The Vermont Statutes Online

Title 3: Executive

Chapter 016: Vermont Employees' Retirement System

• Subchapter 001: GENERALLY

• § 455. Definitions

  (a) As used in this subchapter:

  (1) “Accumulated contributions” shall mean the sum of all the amounts deducted from the compensation of a member together with any amount transferred to the account of the member established pursuant to this system from the respective account of said member under one or both of the predecessor systems, with interest thereon, as provided in section 473 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 472a(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) For a Group A, Group F, or Group G member, 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, 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 service credit to correspond with the last pay date.

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

  (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) For a Group C member, the average annual earnable compensation of a member during the two consecutive fiscal years beginning July 1 and ending June 30 of creditable service affording the highest such average, or during all of the years in the member’s creditable service if fewer than two years. If the member’s highest two years of earnable compensation are the two years prior to separation of service and the member separates prior to the end of a fiscal year, 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 service credit to correspond with the last pay date.

  (ii) The earnable compensation and service credit earned in the preceding fiscal year.

  (iii) The remaining service credit that is needed to complete the two full years, which shall be factored from the fiscal year preceding the fiscal year described in subdivision (ii) of this subdivision (B). 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.

  (C) For purposes of determining average final compensation for Group A or Group C members, a member who has accumulated unused sick leave at retirement shall be deemed to have worked the full normal working time for the member’s position for 50 percent of such leave, at the member’s full rate of compensation in effect at the date of the member’s retirement. For purposes of determining average final compensation for Group F or Group G members, unused annual or sick leave, termination bonuses, and any other compensation for service not actually performed shall be excluded. The average final compensation for a State’s Attorney and the Defender General shall be determined by the State’s Attorney’s or the Defender General’s highest annual compensation earned during the member’s creditable service.

  (D) For purposes of determining average final compensation for a member who has accrued service in more than one group plan within the System, the highest consecutive years of earnings shall be based on the formulas set forth in subdivision (A) or (B) of this subdivision (4) using the earnable compensation received while a member of the System.

  (E) For Group A, C, F, or G members who retire on or after July 1, 2012, an increase in compensable hours in any year used to calculate average final compensation that exceeds 120 percent of average compensable hours shall be excluded from that year when calculating average final compensation.

  (F) For a Group D member:

  (i) Who retires on or before June 30, 2022, the member’s final salary.

  (ii) Who retires on or after July 1, 2022, but who, on or before June 30, 2022, has five years or more of service as a Supreme Court Justice, a Superior judge, an Environmental judge, a District judge, or a Probate judge, or any combination thereof, and has attained 57 years of age or older, or is a Group D member on or before June 30, 2022 and has 15 years or more of creditable service, the member’s final salary.

  (iii) Who retires on or after July 1, 2022 and who does not meet the requirements set forth in subdivisions (i) and (ii) of this subdivision (F), the average annual earnable compensation of a member during the two consecutive fiscal years beginning on July 1 and ending on June 30 of creditable service affording the highest such average, or during all of the years in the member’s creditable service if fewer than two years. If the member separates prior to the end of a fiscal year, 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 service credit to correspond with the last pay date.

  (II) The earnable compensation and service credit earned in the preceding fiscal year.

  (III) The remaining service credit that is needed to complete the two full years, which shall be factored from the fiscal year preceding the fiscal year described in subdivision (II) of this subdivision (F)(iii). 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.

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

  (6) “Creditable service” shall mean service for which credit is allowed under section 458 of this title, plus service transferred under section 495 of this title.

  (7) “Department” shall mean any department, institution, or agency of this State government.

  (8) “Earnable compensation” shall mean the full rate of compensation that would be payable to an employee if the employee worked the full normal working time for the employee’s position. In cases where compensation includes maintenance, the Retirement Board shall fix the value of that part of the compensation not paid in money.

  (9) “Employee” shall mean:

  (A) Any regular officer or employee of the Vermont Historical Society or a department other than a person included under subdivision (B) of this subdivision (9), who is employed for not less than 40 calendar weeks in a year. “Employee” includes deputy State’s Attorneys, victim advocates employed by a State’s Attorney pursuant to 13 V.S.A. § 5306, secretaries employed by a State’s Attorney pursuant to 32 V.S.A. § 1185, and other positions created within the State’s Attorneys’ offices that meet the eligibility requirements for membership in the Retirement System.

  (B) Any regular officer or employee of the Department of Public Safety assigned to police and law enforcement duties, including the Commissioner of Public Safety appointed before July 1, 2001; but, irrespective of the member’s classification, shall not include any member of the General Assembly as such, any person who is covered by the Vermont Teachers’ Retirement System, any person engaged under retainer or special agreement or Group C beneficiary employed by the Department of Public Safety for not more than 208 hours per year, or any person whose principal source of income is other than State employment. In all cases of doubt, the Retirement Board shall determine whether any person is an employee as defined in this subchapter. Also included under this subdivision are employees of the Department of Liquor and Lottery who exercise law enforcement powers, employees of the Department of Fish and Wildlife assigned to law enforcement duties, motor vehicle inspectors, full-time deputy sheriffs compensated by the State of Vermont whose primary function is transports, full-time members of the Capitol Police force, investigators employed by the Criminal Division of the Office of the Attorney General, Department of State’s Attorneys, Department of Health, or Office of the Secretary of State, who have attained Level III law enforcement officer certification from the Vermont Criminal Justice Council, who are required to perform law enforcement duties as the primary function of their employment, and who may be subject to mandatory retirement permissible under 29 U.S.C. § 623(j), who are first included in membership of the system on or after July 1, 2000. Also included under this subdivision are full-time firefighters employed by the State of Vermont and the Defender General.

  (10) “Medical Board” shall mean the board of physicians provided for in section 471 of this title.

  (11) “Member” means any employee included in the membership of the Retirement System under section 457 of this title.

  (A) “Group A members” means employees classified under subdivision (A) of subdivision (9) of this subsection (a).

  (B) [Repealed.]

