum of the annuity payments actually made to him or her during his or her lifetime shall be paid to the person, if any, as he or she has nominated by written designation duly acknowledged and filed with the Board; or in the absence of a written designation of beneficiary, or in the event the designated beneficiary is deceased, the residual amount payable as a result of the death of the member after retirement shall be payable as follows:

  (i) In the case of an open estate, to the administrator or executor.

  (ii) In the case of a closed estate and the deceased member’s account is valued at less than $1,000.00, in accordance with the Probate Division of the Superior Court decree of distribution.

  (iii) In the absence of an open estate or Probate Division of the Superior Court decree of distribution, and when the deceased member’s account is valued at less than $1,000.00 to the surviving spouse of the deceased owner, or, if there is no surviving spouse, then to the next of kin according to 14 V.S.A. § 314.

  (iv) In all other cases, a probate estate shall be opened by the claimant, or other interested party, in order to determine the appropriate distribution of the proceeds of the deceased member’s account. When an estate is opened solely to distribute the proceeds of a deceased member’s account under this section, the Probate Division of the Superior Court may waive any filing fees.

  (C) Option 3. A reduced retirement allowance payable during the member’s life, with the provision that it shall continue after his or her death at one-half the rate paid to him or her and be paid for the life of the beneficiary nominated by him or her by written designation duly acknowledged and filed with the Board at the time of retirement, should the beneficiary survive him or her.

  (D) Option 4. A reduced retirement allowance payable during the member’s life, with the provision that it shall continue after his or her death at three-fourths of the rate paid to him or her and be paid for the life of the beneficiary nominated by him or her by written designation duly acknowledged and filed with the Board at the time of retirement, should the beneficiary survive him or her.

  (E) Option 5. A reduced retirement allowance payable during the member’s life, with the provision that it shall continue after his or her death for the life of the beneficiary nominated by him or her by written designation duly acknowledged and filed with the Board at the time of retirement, should the beneficiary survive him or her.

  (2) The benefits payable under options 2, 3, 4, and 5 shall be determined as actuarial equivalents of the retirement allowance under option 1. Any member who elects to receive a retirement allowance under the provisions of options 3, 4, or 5 may elect to receive a benefit further reduced actuarially as prescribed by the Board with the added provision that on the basis of stipulations contained in a plan-approved domestic relations order or if the retired member survives his or her nominated beneficiary, the retirement allowance that would have been payable under option 1 shall be paid to the retired member during the remainder of his or her lifetime. If a member does not make an election as to the form of his or her retirement allowance, the member shall receive his or her retirement allowance under the provisions of option 1.

  (b)(1) A retirement allowance shall be payable to the eligible surviving beneficiary, if any, following the death of a:

  (A) Group A member who had attained age 60 or had completed 30 years of creditable service; or had not attained age 60 and had completed 10 years (but less than 30 years) of creditable service and was in service at the time of the member’s death.

  (B) Group C member who had attained age 55 and completed five years of creditable service; or had not attained age 55 and completed 10 years of creditable service and was in service at the time of the member’s death.

  (2) In order to be eligible to receive the retirement allowance, the surviving beneficiary must be nominated by the member by written designation duly acknowledged and filed with the Board, and if the beneficiary is other than the spouse of the member, the beneficiary must be dependent upon the member at the time of the member’s death, provided that no person entitled to a pension under subsection 1940(b) of this title may be eligible for a retirement allowance under this section. The Board shall from time to time adopt uniform rules for determining whether a designated beneficiary was dependent upon a member; if, in the judgment of the Board, a surviving beneficiary in receipt of a retirement allowance would have ceased to be dependent upon the member had the member survived, the Board may discontinue the retirement allowance payable to such surviving beneficiary. The retirement allowance payable to the surviving beneficiary shall be equal to the benefit that would have been payable had the member elected option 5 and retired on the member’s date of death, computed in the case of a member who has not attained normal retirement age on the basis of a disability retirement allowance or an early retirement allowance, as provided in subsection 1937(c) of this title; without regard to whether the member has completed the eligibility requirements for early retirement, whichever provides the greater benefit to the surviving beneficiary. Such retirement allowance to the surviving beneficiary shall be in lieu of the payment of the member’s accumulated contributions provided under subsection 1940(b) of this title; provided, however, that the surviving beneficiary may elect to receive payment of the member’s accumulated contributions in lieu of such retirement allowance or may elect to convert the retirement allowance otherwise payable to the member into an actuarial equivalent under the provisions of option 2 of this section. Failing an eligible surviving beneficiary, the member’s accumulated contributions shall be payable in accordance with the provisions of subsection 1940(b) of this title.

  (c) [Repealed.] (Amended 1959, No. 182, § 1; 1967, No. 269 (Adj. Sess.), § 1, eff. July 1, 1967; 1973, No. 141 (Adj. Sess.), § 6; 1975, No. 175 (Adj. Sess.), § 1; 1981, No. 41, § 29; 1989, No. 169 (Adj. Sess.), § 6; 1999, No. 53, § 6; 2001, No. 29, § 5; 2007, No. 13, § 29; 2007, No. 137 (Adj. Sess.), § 5; 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011; 2015, No. 23, § 38; 2017, No. 165 (Adj. Sess.), § 14.)

• § 1942. Board of Trustees; Medical Board; actuary; rate of contribution; safekeeping of securities

  (a) The general administration and the responsibility for the proper operation of the System and for making effective the provisions of this chapter are hereby vested in the Board of Trustees of the System, which shall be organized immediately after three of the trustees provided for in this section have qualified.

  (b) The Board shall consist of six trustees, as follows:

  (1) the Secretary of Education, ex-officio;

  (2) the State Treasurer, ex-officio;

  (3) the Commissioner of Financial Regulation, ex-officio;

  (4) two trustees and one alternate, who shall be members of the System and who shall be elected by the members of the System for a term of four years according to such rules as the Board shall adopt to govern the election; and

  (5) one trustee and one alternate, who shall be elected by the Board of Directors, Association of Retired Teachers of Vermont, who shall be a retired member of the System receiving retirement benefits, for a term of four years.

  (c) If a vacancy occurs in the office of a trustee, except for the trustee elected by the Board of Directors, Association of Retired Teachers of Vermont, the vacancy shall be filled by the Board, which shall appoint a member of the System to serve until the next regular election is held. A vacancy in the office of the trustee appointed by the Board of Directors, Association of Retired Teachers of Vermont, shall be filled by that Board, which shall appoint a retired member of the System receiving retirement benefits to serve until the next regular election is held.

  (d) The trustees as such shall serve without compensation, but they shall be reimbursed from the funds of the System for all necessary expenses that they may incur through service on the Board.

  (e) Each trustee shall be entitled to one vote on the Board. Four concurring votes shall be necessary for a decision by the trustees at any meeting of the Board, and four trustees shall constitute a quorum of the Board. Any ex officio trustee may designate in writing a person within the trustee’s department, agency, or office to attend a meeting or meetings of the Board of Trustees in the trustee’s place. The designation shall be filed with the Secretary of the Board. A person so designated and an alternate attending on behalf of an elected or appointed trustee under this section shall have the same voting rights and responsibilities as the absent trustee at such meeting or meetings, except that the designee or alternate shall not automatically assume the trustee’s place as an officer of the Board.

  (f) Subject to the limitations of this chapter, the Board shall, from time to time, establish rules for the administration of the System and for the transaction of its business.

  (g) The Board shall elect from its membership a chair and a vice chair, and shall appoint a secretary who shall be the executive officer of the Board and who may or may not be a member of the Board. The Board may employ such actuarial, medical, and other services as shall be required.

  (h) The Board shall keep in convenient form such data as shall be necessary for actuarial valuation of the System and for checking the experience of the System.

  (i) The Board shall keep a record of all of its proceedings, which shall be open to public inspection. It shall publish annually a report showing the fiscal transactions of the System for the preceding year, the amount of the accumulated cash and securities of the System, and the last balance sheet indicating the financial condition of the System as shown by an actuarial valuation of the assets and liabilities of the System.

  (j) The Attorney General of the State shall be the legal advisor to the Board.

  (k) The Board shall designate a Medical Board of three physicians who are not eligible to participate in the System. The Medical Board shall arrange for and pass upon all medical examinations required under the provisions of this chapter, shall investigate all essential statements and certificates by or on behalf of a member in connection with application for disability retirement, and shall report in writing to the Board its conclusions and recommendations upon all the matters referred to it. If required, other physicians may be employed to report on special cases.