  (C) “Group C members” means employees classified under subdivision (B) of subdivision (9) of this subsection (a) who become members as of the date of establishment, any person who is first included in the membership of the System on or after July 1, 1998, any person who was a Group B member on June 30, 1998, who was in service on that date, and any person who was a Group B member on June 30, 1998, who was absent from service on that date who returns to service on or after July 1, 1998.

  (D) “Group D members” means Justices of the Supreme Court, Superior judges, district judges, environmental judges, and probate judges.

  (E) “Group F member” means any person who is first included in the membership of the System on or after January 1, 1991, any person who was a Group E member on December 31, 1990, who was in service on that date, and any person who was a Group E member on December 31, 1990, who was absent from service on that date who returns to service on or after January 1, 1991.

  (F) “Group G member” means:

  (i) the following employees who are first employed in the positions listed in this subdivision (F)(i) on or after July 1, 2023, or who are members of the System as of June 30, 2022 and make an irrevocable election to prospectively join Group G on or before June 30, 2023, pursuant to the terms set by the Board: facility employees of the Department of Corrections, as Department of Corrections employees who provide direct security and treatment services to offenders under supervision in the community, employees of a facility for justice-involved youth, and employees of the Vermont Psychiatric Care Hospital or its successor in interest, who provide direct patient care; and

  (ii) the following employees who are first employed in the positions listed in this subdivision (F)(ii) or first included in the membership of the System on or after January 1, 2025, or who are members of the System as of December 31, 2024 and make an irrevocable election to join Group G on or before December 31, 2024, pursuant to the terms set by the Board:

  (I) all sheriffs; and

  (II) deputy sheriffs who:

  (aa) are employed by county sheriff’s departments that participate in the Vermont Employees’ Retirement System;

  (bb) have attained Level II or Level III law enforcement officer certification from the Vermont Criminal Justice Council;

  (cc) are required to perform law enforcement duties as the primary function of their employment; and

  (dd) are not full-time deputy sheriffs compensated by the State of Vermont whose primary function is transports as defined in 24 V.S.A. § 290(b) and eligible for Group C pursuant to 3 V.S.A. § 455(9)(B).

  (12) “Membership service” means service rendered while a member of the Retirement System.

  (13) “Normal retirement date” means:

  (A) with respect to a Group A member, the first day of the calendar month next following (i) attainment of 65 years of age, and following completion of five years of creditable service for those members hired on or after July 1, 2004, or (ii) attainment of age 62 and completion of 20 years of creditable service, whichever is earlier;

  (B) with respect to a Group C member, the first day of the calendar month next following attainment of 55 years of age, and following completion of five years of creditable service for those members hired on or after July 1, 2004, or completion of 30 years of service, whichever is earlier;

  (C) with respect to a Group D member:

  (i) for those members first appointed or elected on or before June 30, 2022, the first day of the calendar month next following attainment of 62 years of age and completion of five years of creditable service; or

  (ii) for those members first appointed or elected on or after July 1, 2022, the first day of the calendar month next following attainment of 65 years of age and completion of five years of creditable service; and

  (D) with respect to a Group F member, the first day of the calendar month next following attainment of 62 years of age, and following completion of five years of creditable service for those members hired on or after July 1, 2004, or completion of 30 years of creditable service, whichever is earlier; and with respect to a Group F member first included in the membership of the system on or after July 1, 2008, the first day of the calendar month next following attainment of 65 years of age and following completion of five years of creditable service, or attainment of 87 points reflecting a combination of the age of the member and number of years of service, whichever is earlier.

  (E) with respect to a Group G member:

  (i) for facility employees of the Department of Corrections, Department of Corrections employees who provide direct security and treatment services to offenders under supervision in the community, employees of a facility for justice-involved youth, or employees of the Vermont Psychiatric Care Hospital or its predecessor or successor in interest, who provide direct patient care, who were first included in the membership of the System on or before June 30, 2008, who were employed as of June 30, 2022, and who made an irrevocable election to prospectively join Group G on or before July 1, 2023, pursuant to the terms set by the Board, the first day of the calendar month next following the earlier of:

  (I) 62 years of age and following completion of five years of creditable service;

  (II) completion of 30 years of creditable service; or

  (III) 55 years of age and following completion of 20 years of creditable service;

  (ii) for facility employees of the Department of Corrections, Department of Corrections employees who provide direct security and treatment services to offenders under supervision in the community, as employees of a facility for justice-involved youth, or employees of the Vermont Psychiatric Care Hospital or its predecessor or successor in interest, who provide direct patient care, who were first included in the membership of the System on or after July 1, 2008, who were employed as of June 30, 2022, and who made an irrevocable election to prospectively join Group G on or before July 1, 2023, pursuant to the terms set by the Board, the first day of the calendar month next following the earlier of:

  (I) 65 years of age and following completion of five years of creditable service;

  (II) attainment of 87 points reflecting a combination of the age of the member and number of years of service; or

  (III) 55 years of age and following completion of 20 years of creditable service;

  (iii) for facility employees of the Department of Corrections, Department of Corrections employees who provide direct security and treatment services to offenders under supervision in the community, employees of a facility for justice-involved youth, or employees of the Vermont Psychiatric Care Hospital or its predecessor or successor in interest, who provide direct patient care, who first become a Group G member on or after July 1, 2023, the first day of the calendar month next following the earlier of:

  (I) attainment of 55 years of age and following completion of 20 years of creditable service; or

  (II) 65 years of age and following completion of five years of creditable service;

  (iv) for all sheriffs and those deputy sheriffs who meet the requirements pursuant to subdivision (11)(F)(ii) of this subsection (a), who were first included in the membership of the System on or before June 30, 2008, who were employed as of December 31, 2024, and who made an irrevocable election to prospectively join Group G on or before January 1, 2025, pursuant to the terms set by the Board, the first day of the calendar month next following the earlier of:

  (I) 62 years of age and following completion of five years of creditable service;

  (II) completion of 30 years of creditable service; or

  (III) 55 years of age and following completion of 20 years of creditable service;

  (v) for all sheriffs and those deputy sheriffs who meet the requirements pursuant to subdivision (11)(F)(ii) of this subsection (a), who were first included in the membership of the System on or after July 1, 2008, who were employed as of December 31, 2024, and who made an irrevocable election to prospectively join Group G on or before January 1, 2025, pursuant to the terms set by the Board, the first day of the calendar month next following the earlier of:

  (I) 65 years of age and following completion of five years of creditable service;

  (II) attainment of 87 points reflecting a combination of the age of the member and number of years of service; or

  (III) 55 years of age and following completion of 20 years of creditable service; or

  (vi) for all sheriffs and those deputy sheriffs who meet the requirements pursuant to subdivision (11)(F)(ii) of this subsection (a), who first become a Group G member after January 1, 2025, the first day of the calendar month next following the earlier of:

  (I) attainment of 55 years of age and following completion of 20 years of creditable service; or

  (II) 65 years of age and following completion of five years of creditable service.