  (l) The Board shall designate an actuary who shall be the technical adviser of the Board on matters regarding the operation of the System and who shall perform such other duties as are required in connection therewith.

  (m) Immediately after the establishment of the System, the actuary shall make such investigation of the mortality, service, and compensation experience of the members of the System, as the actuary shall recommend and the Board shall authorize, for the purpose of determining the proper mortality and service tables to be prepared and submitted to the Board for adoption. Having regard to such investigation and recommendation, the Board shall adopt for the System such mortality and service tables as shall be deemed necessary and shall certify the rates of contribution payable under the provisions of this chapter. Beginning July 1, 2023, at least once every three fiscal years following the establishment of the System, the actuary shall make an actuarial investigation into the mortality, service, and compensation experience of the members and beneficiaries of the System, and taking into account the results of such investigation, the Board shall adopt for the System such mortality, service, and other tables as shall be deemed necessary and shall certify the rates of contribution payable under the provisions of this chapter.

  (n) On the basis of such mortality and service tables as the Board shall adopt, the actuary shall make annual valuations of the assets and liabilities of the funds of the System.

  (o) The Vermont Pension Investment Commission shall designate from time to time a depository for the securities and evidences of indebtedness held in the Pension Fund and may contract for the safekeeping of securities and evidences of indebtedness within and outside the State of Vermont in such banks, trust companies, and safe-deposit facilities as it shall from time to time determine, and the necessary and incidental expenses of such safekeeping and for service rendered, including advisory services in investment matters, shall be paid from the Pension Fund. Any agreement for the safekeeping of securities or evidences of indebtedness, except securities loaned pursuant to a securities lending agreement as authorized by subsection (q) of this section, shall provide for the access to such securities and evidences of indebtedness at any time by the custodian or any authorized agent of the State for audit or other purposes.

  (p) The Board shall enter into insurance arrangements to provide health and medical benefits for retired members and their dependents. The State is legally responsible for the costs of the health and medical benefits provided in this chapter in the amounts specified in section 1944e of this chapter. The Board may enter into insurance arrangements to provide dental coverage for retired members and their dependents, provided the State or the System has no legal obligation to pay any portion of the dental benefit premiums.

  (q) The Vermont Pension Investment Commission may authorize the loan of its securities pursuant to securities lending agreements that provide for collateral consisting of cash or securities issued or guaranteed by the United States government or its agencies equal to 100 percent or more of the market value of the loaned securities. Cash collateral may be invested by the lending institution in investments approved by the State Treasurer. Approval of investments shall be made in accordance with the standard of care.

  (r) The Board shall review annually the amount of State contribution recommended by the actuary of the Retirement System as necessary to achieve and preserve the financial integrity of the fund established pursuant to section 1944 of this title. Based on this review, the Board shall determine the amount of State contribution necessary for the next fiscal year to achieve and preserve the financial integrity of the funds. On or before November 1 of each year, the Board shall inform the Governor and the House and Senate Committees on Government Operations and on Appropriations in writing about the amount needed. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection. (Amended 1971, No. 155 (Adj. Sess.), eff. March 9, 1972; 1975, No. 175 (Adj. Sess.), § 2; 1987, No. 92, § 4, eff. June 23, 1987; 1989, No. 225 (Adj. Sess.), § 25(b); 1991, No. 151 (Adj. Sess.), §§ 3, 4; 1991, No. 265 (Adj. Sess.), § 2; 1995, No. 36, § 6; 1995, No. 180 (Adj. Sess.), § 38(a); 1999, No. 158 (Adj. Sess.), § 24; 2005, No. 48, § 2; 2005, No. 50, § 6; 2007, No. 13, § 30; 2007, No. 137 (Adj. Sess.), § 6; 2009, No. 74 (Adj. Sess.), § 5; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2013, No. 92 (Adj. Sess.), § 172, eff. Feb. 14, 2014; 2013, No. 142 (Adj. Sess.), § 28; 2017, No. 165 (Adj. Sess.), § 15; 2018, No. 11 (Sp. Sess.), § E.515.1; 2019, No. 131 (Adj. Sess.), § 84; 2021, No. 75, § 6, eff. June 8, 2021; 2021, No. 114 (Adj. Sess.), § 18, eff. July 1, 2022.)

• § 1943. Investments; interest rate; disbursements

  (a) The members of the Vermont Pension Investment Commission established in 3 V.S.A. chapter 17 shall be the trustees of the Pension Fund created by this chapter, and with respect to them may invest and reinvest the assets of the Pension Fund, and hold, purchase, sell, assign, transfer, and dispose of the securities and investments in which the assets of the Pension Fund have been invested and reinvested. Investments shall be made in accordance with the standard of care established by the prudent investor rule under 14A V.S.A. chapter 9.

  (b) The Board from time to time shall set rates of regular interest at such percentages compounded annually as it determines to be equitable both to members and to taxpayers of the State, but not less than three percent nor more than five percent.

  (c) The State Treasurer shall be the custodian of the assets of the Pension Fund of the System. All payment from the Pension Fund shall be made by the Treasurer or by a deputy treasurer, only upon vouchers signed by two persons designated by the Board. A duly attested copy of a resolution of the Board designating such persons and bearing on its face specimen signatures of such persons shall be filed with the State Treasurer as authority for making payments upon such vouchers. No vouchers shall be drawn unless it has previously been authorized by resolution of the Board.

  (d) Except as otherwise provided in this section, no trustee and no employee of the Board or member of the Vermont Pension Investment Commission shall have any direct interest in the gains or profits of any investment made by the Commission; nor shall any trustee or employee of the Board or Commission, directly or indirectly, for himself or herself or as an agent, in any manner use the same except to make such current and necessary payments as are authorized by the Board or Commission; nor shall any trustee or employee of the Board or Commission become an endorser or surety, or in any manner an obligor, for the monies loaned to or borrowed from the Board. The State Treasurer, with the approval of the Board and the Commission, shall adopt by rule standards of conduct for trustees and employees of the Board in order to maintain and promote public confidence in the integrity of the Board. Such rules shall prohibit trustees and employees from receiving or soliciting any gift, including meals, alcoholic beverages, travel fare, room and board, or any other thing of value, tangible or intangible, from any vendor or potential vendor of investment services, management services, brokerage services, and other services to the Board. (Amended 1963, No. 110, § 4, eff. May 28, 1963; 1967, No. 13; 1967, No. 29, § 1, eff. March 14, 1967; 1981, No. 41, § 30; 1985, No. 171 (Adj. Sess.), § 4, eff. May 7, 1986; 1987, No. 80, § 9, eff. June 9, 1987; 1997, No. 67 (Adj. Sess.), § 3; 2005, No. 50, § 7; 2007, No. 13, § 31; 2015, No. 23, § 39; 2017, No. 165 (Adj. Sess.), § 16; 2019, No. 131 (Adj. Sess.), § 85; 2021, No. 75, § 7, eff. June 8, 2021.)

• § 1943a. Compliance with federal law

  (a) Intent. The General Assembly intends that the Retirement System and any trusts or custodial accounts established to hold the assets of the Retirement System in accordance with subsection (b) of this section be maintained, in form and operation, so as to maintain the status of the Retirement System as a qualified plan under 26 U.S.C. § 401(a) as amended, and the tax exempt status of such trusts and custodial accounts under 26 U.S.C. § 501(a), to the extent that those requirements apply to a governmental plan as described in 26 U.S.C. § 414. Notwithstanding any other provision of this chapter to the contrary, this section shall be applicable, administered, and interpreted in a manner consistent with maintaining the tax qualification of the Retirement System as a qualified plan and the tax exempt status of such trusts and custodial accounts under 26 U.S.C. §§ 401(a) and 501(a), respectively.

  (b) Exclusive benefit. All assets of the Retirement System shall be held in trust, in one or more custodial accounts treated as trusts in accordance with 26 U.S.C. § 401(f), or in a combination thereof. Under any trust or custodial account, it shall be impossible at any time prior to the satisfaction of all liabilities with respect to members and their beneficiaries for any part of the corpus or income to be used for, or diverted to, purposes other than the exclusive benefit of members and their beneficiaries. However, this requirement shall not prohibit:

  (1) the return of a contribution within six months after the Retirement System determines that the contribution was made by a mistake of fact; or

  (2) payment of the expenses of the Retirement System.

  (c) Vesting on plan termination. In the event of the termination of the Retirement System, the accrued benefits of eligible members shall become fully and immediately vested.

  (d) Forfeitures. Service credits forfeited by a member for any reason shall not be applied to increase the benefits of any other member.