  (14) “Pension” shall mean annual payments for life derived from contributions by the State.

  (15) “Predecessor system” shall mean, where applicable, the Vermont Employees’ Retirement System and the Vermont State Police and Motor Vehicle Inspectors’ Retirement System, either one of them, or a combination thereof.

  (16) “Prior service” shall mean service rendered prior to the date of membership in the Retirement System for which credit was given under the terms of one or both of the predecessor systems as set forth in section 458 of this title.

  (17) “Regular interest” shall mean interest at such rate or rates as may be set from time to time by the Retirement Board in accordance with subsection 472(b) of this title.

  (18) “Retirement allowance” or “maximum allowance” shall mean the sum of the annuity and the pension. All retirement allowances shall be payable in equal monthly installments except that when the retirement allowance is less than $20.00 per month it shall be payable on such basis as the Board may direct.

  (19) “Retirement Board” or “Board” shall mean the board provided for in section 471 of this title to administer the Retirement System.

  (20) “Retirement System” shall mean the Vermont State Retirement System as defined in section 456 of this title.

  (21) “Service” shall mean service as an employee for which compensation is paid by the State.

  (22) “Social Security benefit” shall mean the amount of the member’s primary insurance benefit or disability insurance benefit under Title II of the Social Security Act and such other benefit or benefits as may be payable on the member’s account under said title, computed on the basis of such act as in effect at the time of retirement and limited to the portion of such benefit or benefits which is attributable to service for which the member receives credit under section 458 of this title, to which a member or other person on his or her account is or would upon proper application be entitled, irrespective of earnings the member or members may be receiving in excess of any limit on earnings for full entitlement to such benefit or benefits.

  (23) “Survivor’s insurance benefit” shall mean the amount paid or payable under Title II of the Social Security Act, computed on the basis of such act as in effect at the time of the member’s death and limited to the portion of such amount which is attributable to service for which he or she receives credit under section 458 of this title, to any person or persons on account of the death of a member, even though such amount or any part thereof is not actually received by such person because of his or her failure to make proper application therefor, or because of his or her receipt of earnings which would make him or her ineligible for such benefit.

  (24) “Commission” shall mean the Vermont Pension Investment Commission.

  (25) “Fund” or “Vermont State Retirement Fund” shall mean the fund created by section 473 of this title, which shall contain the assets of the Retirement System and from which shall be paid the benefits due to beneficiaries and the expenses of the Retirement System.

  (26) “Average compensable hours” shall mean average annual compensable hours for a period of five full years immediately preceding the years used to determine average final compensation for any member who terminates his or her position after July 1, 2002. If a member’s compensable hours in any year used to calculate average final compensation exceeds 120 percent of average compensable hours, the compensation for hours worked in excess of 120 percent shall be excluded from average final compensation for that particular year. Average compensable hours form the benchmark to preclude abuses by implementing a 20-percent limit on increases in compensable hours in any year used to calculate average final compensation.

  (27) “Compensable hours” shall mean all hours worked during a fiscal year and shall include the following types of paid time: regular hours worked, overtime hours worked, and paid leave.

  (28) “Successor in interest” means the mental health hospital owned and operated by the State that provides acute inpatient care and replaces the Vermont State Hospital.

  (b) [Repealed.] (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1973, No. 37, § 1; 1977, No. 153 (Adj. Sess.), § 1; No. 222 (Adj. Sess.), § 3, eff. July 2, 1978; 1981, No. 41, §§ 1-3; 1987, No. 121, § 14; 1989, No. 78, §§ 1, 3, 10; 1989, No. 277 (Adj. Sess.), §§ 17d-17f, eff. Jan. 1, 1991; 1997, No. 68 (Adj. Sess.), § 3, eff. March 1, 1998; No. 89 (Adj. Sess.), § 2; 1999, No. 158 (Adj. Sess.), § 22; 2001, No. 57, § 1; 2001, No. 116 (Adj. Sess.), § 5, eff. May 28, 2002; 2003, No. 66, § 302a, eff. July 1, 2004; 2003, No. 115 (Adj. Sess.), § 1; No. 122 (Adj. Sess.), § 297; 2005, No. 50, § 3; 2005, No. 165 (Adj. Sess.), § 1; 2007, No. 13, § 1; No. 47, § 13; 2007, No. 116 (Adj. Sess.), § 1; No. 137 (Adj. Sess.), § 1; No. 146 (Adj. Sess.), § 3; 2009, No. 139 (Adj. Sess.), §§ 1, 2, 13(a); 2011, No. 79 (Adj. Sess.), § 11, eff. April 4, 2012; 2013, No. 22, § 1; 2013, No. 115 (Adj. Sess.), § 1; 2013, No. 141 (Adj. Sess.), § 12, eff. July 1, 2015; 2015, No. 58, § E.203.2; 2015, No. 97 (Adj. Sess.), § 3; 2017, No. 81, § 1, eff. June 15, 2017; 2017, No. 165 (Adj. Sess.), § 1; 2019, No. 73, § 19; 2019, No. 131 (Adj. Sess.), § 1; 2021, No. 114 (Adj. Sess.), § 2, eff. July 1, 2022; 2023, No. 3, § 96, eff. March 20, 2023; 2023, No. 130 (Adj. Sess.), § 1, eff. July 1, 2024.)