  (e) Required distributions. Distributions shall begin to be made not later than the member’s required beginning date as defined under 26 U.S.C. § 401(a)(9) and shall be made in accordance with all other requirements of that subsection. Benefits shall be paid under the maximum allowance pursuant to this subsection even though the member has not previously applied to receive them. The System shall be deemed to be in compliance with the terms of 26 U.S.C. § 401(a)(9) so long as it is administered under a reasonable good faith interpretation of that subsection.

  (f) Limitation on benefits. Benefits shall not be payable to the extent that they exceed the limitations imposed by 26 U.S.C. § 415, as adjusted for increases in the cost of living.

  (g) Limitation on compensation. Benefits and contributions shall not be computed with reference to any compensation that exceeds the maximum dollar amount permitted by 26 U.S.C. § 401(a)(17) as adjusted for increases in the cost of living.

  (h) Actuarial determination. Whenever the amount of any member’s benefit is to be determined on the basis of actuarial assumptions done by a professional actuary, those assumptions shall be specified by resolution, which documentation shall be incorporated in the System by reference. The Board shall also adopt interest and mortality assumptions for the purposes of determining actuarial equivalent benefits under the System. The Board shall adopt assumptions by resolution, which documentation shall be incorporated in the System by reference.

  (i) Direct rollovers. An individual withdrawing a distribution from the Retirement System that constitutes an “eligible rollover distribution” within the meaning of 26 U.S.C. § 402, may elect, in the time and manner prescribed by the Retirement Board and after receipt of proper notice, to have any portion of the distribution paid directly to another plan that is qualified under 26 U.S.C. § 401(a), to an annuity plan described in 26 U.S.C. § 403(a), to an annuity contract described in 26 U.S.C. § 403(b), or to an eligible plan described in 26 U.S.C. § 457(b) that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and that agrees to account separately for amounts transferred into such plan, or to an individual retirement account or annuity described in 26 U.S.C. § 408(a) or (b), in a direct rollover. For distributions made after December 31, 2009, in accordance with 26 U.S.C. § 402(c)(11), a nonspouse beneficiary who is a designated beneficiary under 26 U.S.C. § 401(a)(9) may establish an individual retirement account into which all or a portion of a death distribution from the Retirement System to which such nonspouse beneficiary is entitled can be transferred directly.

  (j) Compliance with the Uniformed Services Employment and Reemployment Rights Act (USERRA). Notwithstanding any provision of law to the contrary, contributions, benefits, and service credits with respect to qualified military service will be provided under the System in accordance with 26 U.S.C. § 414(u), unless State law provides more favorable benefits than those required by federal law.

  (k) Nonvested members; consent. An individual who is not a vested member of the System and who has not yet reached the later of normal retirement age or age 62 must consent to any withdrawal of his or her assets of greater than $1,000.00. For individuals who are not vested members of the System and who have reached the later of normal retirement age or 62 years of age, amounts greater than $1,000.00 may be paid out without the individual’s consent. In all cases, amounts of $1,000.00 or less may be paid out without the individual’s consent.

  (l) Rulemaking. The Board may adopt rules to ensure that this chapter complies with federal law requirements. (Added 2007, No. 13, § 32; amended 2009, No. 24, § 6; 2015, No. 18, § 5; 2017, No. 165 (Adj. Sess.), § 17; 2019, No. 131 (Adj. Sess.), § 86.)

• § 1944. Vermont Teachers’ Retirement Fund

  (a) Pension Fund. All of the assets of the System shall be credited to the Vermont Teachers’ Retirement Fund.

  (b) Member contributions.

  (1) Contributions deducted from the compensation of members shall be accumulated in the Pension Fund and separately recorded for each member.

  (2) The proper authority or officer responsible for making up each employer payroll shall cause to be deducted from the compensation:

  (A) Of each Group A member, five and one-half percent of the member’s total earnable compensation, including compensation paid for absence as provided by subsection 1933(d) of this title.

  (B) Of each Group C member, the following shall apply:

  (i) Beginning on July 1, 2022, a Group C member shall have the rate set forth in this subdivision (b)(2)(B)(i) applied to the member’s total earnable compensation for the fiscal year, which shall include compensation paid for absence as provided by subsection 1933(d) of this title, and any additional stipends identified as of July 1. A member’s rate shall not be adjusted during the fiscal year. For a member who works a part-time equivalency status, the rate shall apply to the member’s total earnable compensation and not to an amount equal to an annualized base salary. If a member is employed on a part-time equivalency status with two or more employers, the highest rate shall be applied to the amounts deducted from each employer. A member’s rate shall be calculated according to the following rates and income brackets:

  (I) If a member’s base salary is at or below $40,000.00, the rate is 6.0 percent.

  (II) If a member’s base salary is $40,000.01 or more but not more than $50,000.00, the rate is 6.05 percent.

  (III) If a member’s base salary is $50,000.01 or more but not more than $60,000.00, the rate is 6.10 percent.

  (IV) If a member’s base salary is $60,000.01 or more but not more than $70,000.00, the rate is 6.20 percent.

  (V) If a member’s base salary is $70,000.01 or more but not more than $80,000.00, the rate is 6.25 percent.

  (VI) If a member’s base salary is $80,000.01 or more but not more than $90,000.00, the rate is 6.35 percent.

  (VII) If a member’s base salary is $90,000.01 or more but not more than $100,000.00, the rate is 6.50 percent.

  (VIII) If a member’s base salary is $100,000.01 or more, the rate is 6.65 percent.

  (ii) Beginning on July 1, 2023, a Group C member shall have the rate set forth in this subdivision (b)(2)(B)(ii) applied to the member’s total earnable compensation for the fiscal year, which shall include compensation paid for absence as provided by subsection 1933(d) of this title, and any additional stipends identified as of July 1. A member’s rate shall not be adjusted during the fiscal year unless the member’s full-time equivalency status changes, which shall require that the member’s rate be recalculated and the new rate applied for the remainder of that fiscal year. For a member who works a part-time equivalency status, the rate shall apply to the member’s total earnable compensation and not to an amount equal to an annualized base salary. If a member is employed on a part-time equivalency status with two or more employers, the highest rate shall be applied to the amounts deducted from each employer. A member’s rate shall be calculated according to the following rates and income brackets:

  (I) If a member’s base salary is at or below $40,000.00, the rate is 6.10 percent.

  (II) If a member’s base salary is $40,000.01 or more but not more than $50,000.00, the rate is 6.15 percent.

  (III) If a member’s base salary is $50,000.01 or more but not more than $60,000.00, the rate is 6.25 percent.

  (IV) If a member’s base salary is $60,000.01 or more but not more than $70,000.00, the rate is 6.35 percent.

  (V) If a member’s base salary is $70,000.01 or more but not more than $80,000.00, the rate is 6.50 percent.

  (VI) If a member’s base salary is $80,000.01 or more but not more than $90,000.00, the rate is 6.75 percent.

  (VII) If a member’s base salary is $90,000.01 or more but not more than $100,000.00, the rate is 7.0 percent.

  (VIII) If a member’s base salary is $100,000.01 or more, the rate is 7.25 percent.

  (iii) Beginning on July 1, 2024, a Group C member shall have the rate set forth in this subdivision (b)(2)(B)(iii) applied to the member’s total earnable compensation for the fiscal year, which shall include compensation paid for absence as provided by subsection 1933(d) of this title, and any additional stipends identified as of July 1. A member’s rate shall not be adjusted during the fiscal year unless the member’s full-time equivalency status changes, which shall require that the member’s rate be recalculated and the new rate applied for the remainder of that fiscal year. For a member who works a part-time equivalency status, the rate shall apply to the member’s total earnable compensation and not to an amount equal to an annualized base salary. If a member is employed on a part-time equivalency status with two or more employers, the highest rate shall be applied to the amounts deducted from each employer. A member’s rate shall be calculated according to the following rates and income brackets:

  (I) if a member’s base salary is at or below $40,000.00, the rate is 6.15 percent;

  (II) if a member’s base salary is $40,000.01 or more but not more than $50,000.00, the rate is 6.20 percent;

  (III) if a member’s base salary is $50,000.01 or more but not more than $60,000.00, the rate is 6.30 percent;

  (IV) if a member’s base salary is $60,000.01 or more but not more than $70,000.00, the rate is 6.40 percent;

  (V) if a member’s base salary is $70,000.01 or more but not more than $80,000.00, the rate is 6.55 percent.

  (VI) If a member’s base salary is $80,000.01 or more but not more than $90,000.00, the rate is 6.80 percent.

  (VII) If a member’s base salary is $90,000.01 or more but not more than $100,000.00, the rate is 7.10 percent.