• § 456. Name and date of establishment

  The date of establishment of the Retirement System shall be July 1, 1972. The System shall be known as the “Vermont State Retirement System,” and by such name all of its business shall be transacted, all of its funds invested, and all of its cash and securities and other property held in trust for the purpose for which received. (Added 1971, No. 231 (Adj. Sess.), § 4.)

• § 457. Members

  (a) Any person who was a member of either of the predecessor systems immediately preceding the date of establishment shall become a member of the Retirement System as of the date of establishment.

  (b) Any person who became an employee within the three-year period prior to the date of establishment, but did not become a member of the Vermont Employees’ Retirement System because he or she had not completed three consecutive years of service prior to the date of establishment, shall become a member as a condition of employment upon his or her completion of three consecutive years of service.

  (c) Any person who becomes an employee after the date of establishment shall become a member as a condition of employment (1) upon the completion of three consecutive years of service in the case of those employees classified under subdivision 455(a)(9)(A) of this title hired prior to July 1, 1978; and (2) upon employment in the case of those employees classified under (B) of subdivision (a)(9), and upon employment in the case of those employees classified under subdivision 455(a)(9)(A) hired on or after July 1, 1978 except employees hired in a temporary capacity. No person shall join the system as a Group E member after December 31, 1990.

  (d) Should any Group A, C, D, F, or G member who has less than five years of creditable service in any period of five consecutive years after last becoming a member be absent from service more than three years or should the member withdraw his or her contributions, or become a beneficiary or die, the member shall thereupon cease to be a member. However, the membership of any employee entering such classes of military or naval service of the United States as may be approved by resolution of the Retirement Board, shall be continued during such military or naval service if the member does not withdraw his or her contributions, but no such member shall be considered in the service of the State for the purpose of the Retirement System during such military or naval service, except as provided in subsection 458(e) of this title.

  (e) For purposes of benefits available under this chapter, former county court employees hired by the counties to court positions on or before June 30, 2008 who became State employees on February 1, 2011 pursuant to 2010 Acts and Resolves No. 154 shall be deemed to have been first included in membership of the system on or before June 30, 2008. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1977, No. 153 (Adj. Sess.), § 2; 1981, No. 41, § 4; 1989, No. 277 (Adj. Sess.), § 17g, eff. Jan. 1, 1991; 1997, No. 89 (Adj. Sess.), § 3; 2011, No. 63, § H.7; 2017, No. 165 (Adj. Sess.), § 2; 2021, No. 114 (Adj. Sess.), § 3, eff. July 1, 2022.)

• § 458. Creditable service; military service

  (a) With respect to service rendered prior to the date of membership, each employee who, pursuant to subsection 457(a) of this title, became a member of the retirement system shall have included as prior service hereunder all service credited to him or her as creditable service under the terms of one or both of the predecessor systems, provided his or her membership continues unbroken until his or her retirement.

  (b) All service of a Group A, Group C, Group D, Group F, or Group G member since the member last became a member on account of which contributions are made shall be credited as membership service.

  (c) The Retirement Board shall fix and determine by appropriate rules and regulations how much service in any year is equivalent to one year of service, but in no case shall it allow credit for a period of absence without pay of more than a month’s duration, except as provided under subsection (e) of this section, nor shall more than one year of service be creditable for all service in one calendar year. Service rendered for the full normal working time in any year shall be equivalent to one year’s service, but in no case shall less than 40 calendar weeks be regarded as full normal working time.

  (d) Creditable service of a member shall consist of his or her membership service and the prior service, if any, which is credited to him or her under subsection (a) of this section, plus, in the case of a Group A member hired prior to July 1, 1978, three years and in the case of a Group F member, up to three years of the period served as a State employee prior to 1978 for which the member received no credit provided that the employee served continuously since 1978 until retirement. Creditable service shall also include service as an exempt employee for any period or periods of less than three years prior to 1978, whether or not continuous.

  (e) Credit shall also be granted for any period of absence from service certified by the commissioner of the member’s department, or if the office of the member is not overseen by a commissioner, then the head of the member’s department, due to any class of military service approved by the Retirement Board, provided the employee returns to the service of the State within 90 days after having become discharged or separated from such military service, as if such service had been service as an employee of the State. The earnable compensation of the employee at the time of entering such military service shall be deemed to be the earnable compensation for the period of such service.

  (f) Should an employee whose membership is broken again become a member, he or she shall enter the System as a member not entitled to credit for service previously rendered, except as provided in this section or section 463 of this title.

  (g) Any member may transfer from a position covered by one group to a position covered by a different group as defined in section 455 of this title and shall be entitled to credit for service rendered in all groups within the System. Benefits shall be based on the accrued value of the credits in the group in which the creditable service was earned and shall be payable according to the provisions of each group, unless the member elects to withdraw his or her contributions in accordance with section 480 of this title. Such benefits shall only be subject to such maximum amounts as are provided for each group and may be combined to exceed 50 percent of average final compensation.

  (h) Credit shall also be granted for any period of absence from service in connection with a leave of absence, approved by the commissioner of the member’s department, for professional study. If the office of the member is not overseen by a commissioner, then the head of the member’s department shall have the authority to approve a leave of absence for professional study. In the case of an approved leave of absence for purposes other than for professional study, service credit shall be granted upon a contribution by the member that equals the member’s current contribution rate multiplied by the member’s earnable compensation for the year preceding the leave of absence.

  (i) 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 period of 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. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1977, No. 153 (Adj. Sess.), § 3; 1981, No. 41, § 5; 1981, No. 108, § 330a; 1985, No. 39, § 1; 1989, No. 78, § 12; 1989, No. 277 (Adj. Sess.), § 17h, eff. Jan. 1, 1991; 1997, No. 68 (Adj. Sess.), § 9, eff. March 1, 1998; 1997, No. 89 (Adj. Sess.), § 4; 1999, No. 158 (Adj. Sess.), § 6; 2001, No. 29, § 1; 2007, No. 13, § 2; 2021, No. 114 (Adj. Sess.), § 4, eff. July 1, 2022.)

• § 459. Normal and early retirement

  (a) Normal retirement.