  (VIII) If a member’s base salary is $100,000.01 or more, the rate is 7.35 percent.

  (C) In determining the amount earnable by a member set forth in this subdivision (2) in a payroll period, the Board may consider the rate of compensation payable to such member on the first day of a payroll period as continuing throughout the payroll period, and it may omit deduction from compensation for any period less than a full payroll period if a teacher was not a member on the first day of the payroll period, and to facilitate the making of deductions it may modify the deduction required of any member by such an amount as shall not exceed one-tenth of one percent of the annual earnable compensation upon the basis of which such deduction is made. The actuary shall make annual valuations of the reduction to the recommended State contribution attributable to the increase from five to six percent, and the Board shall include the amount of this reduction in its written report pursuant to subsection 1942(r) of this title.

  (3) The deductions provided for in this section shall be made notwithstanding that the minimum compensation provided for by law for any member shall be reduced thereby. Every Group A and Group C member shall be deemed to consent and agree to the deductions made and provided for in this section, and shall receipt for the member’s full salary or compensation, and payment of salary or compensation less such deduction shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the services rendered by such person during the period covered by such payment, except as to the benefits provided under this chapter.

  (4) The proper authority or officer responsible for making up each employer payroll shall certify to the Board the amounts deducted on each and every payroll, and each of such amounts shall be paid into the Pension Fund and credited to the individual account of the member from whose compensation the deduction was made.

  (A) All employer reports and corresponding member contributions required by this subdivision (4) shall be provided by the due date established by the Board. Employers providing reports or remitting contributions, which are more than 30 days delinquent, may be assessed a delinquent reporting fee of one percent of the amount that should have been reported and remitted for each month, or prorated portion of a month, that the report or contributions are delinquent.

  (B) All employers shall provide accurate reports. Employers providing inaccurate reports shall be responsible for correcting any deficiencies and shall reimburse the System for any costs incurred by the System as a result of inaccuracy.

  (C) In the event that an employer willfully files an inaccurate report, in addition to any other penalties provided by law, the employer shall pay the System an administrative penalty of up to 50 percent of the amount that was not accurately reported.

  (D) The System may enforce the provisions of this subdivision (4) in Washington Superior Court.

  (E) The Board may, in its discretion, waive part or all of a penalty assessment for good cause shown.

  (5) [Repealed.]

  (6) Any Group A member who has rendered service outside the State in the capacity of a teacher and as approved by the Board, or who was a teacher in Vermont on July 1, 1947 and elected not to join the System but who has subsequently joined, may:

  (A) Elect to have included in the member’s creditable service all or part of any period of service outside the State. Any Group A member who so elects shall deposit in the Pension Fund by a single contribution an amount computed at regular interest to be sufficient to provide at age 60 an annuity equal to one-120th of the member’s average final compensation multiplied by the number of years of service rendered outside the State for which the member elects to receive credit. No application may be accepted for the purchase of credit for service outside the State, however, if at the time of application the member has a vested right to retirement benefits in another retirement system based upon that service.

  (B) Elect to have included in the member’s creditable service all or part of any service with which the member was credited immediately prior to any refund of the member’s accumulated contributions, including prior service, as defined in section 1931 of this title, which shall be restored upon full restoration of previous membership service as provided in this section. Any Group A member who so elects shall deposit in the Pension Fund by a single contribution an amount equal to the amount of accumulated contributions previously withdrawn together with regular interest thereon from the date of the refund to the date of repayment, or a proportionate part of that amount if less than the full period of previous service is to be included in the member’s creditable service. If a member has received a refund of the member’s accumulated contributions more than once, the member may elect the period or periods of previous service on account of which the member will make contributions under this subdivision (b)(6) subject to this limitation. Any Group A member who elects to repay any amount previously refunded shall continue thereafter to contribute to the System the proportion of earnable compensation determined on the basis of the member’s age on the date on which the member shall have last become a member.

  (C) Elect to have included in the member’s creditable service those years of teaching in Vermont rendered between July 1, 1947 and July 1, 1972 for which no contributions to the System have been made. Any Group A member who so elects shall deposit in the Pension Fund by a single contribution an amount computed at regular interest to be sufficient to provide at age 60 an annuity equal to one-120th of the member’s average final compensation multiplied by the number of years of service for which the member elects to receive credit.

  (7) The contributions of a member, and such interest as may be allowed thereon, paid upon the member’s death or withdrawn by the member as provided in this chapter, shall be paid from the Pension Fund.

  (8) Any Group A or Group C member who has rendered 15 years of creditable teaching service and who has, prior to becoming a member of the System, served a minimum of one full year of full-time service in the military, one full year of full-time service as a member of the Cadet Nurse Corps in World War II, the Peace Corps, VISTA, or AmeriCorps for which the member has derived no military or other pension benefits, may elect to have included in the member’s creditable service all or any part of the member’s military, Cadet Nurse Corps, Peace Corps, VISTA, or AmeriCorps service not exceeding five years. Any Group A member who elects credit under this subdivision shall deposit in the Pension Fund by a single contribution an amount computed at regular interest to be sufficient to provide at age 60 an annuity equal to one-120th of the member’s average final compensation multiplied by the number of years of the service rendered for which the member elects to receive credit. Any Group A member who elects credit for service in the Cadet Nurse Corps under this subdivision and any Group C member who elects credit under this subdivision shall deposit in the Pension Fund by a single contribution an amount computed at regular interest to be sufficient to provide at normal retirement an annuity equal to one and two-thirds or two percent, whichever is applicable pursuant to section 1937 of this title, of the member’s average final compensation multiplied by the number of years of the service for which the member elects to receive credit. Notwithstanding the provisions of this subdivision, any Group C member who was a Group B member and any Group A member shall, upon application, be granted up to three years of credit for military service during the periods June 25, 1950 through January 31, 1955, February 28, 1961 through August 4, 1964 if service was performed while in what is now the Republic of Vietnam, and August 5, 1964 through May 7, 1975 and shall not be required to make a contribution, provided the member has rendered 15 years of creditable teaching service and prior to becoming a member served a minimum of one full year of full-time service in the military for which he or she has derived no military pension benefits. Notwithstanding the foregoing, in the event of a conflict between the provisions of this subsection and the provisions of 10 U.S.C. § 12736 concerning the counting of the same full-time military service toward both military and State pensions, the provisions of the U.S. Code shall control.

  (9) Contributions required under this subsection shall be limited to contributions from Group A and Group C members.

  (10) [Repealed.]

  (11) Any Group A or Group C member who rendered service in the capacity of a teacher, as defined by the Board, in an approved public or independent school that was not a part of the System may elect to have included in the member’s creditable service all or part of any period of service in such approved school. Any member who so elects shall deposit in the Pension Fund by a single contribution an amount computed at regular interest to be sufficient to provide at normal retirement an annuity equal to one and two-thirds or two percent, whichever is applicable pursuant to section 1937 of this title, of the member’s average compensation multiplied by the number of years of service for which the member elects to receive credit. No application for credit under this subdivision shall be granted if at the time of application, the member has a vested right to retirement benefits in another retirement system based upon that service.

  (12) Any Group A or Group C member may elect to have included in the member’s creditable service years of service during which the member exercised his or her option not to be a member of the System. Any member who so elects shall deposit in the Pension Fund by a single contribution an amount computed at regular interest to be sufficient to provide at normal retirement an annuity equal to one and two-thirds or two percent, whichever is applicable pursuant to section 1937 of this title, of the member’s average compensation multiplied by the number of years of service for which the member elects to receive credit.

  (13) Any Group A or Group C member may elect to have included in the member’s creditable service all or any part of the member’s service in the capacity of a teacher in a school that was a part of the System for which the member has no credit. Any member who so elects shall deposit in the Pension Fund by a single contribution an amount computed at regular interest to be sufficient to provide at normal retirement an annuity equal to one and two-thirds or two percent, whichever is applicable pursuant to section 1937 of this title, of the member’s average final compensation multiplied by the number of years of the service for which the member elects to receive credit.

  (14) Any Group C member may elect to increase his or her retirement allowance for years of service as a Group B member prior to July 1, 1990 from one and one-quarter percent of average final compensation to one and two-thirds percent of average final compensation. A member making an election under this subdivision shall deposit in the Pension Fund by a single contribution an amount computed at regular interest to be sufficient to provide at normal retirement an annuity equal to one and two-thirds percent of the member’s average final compensation multiplied by the number of years of service for which the member elects to increase his or her retirement allowance.

  (15) Notwithstanding any provision to the contrary and except for military credit elected under subdivision (8) of this subsection, a member may not elect more than a total of 10 years of creditable service under the provisions of this subsection.

  (16) Any time a member is required to make a single contribution in connection with an election under this subsection, a member may, with the approval of the Board, contribute over a maximum of five years in installments of equal value toward the purchase of service. Those contributions shall become a part of the member’s accumulated contribution and shall be treated for all purposes in the same manner as the contributions made under subdivision (2) of this subsection. Any member who retires before completing payment as approved by the Board for the purchase of service under subdivisions (6) through (14) of this subsection shall receive pro rata credit for service purchased before the date of retirement, but if the member so elects at the time of retirement, the member may pay as much in a single sum as is necessary to provide full credit at that time.

  (17) Any member may elect to have included in the member’s creditable service years of service as a State or municipal employee. Any member who so elects shall deposit in the Pension Fund by a single contribution an amount computed at regular interest to be sufficient to provide at normal retirement an annuity equal to one and two-thirds or two percent, whichever is applicable pursuant to section 1937 of this title, of the member’s average compensation multiplied by the number of years of service for which the member elects to receive credit. No application for credit under this subdivision shall be granted if at the time of application, the member has a vested right to retirement benefits in another retirement system based upon that service.

  (c) State contributions, earnings, and payments.

  (1) All State appropriations and all reserves for the payment for all pensions including all interest and dividends earned on the assets of the Retirement System shall be accumulated in the Pension Fund. All benefits payable under the System, except for retired teacher health and medical benefits, shall be paid from the Pension Fund. Annually, the Retirement Board shall allow regular interest on the individual accounts of members in the Pension Fund that shall be credited to each member’s account.

  (2) Beginning with the actuarial valuation as of June 30, 2006, the contributions to be made to the Pension Fund by the State shall be determined on the basis of the actuarial cost method known as “entry age normal.” On account of each member, there shall be paid annually by the State into the Pension Fund a percentage of the earnable compensation of each member to be known as the “normal contribution” and an additional percentage of the member’s earnable compensation to be known as the “accrued liability contribution.” The percentage rate of such contributions shall be fixed on the basis of the liabilities of the System as shown by actuarial valuation. “Normal contributions” and “accrued liability contributions” shall be by separate appropriation in the annual budget enacted by the General Assembly.

  (3) The normal contribution shall be the uniform percentage of the total compensation of members that, if contributed over each member’s prospective period of service and added to such member’s prospective contributions, if any, will be sufficient to provide for the payment of all future pension benefits after subtracting the sum of the unfunded accrued liability and the total assets of the Pension Fund.

  (4) It is the policy of the State of Vermont to liquidate fully the unfunded accrued liability to the System. Beginning on July 1, 2008, until the unfunded accrued liability is liquidated, the accrued liability contribution shall be the annual payment required to liquidate the unfunded accrued liability over a closed period of 30 years ending on June 30, 2038, provided that:

  (A) From July 1, 2009 to June 30, 2019, the amount of each annual basic accrued liability contribution shall be determined by amortization of the unfunded liability over the remainder of the closed 30-year period in installments increasing at a rate of five percent per year.

  (B) Beginning on July 1, 2019 and annually thereafter, the amount of each annual basic accrued liability contribution shall be determined by amortization of the unfunded liability over the remainder of the closed 30-year period in installments increasing at a rate of three percent per year.

  (C) Any variation in the contribution of normal or unfunded accrued liability contributions from those recommended by the actuary and any actuarial gains and losses shall be added or subtracted to the unfunded accrued liability and amortized over the remainder of the closed 30-year period.

  (5)-(12) [Repealed.]

  (13) Annually, the Board shall certify an amount to pay the annual actuarially determined employer contribution, as calculated in this subsection, and additional amounts as follows:

  (A) in fiscal year 2024, the amount of $9,000,000.00;

  (B) in fiscal year 2025, the amount of $12,000,000.00; and

  (C) in fiscal year 2026 and in any year thereafter until the Fund is calculated to have a funded ratio of at least 90 percent, the amount of $15,000,000.00.

  (d), (e) [Repealed.]

  (f) Expenses. The expenses of the System, including all the expenses necessary in connection with the administration and operation of the System, shall be paid from the Pension and Benefits Funds.

  (g) Collection of contributions.

  (1) The proper authority or officer responsible for making up the payroll shall draw his or her warrant, at intervals agreed upon with the Board but at least semiannually, payable to the System for all contributions deducted from the compensation of members, and shall transmit these contributions to the Board, together with any schedule of these contributions the Board requires.

  (2) The Board shall certify to the Governor-Elect, as required by 32 V.S.A. § 301, an estimate of the contributions of the State that will become due and payable during the two years next following to meet the requirements of the Pension Fund of the System, and shall certify the percentage of payroll of all members that is equivalent to such amount. The amounts so certified shall be included in the budget submitted to the General Assembly. When appropriated, the Commissioner of Finance and Management shall issue his or her warrant in favor of the System for the amount certified by the Board to be necessary to carry out the provisions of this section.

  (h) Contributions by State or political subdivision. Notwithstanding the provisions of subdivision 1944(b)(2) of this title to the contrary and pursuant to the provisions of Section 414(h) of the Internal Revenue Code, the State or political subdivisions employing such members shall pick up and pay the contributions required to be paid by Group A and Group C members with respect to service rendered on and after July 1, 1992. Contributions picked up by the State or political subdivisions employing such members shall be designated for all purposes as member contribution, except that they shall be treated as State contributions in determining tax treatment of a distribution. Each member’s compensation shall be reduced by an amount equal to the amount picked up by the State or political subdivisions employing such members. This reduction, however, shall not be used to determine annual earnable compensation for purposes of determining average final compensation. Contributions picked up under this subsection shall be credited to the Pension Fund.

  (i) [Repealed.] (Amended 1959, No. 42, §§ 1, 2; 1959, No. 72, §§ 4, 5, eff. April 1, 1959; 1959 (Adj. Sess.), No. 328, § 8(b); 1963, No. 182, § 3; 1971, No. 187 (Adj. Sess.); 1971, No. 233 (Adj. Sess.), §§ 2-4; 1973, No. 141 (Adj. Sess.), § 7; 1975, No. 175 (Adj. Sess.), § 3; 1977, No. 53, §§ 2, 4, eff. April 23, 1977; 1977, No. 247 (Adj. Sess.), §§ 191-193, 195; 1981, No. 41, §§ 31-34, 39(3); 1983, No. 149 (Adj. Sess.), § 1; 1983, No. 195 (Adj. Sess.), § 5(b); 1989, No. 78, §§ 8, 9; 1989, No. 169 (Adj. Sess.), § 7; 1991, No. 24, § 11; 1991, No. 247 (Adj. Sess.), §§ 1-4; 1993, No. 49, §§ 24, 25, eff. May 28, 1993; 1995, No. 36, § 7; 1995, No. 178 (Adj. Sess.), § 179a; 1999, No. 53, §§ 7, 7a; 1999, No. 158 (Adj. Sess.), § 5; 2001, No. 29, § 6; 2001, No. 63, § 175; 2001, No. 142 (Adj. Sess.), § 206; 2003, No. 122 (Adj. Sess.), § 297f; 2005, No. 163 (Adj. Sess.), § 7; 2005, No. 165 (Adj. Sess.), § 3; 2005, No. 215 (Adj. Sess.), § 277; 2007, No. 13, § 33; 2007, No. 137 (Adj. Sess.), § 7; 2009, No. 24, § 6a; 2009, No. 74 (Adj. Sess.), § 6; 2009, No. 139 (Adj. Sess.), § 6; 2013, No. 179 (Adj. Sess.), § E.514.2; 2015, No. 18, § 7; 2015, No. 172 (Adj. Sess.), § E.514.1; 2017, No. 165 (Adj. Sess.), § 18; 2019, No. 131 (Adj. Sess.), § 87; 2021, No. 114 (Adj. Sess.), § 19, eff. July 1, 2022; 2023, No. 78, § E.514.3, eff. July 1, 2023.)

• § 1944a. Periodic actuarial reports

  The Board shall cause to be made an actuarial reevaluation of the rate of member contributions deducted from earnable compensation pursuant to subdivision 1944(b)(2) of this title, on a periodic basis at least every three years, to determine whether the amount deducted is necessary to make the contributions picked up and paid by the State for such members cost neutral to the General Fund. The actuarial re-evaluation shall consider all relevant factors including federal tax law changes. The Board shall report the results of the actuarial reevaluation to the General Assembly together with any recommendations for adjustment in the members’ contribution rate under subdivision 1944(b)(2). (Added 1991, No. 247 (Adj. Sess.), § 6.)