  (1) Group A, Group D, Group F, and Group G members. Any Group A, Group D, Group F, or Group G member who has reached the member’s normal retirement date may retire on a normal retirement allowance on the first day of any month after the member’s separation from service by filing an application in the manner outlined in subdivision (3) of this subsection.

  (2) Group C members. Any Group C member who is an officer or employee of the Department of Public Safety assigned to police and law enforcement duties, including the Commissioner of Public Safety appointed before July 1, 2000, and who has reached his or her normal retirement date may retire on a normal retirement allowance, on the first day of any month after the member may have separated from service, by filing an application in the manner outlined in subdivision (3) of this subsection. Any Group C member in service shall be retired on a normal retirement allowance on the first day of the calendar month next following attainment of 57 years of age. Notwithstanding, it is provided that any such member who is an official appointed for a term of years may remain in service until the end of the member’s term of office or any extension thereto, resulting from reappointment.

  (3) Where application for a retirement allowance is required, the member shall apply in writing to the Retirement Board not later than 90 days, or longer for cause shown, after the date upon which the retirement allowance is to begin.

  (4) [Repealed.]

  (b) Normal retirement allowance.

  (1) Upon normal retirement, a Group A member shall receive a normal retirement allowance that shall be equal to 50 percent of the member’s average final compensation; provided, however, that if the member has not completed 30 years of creditable service at retirement, or, if earlier, the date of attainment of such age as may be applicable under the provisions of subdivision (a)(4) of this section, the member’s allowance shall be multiplied by the ratio that the number of the member’s years of creditable service at retirement, or such earlier date, bears to 30.

  (2)(A) Upon normal retirement, a Group C member shall receive a normal retirement allowance that shall be equal to 50 percent of the member’s average final compensation; provided, however, that if the member has not completed 20 years of creditable service at retirement, or, if earlier, the date of attainment of such age as may be applicable under the provisions of subdivision (a)(4) of this section, the member’s allowance shall be multiplied by the ratio that the number of the member’s years of creditable service at retirement, or such earlier date, bears to 20.

  (B) For a Group C member, for each year of service that is completed on or after July 1, 2022 after attaining the later of 50 years of age or completing 20 years of service, a member’s maximum normal retirement allowance shall increase by an amount equal to one and one-half percent of the member’s average final compensation.

  (3)(A) Group D members, upon normal retirement, shall receive a normal retirement allowance equal to one and two-thirds percent of the member’s average final compensation times the years of Group D membership service up to 12 years. Group D members shall receive an additional retirement allowance according to years of service as a Supreme Court Justice, a Superior judge, an Environmental judge, a District judge, or a Probate judge, or any combination thereof, as follows:

  (i) After 12 years of service, an additional retirement allowance of an amount that, together with the normal service retirement allowance for the first 12 years, will make the total equal to two-fifths of their average final compensation.

  (ii) For each year of service in excess of 12 years, an amount equal to three and one-third percent of their average final compensation shall be added to the retirement allowance as computed in subdivision (i) of this subdivision (b)(3)(A). However, at no time shall the total retirement allowance exceed their salary at retirement. In addition to the normal retirement allowance, such additional retirement allowance shall be treated as the normal retirement allowance.

  (B) The total retirement allowance for Group D members shall be as follows:

  (i) For a Group D member who retires on or before June 30, 2022, the total retirement allowance shall not exceed the member’s salary at retirement.

  (ii) For a Group D member who, on or before June 30, 2022, has five years or more of service as a Supreme Court Justice, a Superior judge, an Environmental judge, a District judge, or a Probate judge, or any combination thereof, and has attained 57 years of age or older, or is a Group D member on or before June 30, 2022 and has 15 years or more of creditable service, the total retirement allowance shall not exceed the member’s salary at retirement.

  (iii) For a Group D member who retires on or after July 1, 2022, and who does not meet the requirements set forth in subdivision (i) or (ii) of this subdivision (B), the member’s total retirement allowance shall not exceed 80 percent of the member’s average final compensation.

  (C) [Repealed.]

  (4) [Repealed.]

  (5)(A) Until January 1, 1995, upon normal retirement, a Group F member shall receive a normal retirement allowance that shall be equal to 1 1/4 percent of his or her average final compensation times years of creditable service. On and after January 1, 1995, upon normal retirement, a Group F member shall receive a normal retirement allowance equal to 1 1/4 percent of the member’s average final compensation times years of membership service prior to January 1, 1991 plus a pension that when added to an annuity shall be equal to 1 2/3 percent of the member’s average final compensation times years of membership service on and after January 1, 1991. The maximum retirement allowance shall be 50 percent of average final compensation.

  (B) A Group F member first included in the membership of the system on or after July 1, 2008, upon normal retirement, shall receive a normal retirement allowance equal to 1 2/3 percent of the member’s average final compensation times years of membership service. The maximum retirement allowance shall be 60 percent of average final compensation.

  (6)(A) Upon normal retirement pursuant to subdivisions 455(a)(13)(E)(i), (iii), (iv), and (vi) of this chapter, a Group G member shall receive a normal retirement allowance equal to two and one-half of a percent of the member’s average final compensation times years of membership service in Group G. The maximum retirement allowance shall be 50 percent of average final compensation.

  (B) Upon normal retirement pursuant to subdivisions 455(a)(13)(E)(ii) and (v) of this chapter, a Group G member shall receive a normal retirement allowance equal to two and one-half of a percent of the member’s average final compensation times years of membership service in Group G. The maximum retirement allowance shall be 60 percent of average final compensation.

  (c) Early retirement.

  (1) Group A and Group D members. Any Group A or Group D member who has not reached his or her normal retirement date but who has completed 30 years of creditable service or who has attained age 55 and completed five years of such service, may retire on an early retirement allowance.

  (2) Group C members. Any Group C member who has not reached his or her normal retirement date but who has attained age 50 and completed 20 years of creditable service may retire on an early retirement allowance.

  (3) Group F members. Any Group F member who has not attained age 62 but who has attained age 55 and has completed five years, but less than 30 years, of creditable service may retire on an early retirement allowance.

  (4) Group G members. Any Group G member who has attained 55 years of age and has completed five years of creditable service may retire on an early retirement allowance.

  (d) Early retirement allowance.

  (1) Upon early retirement, a Group A member, except facility employees in the Department of Corrections, shall receive an early retirement allowance that shall be the actuarial equivalent of the normal retirement allowance computed under subsection (b) of this section, based on the average final compensation and years of creditable service at the date of early retirement. However, if a Group A member has completed 30 years of creditable service but has not reached normal retirement date, the early retirement allowance shall be equal to the normal retirement allowance computed under subsection (b) of this section. Group A members who have 20 years of service as facility employees in the Department of Corrections shall receive an early retirement allowance that shall be equal to the normal retirement allowance at age 55 without reduction.

  (2)(A) Upon early retirement, a Group F member, except facility employees of the Department of Corrections, Department of Corrections employees who provide direct security and treatment services to offenders under supervision in the community, and Woodside facility employees, shall receive an early retirement allowance that shall be equal to the normal retirement allowance reduced by one-half of one percent for each month the member is under age 62 at the time of early retirement. Group F members who have 20 years of service as facility employees of the Department of Corrections, as Department of Corrections employees who provide direct security and treatment services to offenders under supervision in the community, or as Woodside facility employees, or as Vermont State Hospital employees, or as employees of its successor in interest, who provide direct patient care shall receive an early retirement allowance that shall be equal to the normal retirement allowance at age 55 without reduction; provided the 20 years of service occurred in one or more of the following capacities as an employee of the Department of Corrections, Woodside facility, or the Vermont State Hospital, or its successor in interest: facility employee, community service center employee, or court and reparative service unit employee.

  (B) Upon early retirement, a Group F member first included in the membership of the system on or after July 1, 2008, except facility employees of the Department of Corrections and Department of Corrections employees who provide direct security and treatment services to offenders under supervision in the community, and Woodside facility employees, shall receive an early retirement allowance that shall be equal to the normal retirement allowance reduced by:

  (i) one-eighth of one percent for each month the member is under age 65, provided the member has accrued 35 years of service at the time of early retirement;

  (ii) one-quarter of one percent for each month the member is under age 65, provided the member has accrued 30 years of service but less than 35 years of service at the time of early retirement;

  (iii) one-third of one percent for each month the member is under age 65, provided the member has accrued 25 years of service but less than 30 years of service at the time of early retirement;

  (iv) five-twelfths of one percent for each month the member is under age 65, provided the member has accrued 20 years of service but less than 25 years of service at the time of early retirement;

  (v) five-ninths of one percent for each month the member is under age 65, provided the member has accrued less than 20 years of service at the time of early retirement.

  (3) Upon early retirement, a Group D member shall receive an early retirement allowance that shall be equal to the normal retirement allowance reduced by one-quarter of one percent for each month the member is under the member’s normal retirement date at the time of early retirement.

  (4)(A) Upon early retirement, a Group G member who was previously a Group F member first included in the membership of the System on or before June 30, 2008, and who elected to transfer into Group G pursuant to the terms set by the Board, shall receive an early retirement allowance that shall be equal to the normal retirement allowance reduced by the lesser of (i) one-half of one percent for each month equal to the difference between the 240 months and the member’s months of creditable service, or (ii) an amount that shall be the actuarial equivalent of the normal retirement allowance computed under subsection (b) of this section.

  (B) Upon early retirement, a Group G member who was previously a Group F member first included in the membership of the System on or after July 1, 2008, and who elected to transfer into Group G pursuant to the terms set by the Board, shall receive an early retirement allowance that shall be equal to the normal retirement allowance reduced by the lesser of (i) five-ninths of one percent for each month equal to the difference between the 240 months and the member’s months of creditable service, or

  (C) Upon early retirement, all Group G members other than those specified in subdivision (d)(4)(A) of this section shall receive an early retirement allowance that shall be equal to the normal retirement allowance reduced by an amount that shall be the actuarial equivalent of the normal retirement allowance computed under subsection (b) of this section.

  (5) Notwithstanding subdivisions (1) and (2) of this subsection, an employee of the Department of Fish and Wildlife assigned to law enforcement duties, an employee of the Military Department assigned to airport firefighting duties, or a Group C member shall, upon early retirement, receive an early retirement allowance that shall be equal to the normal retirement allowance computed under subsection (b) of this section.

  (6) Notwithstanding subdivisions (1) and (2) of this subsection, a State’s Attorney, the Defender General, or sheriff who has completed 20 years of creditable service, of which 15 years has been as a State’s Attorney, the Defender General, or sheriff, shall receive an early retirement allowance equal to the normal retirement allowance, at 55 years of age, without reductions.

  (e) Any member who retires before age 62 may, at any time prior to the date the first payment on account of his or her retirement allowance becomes normally due, elect to convert the retirement allowance otherwise payable after retirement into an increased retirement allowance that is its actuarial equivalent and is of such amount that, with his or her Social Security payment at age 62, the member will receive, so far as possible, the same amount each year before and after such Social Security payment commences.