• § 1944b. Retired Teachers’ Health and Medical Benefits Fund

  (a) There is established the Retired Teachers’ Health and Medical Benefits Fund (Benefits Fund) to pay retiree postemployment benefits when due in accordance with the terms established by the Board of Trustees of the State Teachers’ Retirement System of Vermont pursuant to subsection 1942(p) and section 1944e of this title. The Benefits Fund is intended to comply with and be a tax exempt governmental trust under Section 115 of the Internal Revenue Code of 1986, as amended. The Benefits Fund shall be administered by the Treasurer.

  (b) The Benefits Fund shall consist of:

  (1) all monies remitted to the State on behalf of the members of the State Teachers’ Retirement System of Vermont for prescription drug plans, including manufacturer rebates, as well as monies pursuant to the Employer Group Waiver Plan with Wrap pursuant to the Medicare Prescription Drug Improvement and Modernization Act of 2003;

  (2) any monies appropriated by the General Assembly for the purpose of paying postemployment benefits for retired members and their dependents provided by subsection 1942(p) and section 1944e of this title;

  (3) any monies pursuant to subsection (h) of this section; and

  (4) [Repealed.]

  (5) any monies pursuant to section 1944d of this title.

  (c) No employee contributions shall be deposited in the Benefits Fund.

  (d) The Treasurer may invest monies in the Benefits Fund in accordance with the provisions of 32 V.S.A. § 434 or, in the alternative, may enter into an agreement with the Vermont Pension Investment Commission to invest such monies in accordance with the standards of care established by the prudent investor rule under 14A V.S.A. § 902, in a manner similar to the Commission’s investment of retirement system monies. Interest earned shall remain in the Benefits Fund, and all balances remaining at the end of a fiscal year shall be carried over to the following year. The Treasurer’s annual financial report to the Governor and the General Assembly shall contain an accounting of receipts, disbursements, and earnings of the Benefits Fund.

  (e) [Repealed.]

  (f) Contributions to the Benefits Fund shall be irrevocable and it shall be impossible at any time prior to the satisfaction of all liabilities, with respect to employees and their beneficiaries, for any part of the corpus or income of the Benefits Fund to be used for, or diverted to, purposes other than the payment of retiree postemployment benefits to members and their beneficiaries and reasonable expenses of administering the Benefits Fund and related benefit plans.

  (g) [Repealed.]

  (h) State contribution.

  (1) Beginning on July 1, 2022, and annually thereafter, the State shall make annual contributions to the Benefits Fund known as the “normal contribution” and the “accrued liability contribution,” each of which shall be fixed on the basis of the liabilities of the System as shown by the most recent actuarial valuation and made by separate appropriation in the annual budget enacted by the General Assembly:

  (A) The “normal contribution” shall be the amount that, if contributed over each member’s prospective period of service, will be sufficient to provide for the payment of all future retiree postemployment benefits after subtracting the unfunded actuarial liability and the total assets of the Benefits Fund. The “normal cost” shall be identified using the actuarial cost method known as “projected unit credit” and applying a rate of return equal to the most recently adopted actuarial rate of return pursuant to 3 V.S.A. § 523.

  (B) The “accrued liability contribution” shall be the annual payment set forth in the most recent actuarial valuation that is necessary to liquidate the unfunded accrued liability over a closed period of 26 years and determined based on the funding schedule set forth in this section.

  (i) It is the policy of the State of Vermont to liquidate fully the unfunded accrued liability for the payment of retiree postemployment benefits.

  (ii) Beginning on July 1, 2022, until the unfunded accrued liability is liquidated, the accrued liability contribution shall be the annual payment required to liquidate the unfunded accrued liability over a closed period of 26 years ending on June 30, 2048, provided that the amount of each annual basic accrued liability contribution shall be determined by amortization of the unfunded liability over the remainder of the closed 26-year period in installments.

  (2) Any variation in the contribution of normal or accrued liability contributions from those recommended by the actuary and any actuarial gains and losses shall be added or subtracted to the unfunded accrued liability and amortized over the remainder of the closed 26-year period.

  (3) The Board shall review annually the amount of State contributions recommended by the actuary of the Retirement System. Based on this review, the Board shall determine the amount of State contribution necessary for the next fiscal year to achieve and preserve the financial integrity of the funds. On or before December 15 of each year, the Board shall inform the Governor and the House and Senate Committees on Government Operations and on Appropriations in writing about the amount needed. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection. (Added 2013, No. 179 (Adj. Sess.), § E.514.1; amended 2015, No. 114 (Adj. Sess.), § 6; 2017, No. 85, § E.515.1; 2017, No. 165 (Adj. Sess.), § 19; 2019, No. 6, § 90, eff. April 22, 2019; 2019, No. 120 (Adj. Sess.), § A.38, eff. June 30, 2020; 2021, No. 114 (Adj. Sess.), § 24, eff. July 1, 2022.)

• § 1944c. Employer charges for federal grants or reimbursements

  (a) Notwithstanding any provision of law to the contrary, effective on July 1, 2015, the employer retirement costs and administrative operating expenses related to the retirement plans applicable to those teachers whose funding is provided from federal grants or through federal reimbursement shall be paid by local school systems or educational entities that participate in the Vermont Teachers’ Retirement Fund from those federal monies.

  (b) The percentage rates to be applied shall be determined by an actuary approved by the Board of Trustees of the State Teachers’ Retirement System of Vermont and shall be applied to the total earnable compensation of members prepared by the actuary in compliance with subsection 1942(r) of this title. The Secretary of Education shall annually provide an accounting of federal grants and federal reimbursements, by school system, upon which payment by the participating schools shall be determined.

  (c) The State Treasurer and the Secretary of Education shall establish procedures for the collection and deposit of those monies in the State Teachers’ Retirement System of Vermont. The Secretary of Education may delay implementation upon review of the federal grant program to permit timely and accurate claims for reimbursement of retirement expenses under a particular federal program in order to receive funding under that program. The Secretary of Education shall provide an annual report to the Senate Committee on Appropriations and the House Committee on Education regarding progress in implementation of this section. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection. (Added 2013, No. 179 (Adj. Sess.), § E.514.3; amended 2017, No. 154 (Adj. Sess.), § 22, eff. May 21, 2018.)

• § 1944d. Employer annual charge for teacher health care

  (a) Beginning on July 1, 2018, the employer of teachers who become members of the State Teachers’ Retirement System of Vermont on or after July 1, 2015 shall pay an annual assessment of $1,275.00 for each such teacher to the Benefits Fund.

  (b) Beginning on July 1, 2019, and each year thereafter, the annual assessment shall be adjusted to account for inflation, as approved annually by the Board of Trustees. (Added 2013, No. 179 (Adj. Sess.), § E.514.4; amended 2017, No. 165 (Adj. Sess.), § 20; 2018, No. 11 (Sp. Sess.), § E.515.2.)

• § 1944e. Retired teachers health and medical benefits

  (a) Payment of a portion of the cost of health and medical benefits provided by subsection 1942(p) of this title for retired members and their dependents shall be made from the Benefits Fund. The Board shall determine the total costs of the applicable standard plan for a retired member and of the applicable standard plan for a retired member and spouse, and the Board shall pay the following portion of those costs:

  (1) For retired members:

  (A) 80 percent of the cost for a retired member who has either at least 10 years of creditable service as of July 1, 2010, or 25 years of creditable service at the time of retirement;

  (B) 70 percent of the cost for a retired member who has fewer than 10 years of creditable service as of July 1, 2010, and 20 years or more but fewer than 25 years of creditable service at the time of retirement;

  (C) 60 percent of the cost for a retired member who has fewer than 10 years of creditable service as of July 1, 2010, and 15 or more but fewer than 20 years of creditable service at the time of retirement; and

  (D) for retired members who do not meet the requirements of subdivisions (A) through (C) of this subdivision (1), no portion of the costs shall be paid.

  (2) For a retired member’s spouse. In addition to the payments for retired members’ health and medical benefits specified in subdivision (a)(1) of this section, 80 percent of the cost for the retired member’s spouse during the retired member’s life, where:

  (A) the retired member has fewer than 15 years of creditable service as of July 1, 2010, and at least 25 years of creditable service at the time of retirement; or

  (B) the retired member has 15 or more but fewer than 25 years of creditable service as of July 1, 2010, and at least 10 additional years of creditable service at the time of retirement; or

  (C) the retired member has 25 or more but fewer than 30 years of creditable service as of July 1, 2010, and at least 35 years of creditable service at the time of retirement; or

  (D) the retired member has at least 30 years of creditable service as of July 1, 2010, and at least five additional years of creditable service at the time of retirement; and

  (E) the service was not purchased, restored, granted, or transferred on or after July 1, 2010.