  (f) Beginning July 1, 1989, the normal retirement allowance for Group A members shall be not less than the larger of $3,000.00 a year or 50 percent of his or her 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 March 1, 1998, the service retirement allowance shall be not less than the larger of $4,200.00 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. Beginning September 1, 2006, the service retirement allowance shall be not less than the larger of $6,600.00 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 September 1, 2011, and on September 1 of every fifth year thereafter, the minimum service retirement allowance shall be increased by $1,000.00. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1975, No. 196 (Adj. Sess.), § 16, eff. July 1, 1976, § 18, eff. March 27, 1976; 1977, No. 80, § 1; 1977, No. 153 (Adj. Sess.), §§ 4, 5, eff. March 28, 1978; 1981, No. 41, §§ 6-9; 1985, No. 156 (Adj. Sess.); 1987, No. 183 (Adj. Sess.), § 26a, eff. Jan. 1, 1989; 1989, No. 78, §§ 4, 6, 11; 1989, No. 169 (Adj. Sess.), §§ 13, 14; 1989, No. 277 (Adj. Sess.), §§ 17i-17l, eff. Jan. 1, 1991; 1991, No. 64, § 1, eff. June 18, 1991; 1991, No. 189 (Adj. Sess.), § 13, eff. May 19, 1992; 1997, No. 68 (Adj. Sess.), § 2, eff. March 1, 1998; 1997, No. 89 (Adj. Sess.), § 5; 1997, No. 152 (Adj. Sess.), § 8; 1999, No. 53, §§ 1, 2; 1999, No. 158 (Adj. Sess.), § 21; 2001, No. 57, § 2; 2001, No. 116 (Adj. Sess.), § 5a, eff. May 28, 2002; 2003, No. 115 (Adj. Sess.), § 2; 2005, No. 163 (Adj. Sess.), § 1; 2007, No. 47, § 14; 2007, No. 116 (Adj. Sess.), § 2; 2007, No. 146 (Adj. Sess.), § 1; 2011, No. 79 (Adj. Sess.), § 12, eff. April 4, 2012; 2013, No. 22, § 2; 2013, No. 49, § 1; 2015, No. 58, § E.203.3; 2021, No. 114 (Adj. Sess.), § 5, eff. July 1, 2022; 2023, No. 130 (Adj. Sess.), § 2, eff. July 1, 2024.)

• § 459a. Restoration of service

  (a) When a beneficiary resumes service, as defined in subdivision 455(a)(21) 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.

  (b)(1) Upon the subsequent retirement of an employee who once again became a member under subsection (a) of this section, the employee shall once again become a beneficiary whose former retirement allowance shall be restored under the same plan provisions applicable at the time of the initial retirement, but the beneficiary shall not be entitled to cost of living adjustments for the period during which the beneficiary 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 the beneficiary’s last restoration to service for which the member has made a contribution. If the beneficiary is not vested in the system since the beneficiary was last restored to service, the member’s contributions plus accumulated interest shall be returned to the beneficiary.

  (2) Notwithstanding subdivision (1) of this subsection, for a Group C member who has attained the later of 50 years of age and has completed 20 or more years of service, in no event shall the member’s separately computed retirement allowance increase by an amount equal to more than one and one-half percent of the member’s average final compensation per year of service actually performed during the period beginning with the member’s last restoration to service. (Added 2009, No. 24, § 1; amended 2021, No. 114 (Adj. Sess.), § 6, eff. July 1, 2022.)

• § 460. Ordinary disability retirement

  (a) Upon the application of a member or of the member’s department head not later than 90 days, or longer for cause shown, after the date the member may have separated from service, any Group A, Group C, Group D, Group F, or Group G member who has had five or more years of creditable service may be retired by the retirement board on an ordinary disability retirement allowance, not less than 30 nor more than 90 days after filing such application; provided the member is not eligible for accidental disability retirement; provided the member has requested application prior to death; and provided that the Medical Board, after a medical examination of such member, shall certify that the member is mentally or physically incapacitated for the further performance of duty, that such incapacity has existed since the time of the member’s separation from service and is likely to be permanent, and that he or she should be retired. The Retirement Board may consider, or may ask the Medical Board or a certified vocational rehabilitation counselor to consider whether the individual is disabled from performing other types of suitable work. However, if disability is denied because the individual is found to be suitable for other work, the member shall be advised at the time of denial of the following provisions that shall apply:

  (1) the individual will retain the individual’s existing retirement accrual status;

  (2) the State shall provide any necessary retraining;

  (3) there shall be no loss in pay;

  (4) involuntary geographical moves beyond normal commuting distance are not permitted; and

  (5) before any individual who is reassigned to another position rather than retired on disability may be terminated for performance reasons, the individual must first be reconsidered for disability retirement by the Retirement Board.

  (b)(1) Upon ordinary disability retirement, a Group A, Group D, Group F, or Group G member shall receive a normal retirement allowance 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 the member’s average final compensation at the time of the member’s disability retirement.

  (2) Employees who are not eligible for representation by the Vermont State Employees’ Association, including managerial, confidential, elected, and appointed officials, judicial, legislative, and exempt employees, who are employed on February 1, 1997, and whose application for the State’s long-term disability plan is denied solely because of a preexisting condition, shall, if they are otherwise eligible for ordinary disability retirement, be entitled to a retirement allowance that, when added to Social Security and/or other disability payments, equals 66 2/3 percent of the employee’s final average compensation at the time of the disability retirement.

  (c) Notwithstanding subsection (b) of this section, a Group C member, upon ordinary disability retirement, shall receive an additional allowance that will, when added to his or her Social Security benefit, be equal to 10 percent of his or her average final compensation for each dependent child, not in excess of three, who has not attained age 18 or, if a dependent student, has not attained age 23.

  (d) Notwithstanding subsection (b) or (c) of this section, a member may not receive more than 50 percent of his or her average final compensation at the time of his or her disability retirement. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1981, No. 41, § 10; 1989, No. 67, § 18; 1989, No. 277 (Adj. Sess.), § 17m, eff. Jan. 1, 1991; 1991, No. 64, § 2, eff. June 18, 1991; 1993, No. 33, § 4; 1997, No. 2, § 75, eff. Feb. 12, 1997; 1997, No. 89 (Adj. Sess.), § 6; 2003, No. 38, § 1; 2007, No. 13, § 3; 2021, No. 114 (Adj. Sess.), § 7, eff. July 1, 2022.)

• § 461. Accidental and occupationally related disability retirement

  (a) Upon the application of a member or of his or her department head not later than 90 days, or longer for cause shown, after the date the member may have separated from service, any member may be retired by the Retirement Board on an accidental disability retirement allowance, not less than 30 nor more than 90 days after filing such application; provided that the Retirement Board shall find on the basis of such evidence as may come before it, including a report by the Medical Board after a medical examination of such member, that the member is mentally or physically incapacitated for the further performance of duty as the natural and proximate result of an accident occurring at a definite time and place during the course of his or her performance of duty as an employee, that such accident was not the result of his or her gross negligence or willful misconduct, and provided that the Medical Board shall certify that such incapacity is likely to be permanent, and that the member should be retired. The Retirement Board may consult with a certified vocational rehabilitation counselor in determining whether the individual is incapacitated for the further performance of duty.