  (b) The Board shall pay an equal dollar amount for eligible retirees regardless of the plan selected. All eligible retirees may select health plan coverage from a range of plans approved by the Board. Retired members may authorize deductions to be made from their monthly retirement allowance for the balance of the cost of such benefits for the retired members and their dependents.

  (c) Periodically, the Board shall approve the following:

  (1) a standard plan for retirees who are not yet eligible for Medicare, which plan shall provide first dollar coverage for subscribers;

  (2) a standard plan for retirees who are eligible for Medicare, which plan shall provide first dollar coverage for subscribers; and

  (3) a range of plans that may be selected by retirees, including the standard applicable plans.

  (d) For fiscal year 2004 and thereafter, the cost of the applicable standard plan determined under this subsection shall not exceed the cost of the $250.00 comprehensive plan offered in fiscal year 2003, adjusted for the appropriate fiscal year. In the event of the discontinuance of the $250.00 comprehensive plan, a plan with a comparable expenditure profile shall be used as a benchmark.

  (e) As of January 1, 2007 and thereafter, upon retirement, members entitled to prorated Group medical benefit plan premium payments from the Retirement System under the terms of this section shall have a one-time option to reduce the percentage of premium payments from the Benefits Fund during the member’s life, with the provision that the Benefits Fund shall continue making an equal percentage of premium payments after the member’s death for the life of the dependent beneficiary nominated by the member under section 1941 of this title, should such dependent beneficiary survive the member. The Board, after consultation with its actuary, shall establish reduced premium payment percentages that are as cost neutral to the Benefits Fund as possible. (Added 2017, No. 165 (Adj. Sess.), § 21; amended 2019, No. 25, § 2, eff. May 16, 2019.)

• § 1945. Application of other laws

  No other provision of law in any other statute that provides wholly or partly at the expense of the State of Vermont for pensions or retirement benefits for teachers of the State, their widows, or other dependents, shall apply to members or beneficiaries of the Retirement System hereby established, their widows, or other dependents.

• § 1946. Exemption of member’s interest; assignment

  That portion of the compensation of a member deducted or to be deducted under this chapter, the rights of a member or beneficiary to an annuity, pension, or retirement allowance hereunder, and all a member’s rights in the assets of the System, shall be exempt from taxation, including income tax, and from the operation of any laws relating to bankruptcy or insolvency, and shall not be attached or taken upon execution or other process of any court. No assignment by a member or beneficiary of any part of the assets to which he or she is or may be entitled, or of any right to or interest in the assets, shall be valid except as specifically provided in this chapter. (Amended 2007, No. 13, § 34.)

• § 1946a. Tax exemption for member of retirement system of another state or political subdivision thereof

  Payments received by a member of a retirement system of another state or political subdivision thereof, whether called a pension, an annuity, a retirement allowance, or any other name, shall be exempt from taxation, including income tax, provided that such member was at the time of retirement a member of the teaching or supervising staff covered by such retirement system. The term “teaching or supervising staff” shall include the superintendent, assistant superintendents, principals, supervisors, assistant supervisors, directors, assistant directors, examiners, supervising school physicians, supervisors of health education, supervising nurses, and all other persons permanently employed in giving or supervising instruction in a public day school, normal school, teachers’ college, or other educational institution located in, and supported and controlled by, any state or political subdivision thereof.

• § 1946b. Alternate payee; domestic relations orders

  (a) As used in this section:

  (1) “Alternate payee” means any individual who is recognized by a domestic relations order as having a right to receive all, or a portion of, another individual’s payment rights in the System.

  (2) “Domestic relations order” means a judgment, decree, or order of the Family Division of the Superior Court issued pursuant to 4 V.S.A. chapter 10, concerning marital property rights that includes a transfer of all, or a portion of, a member’s or beneficiary’s payment rights in the System to an alternate payee. It also means a judgment, decree, or order from a court of competent jurisdiction in another state, concerning marital property rights that includes a transfer of all, or a portion of, a member’s or beneficiary’s payment rights in the System to an alternate payee. Domestic relations orders shall conform to the requirements of this section in order to be effective. A domestic relations order does not take effect until it is served on the System by certified or registered mail, return receipt requested. In the event that there is more than one domestic relations order, the order that is most recent in time and that has been served on the System will control.

  (b) A member’s or beneficiary’s rights in the System may be modified by a domestic relations order as provided in this section.

  (c) A domestic relations order shall contain all of the following elements:

  (1) the identity of the member or beneficiary and the alternate payee by full name, current address, and Social Security number;

  (2) the amount or percentage of the member’s or beneficiary’s benefits to be paid by the Board to the alternate payee and the date or dates upon which the calculation of payments is to be based;

  (3) the number of payments or time period in which payments are required to be made under the domestic relations order; and

  (4) each retirement plan to which the domestic relations order applies.

  (d) A domestic relations order shall not provide:

  (1) for a type or form of benefit, option, or payment not available to the affected member or beneficiary;

  (2) for an amount or duration of payment greater than that available to the affected member or beneficiary;

  (3) that payment of a retirement allowance commence before the member departs from service and commences to receive benefits;

  (4) withdrawal of the member’s contributions without the consent of the member and the alternate payee; or

  (5) any requirements that are contrary to the intent of this section.

  (e) A domestic relations order may provide for apportionment of post-retirement adjustments to the retirement allowance.

  (f) Payments to the alternate payee under a domestic relations order shall be limited to the life of the member or beneficiary.

  (g) An alternate payee’s rights and interests under this section shall not survive the alternate payee’s death and shall not be transferable by inheritance.

  (h) An alternate payee’s rights or interests acquired pursuant to this section are not subject to assignment, execution, garnishment, attachment, or other process. An alternate payee’s rights or interests may be modified only by a domestic relations order amending the domestic relations order that established the right or interest.

  (i) The Board, the System, its agents, and employees shall not be liable to any person for carrying out the terms and conditions of a domestic relations order.

  (j) The Board may adopt rules to implement this section. (Added 1995, No. 36, § 8; amended 2009, No. 154 (Adj. Sess.), § 238; 2021, No. 20, § 63.)

• § 1947. Penalty

  Whoever with intent to deceive shall make any statements or reports required under this chapter that are untrue, or shall falsify or permit to be falsified any record or records of the System, shall be guilty of a misdemeanor and shall be punishable therefor under the laws of this State.

• § 1948. Errors

  Should any mistake be made, or should any change or error in the records result in any member or beneficiary receiving from the System more or less than he or she would have been entitled to receive had the records been correct, the Board shall have the power, in its discretion, to correct such mistake or such error, and as far as practicable, to adjust the payments in such a manner that the actuarial equivalent of the benefit to which such member or beneficiary was correctly entitled shall be paid or in such a manner that the impact upon the fund is de minimis. (Amended 2017, No. 165 (Adj. Sess.), § 22.)

• § 1949. Postretirement adjustments to retirement allowances

  (a) Postretirement adjustments to retirement allowance. On January 1 of each year, the retirement allowance of each beneficiary of the System who is in receipt of a retirement allowance for at least a one-year period as of December 31 in the previous year, and who meets the eligibility criteria set forth in this section, shall be adjusted by the amount described in subsection (d) of this section. In no event shall a beneficiary receive a negative adjustment to the beneficiary’s retirement allowance.

  (b) Calculation of net percentage increase. Each year, a determination shall be made of any increase or decrease, to the nearest one-tenth of a percent, in the Consumer Price Index for the month ending on June 30 of that year to the average of the Consumer Price Index for the month ending on June 30 of the previous year.

  (1) Consumer Price Index; decreases. In the event of a decrease of the Consumer Price Index as of June 30 for the preceding year, there shall be no adjustment to the retirement allowance of a beneficiary for the subsequent year beginning on January 1; provided, however, that:

  (A) such decrease shall be applied as an offset against the first subsequent year’s increase of the Consumer Price Index up to the full amount of such increase; and

  (B) to the extent that such decrease is greater than such subsequent year’s increase, such decrease shall be offset in the same manner against two or more years of such increases, for up to but not exceeding five subsequent years of such increases, until fully offset.

  (2) Consumer Price Index; increases. In the event of an increase in the Consumer Price Index, and provided there remains an increase following the application of any offset as in subdivision (1) of this subsection, that amount shall be identified as the net percentage increase and used to determine the members’ postretirement adjustment as set forth in subsection (d) of this section.

  (c) Eligibility for postretirement adjustment. In order for a beneficiary to receive a postretirement adjustment allowance, the beneficiary must meet the following eligibility requirements:

  (1) For any Group A or Group C member eligible for normal retirement, or who is vested deferred, on or before June 30, 2022, the member must be in receipt of a retirement allowance for at least 12 months prior to the January 1 effective date of any postretirement adjustment.

  (2) For any Group C member who is first eligible for normal retirement and leaves active service on or after July 1, 2022, the member must be in receipt of a retirement allowance for at least 24 months prior to the January 1 effective date of any postretirement adjustment.

  (3) Special rule for Group C early retirement. A Group C member in receipt of an early retirement allowance shall not receive a postretirement adjustment to the member’s retirement allowance until such time as the member has reached normal retirement age, provided the member meets all eligibility criteria set forth in this subsection.

  (d) Amount of postretirement adjustment. The postretirement adjustment for each member who meets the eligibility criteria set forth in subsection (c) of this section shall be as follows:

  (1) the full amount of the net percentage increase calculated pursuant to subsection (b) of this section for all Group A members, provided that:

  (A) the net percentage increase following the application of any offset as provided in this section equals or exceeds one percent; and

  (B) the maximum amount of any adjustment under this section shall be five percent; and

  (2) one-half of the net percentage increase calculated pursuant to subsection (b) of this section for all Group C members, provided that:

  (A) For Group C members eligible for normal retirement or who are vested deferred on or before June 30, 2022, the maximum amount of any adjustment under this section shall be five percent. An adjustment of less than one percent shall be assigned a value of one percent.

  (B) For Group C members first eligible for normal retirement and who leave active service on or after July 1, 2022, the maximum amount of any adjustment under this section shall be four percent and the minimum amount shall be zero percent.

  (e) As used in this section, “Consumer Price Index” means the Northeast Region Consumer Price Index for all urban consumers, designated as “CPI-U,” in the northeast region, as published by the U.S. Department of Labor, Bureau of Labor Statistics. (Added 1971, No. 233 (Adj. Sess.), § 1; amended 1981, No. 41, § 35; 1989, No. 169 (Adj. Sess.), § 8; 1991, No. 64, § 8, eff. June 18, 1991; 1991, No. 247 (Adj. Sess.), § 5; 1999, No. 158 (Adj. Sess.), § 13; 2009, No. 74 (Adj. Sess.), § 7; 2009, No. 139 (Adj. Sess.), §§ 6a, 6b, 7, 13; 2011, No. 63, § H.2; 2015, No. 114 (Adj. Sess.), § 7; 2019, No. 131 (Adj. Sess.), § 88; 2021, No. 114 (Adj. Sess.), § 23, eff. May 9, 2022; 2021, No. 173 (Adj. Sess.), § 2, eff. July 1, 2022; 2023, No. 87 (Adj. Sess.), § 85, eff. March 13, 2024.)

• § 1949a. Postretirement adjustment allowance account

  (a) Intent. It is the intent of the General Assembly to recognize members who are in active service on or before June 30, 2022 and made contributions for the duration of fiscal year 2023 and members who are in active service on or after July 1, 2022 and made contributions for at least one year, as part of a broader effort to improve the health of the System. As an acknowledgment of these additional contributions, once the System is in a healthier financial position, it is the intent of the General Assembly that these members should receive postretirement adjustment allowances that will more fully reflect the net percentage increase in the Consumer Price Index. It is also the intent of the General Assembly that the postretirement adjustment allowance formula should be incrementally increased to 100 percent of the net percentage increase in the Consumer Price Index, but that no increase should occur to the formula unless the funded ratio of the System is at least 80 percent funded on an actuarial value basis and the accumulated assets of the Account are equal to or exceed the present value of the benefits to accrue to members.

  (b) Creation. There is established the Postretirement Adjustment Allowance Account, to be maintained under the Retirement System, which shall be used to provide funding for postretirement adjustment formula enhancements or other benefits that may accrue to eligible members pursuant to the requirements of subsection (d) of this section.

  (c) Funds. The Account shall consist of:

  (1) any amounts transferred to it from the General Fund Balance Reserve established in 32 V.S.A. § 308c;

  (2) any amounts transferred or appropriated to it by the General Assembly; and

  (3) interest earned pursuant to subsection (d) of this section.

  (d) Account administration. The Postretirement Adjustment Allowance Account shall be subordinate to the retirement benefits provided by the Retirement System. Contributions to the Account shall be irrevocable, and it shall be impossible at any time before satisfaction of all liabilities to provide funding for postretirement adjustment formula enhancements or other benefits that may accrue to eligible members for any part of the corpus or income of the Account to be used for, or diverted to, any purpose other than providing funding for postretirement adjustment formula enhancements or other benefits that may accrue to eligible members. All balances in the Account at the end of the fiscal year shall be carried forward, and interest earned shall remain in the Account.

  (e) Recommendation of Board. In any fiscal year, the Board may recommend to the General Assembly that the monies in the Account be used to provide for postretirement adjustment formula enhancements or other benefits that may accrue to eligible members in the System, provided that:

  (1) an evaluation has been conducted pursuant to section 1949b of this chapter;

  (2) the actuary has certified that the System has a funded ratio of at least 80 percent in the most recent fiscal year; and

  (3) the actuary has certified that the Account has sufficient assets to pay for the present value of any benefit being recommended.

  (f) Use of funds. In the event that the General Assembly approves of the Board’s recommended postretirement adjustment formula enhancements or other benefit change pursuant to subsection (e) of this section, the Board may direct that funds sufficient to pay the present value of change be charged from the Account for that purpose.

  (g) Account charges. In no event shall the funds charged from the Account exceed the outstanding Account balance.

  (h) Account assets.

  (1) For funding purposes, any asset value utilized in the calculation of the actuarial value of assets of a system shall exclude the Account as of the asset determination date for such calculation.

  (2) For all purposes other than funding, the funds in the Account shall be considered assets of the System.

  (i) Definition. As used in this section, “eligible member” means:

  (1) a member of the System who is in active service on or before June 30, 2022 and made contributions for the duration of fiscal year 2023; or

  (2) a member of the System who is in active service on or after July 1, 2022 and made contributions for at least one year. (Added 2021, No. 114 (Adj. Sess.), § 21, eff. July 1, 2022.)

• § 1949b. Postretirement adjustment to retirement allowance; formula; evaluation

  (a) On or before September 1, 2027 and every three years thereafter, or at the request of the Board in conjunction with any proposed changes to the amortization schedule, the Board shall consider the intent set forth in subsection 1949a(a) of this chapter and evaluate whether to modify the postretirement adjustment formula or any other benefit that may accrue to the members of the System who are in active service on or before June 30, 2022 and made contributions for the duration of fiscal year 2023 and members in active service on or after July 1, 2022 and made contributions for at least one year. The evaluation shall only include a proposed benefit change if the Postretirement Adjustment Allowance Fund has sufficient assets to pay for the present value of that benefit.

  (b) On or before January 15, 2028 and every three years thereafter, or following a request for an evaluation by the Board, the Board shall submit a report to the House and Senate Committees on Government Operations with the results of the evaluation described in subsection (a) of this section. (Added 2021, No. 114 (Adj. Sess.), § 22, eff. July 1, 2022.)

• § 1950. Repealed. 1989, No. 169 (Adj. Sess.), § 11.

• § 1951. Group A members; limit on contributions

  Contributions in the form of a deduction from compensation under section 1944 of this title shall cease for any Group A member who attains 25 years of creditable service and the member shall continue to accrue creditable service, without such a contribution, at the rate of one and two-thirds percent until the member retires. (Added 1989, No. 169 (Adj. Sess.), § 9; amended 2017, No. 165 (Adj. Sess.), § 23.)

• § 1952. Repealed. 2013, No. 22, § 17, eff. July 1, 2013.

• § 1953. Prior service credit

  A teacher who has ceased being a member upon reemployment is entitled to prior service credit upon depositing in the Pension Fund the contributions that would have been deducted from the teacher’s compensation had he or she remained a member with interest as set forth in section 1944 of this title. The teacher, in order to qualify for the prior service credit, shall also deposit in the Fund a sum equal to the contributions that would have been contributed by the State had the teacher remained a member with interest as set forth in section 1944 of this title. (Added 2005, No. 104 (Adj. Sess.), § 1; amended 2007, No. 13, § 35; 2017, No. 165 (Adj. Sess.), § 24.)