  (b) Upon accidental disability retirement a member shall receive a normal retirement allowance if he or she shall have reached his or her normal retirement date; otherwise such a member shall receive a retirement allowance which shall be equal to:

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

  (2) The ratio that the number of the member’s years of creditable service at disability bears to the number of years of such service the member would have completed had the member remained in service to his or her normal retirement date; provided, however, that such allowance shall not be less than 25 percent of the member’s average final compensation at the time of the member’s disability retirement.

  (c) Notwithstanding subsection (b) of this section, a group C member, upon accidental disability retirement, shall receive as a minimum an allowance which will, when added to the member’s Social Security benefit, be equal to 50 percent of the member’s average final compensation plus 10 percent of the member’s average final compensation for each dependent child, not in excess of three, who has not attained age 18 or, if a dependent student, has not attained age 23.

  (d) Notwithstanding subsection (b) or (c) of this section, a member may not receive more than 50 percent of his or her average final compensation at the time of his or her disability retirement. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 2003, No. 38, § 2; 2007, No. 13, § 4.)

• § 461a. Benefit denial; evidentiary hearing

  (a) An applicant for disability retirement benefits under section 460 or 461 of this title may file a request for an evidentiary hearing with the Retirement Board 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 section 809 of this title.

  (c) The decision of the hearing officer shall constitute final administrative action. (Added 2003, No. 38, § 5.)

• § 462. Reexamination of disability beneficiary

  (a) 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 Retirement Board may, and upon the member’s application shall, require any disability beneficiary who has not reached his or her normal retirement date to undergo a medical examination, by the 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, the beneficiary’s allowance may be discontinued until his or her withdrawal of such refusal, and should the beneficiary’s refusal continue for one year, all the beneficiary’s rights in and to his or her pension may be revoked by the Retirement Board.

  (b) Should the Medical Board report and certify to the Retirement Board that any disability beneficiary has a residual functional capacity that might enable the beneficiary to return to work, and should the Retirement Board 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 shall 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 on the same basis as for beneficiaries as provided in section 470 of this title provided that:

  (1) The Retirement Board 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 (b).

  (2) If the beneficiary has engaged in a gainful occupation subsequent to receiving disability retirement, the Retirement Board 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 Retirement Board’s determination is based in whole or in part on a vocational assessment of ability to engage in a gainful occupation, the beneficiary shall be notified of his or her entitlement to the same reemployment rights as are available to State employees under the existing collective bargaining agreement entered into between the State and the applicable bargaining representative, or extension of such contractual benefits. Such rights shall commence as of the date of the determination and shall be based upon the reemployment rights the beneficiary would have had at the time he or she retired from State service. The reduction of pension amount will be held in abeyance until the reemployment rights have expired. In the event that the beneficiary is subsequently reemployed by the State, the beneficiary’s retirement allowance shall cease, effective on the date when reemployment commences. In the event that the beneficiary is not subsequently reemployed by the State, the reduction of the beneficiary’s pension shall commence the month following the month in which the beneficiary’s reemployment rights expired.

  (3) In the event that a beneficiary’s pension has been reduced and should the beneficiary’s earning capability later change, his or her pension may be further modified; provided that no reemployment rights shall be afforded to the beneficiary in connection with any later change and provided further that the new pension amount, together with the amount earnable by him or her, shall not exceed the beneficiary’s average final compensation at retirement, adjusted for inflation.

  (4) As used in this subsection, “retirement allowance” shall mean the allowance payable without modification as provided in section 468 of this title.

  (c) Every recipient of disability benefits who has not reached his or her normal retirement date shall, annually on a date determined by the Retirement Board, file with the State Treasurer a statement certifying, under penalty of perjury and in such form as the Retirement Board 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, all the beneficiary’s rights in and to his or her pension and any pending reemployment rights under this section may be revoked by the Board. 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 as 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 (b) 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 Retirement Board shall provide the beneficiary with written notice and an opportunity to be heard. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 2003, No. 38, § 3; 2015, No. 18, § 11; 2015, No. 114 (Adj. Sess.), § 1; 2017, No. 165 (Adj. Sess.), § 3.)

• § 463. Reinstatement

  (a) Should a disability beneficiary be restored to service or should any other beneficiary be restored to service, his or her retirement allowance shall cease, and the beneficiary shall again become a member of the Retirement System. Anything in this subchapter to the contrary notwithstanding, upon his or her subsequent retirement, he or she shall be credited with all the service creditable to him or her at the time of his or her former retirement. However, if such beneficiary is restored to membership after the attainment of 55 years of age, his or her pension upon subsequent retirement shall not exceed the sum of the pension which he or she was receiving immediately prior to his or her last restoration to membership and the pension that may have accrued on account of membership service since his or her last restoration to membership, provided that the rate percent of his or her total pension on his or her subsequent retirement shall not exceed the rate he or she would have received had he or she remained in service during the period of prior retirement.

  (b) A member who has been reemployed is entitled to prior service credit upon depositing in the fund the contributions which would have been deducted from the member’s compensation had he or she remained a member with interest as set forth in subdivision 473(c)(1) of this title. The member in order to qualify for the prior service credit must also deposit in the fund a sum equal to the contributions which would have been contributed by the State had he or she remained a member with interest as set forth in subdivision 473(c)(1) of this title. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1981, No. 41, § 11; 1989, No. 277 (Adj. Sess.), § 17n, eff. Jan. 1, 1991; 2007, No. 13, § 5; 2015, No. 18, § 12.)

• § 464. Accidental and occupationally related death benefit

  (a) If the Retirement Board shall find on the basis of such evidence as may come before it that a Group A, Group D, Group F, or Group G member in service died prior to his or her retirement under the system as the natural and proximate result of an accident occurring at a definite time and place during the course of his or her performance of duty as an employee and that such accident was not the result of the member’s own gross negligence or willful misconduct, a retirement allowance shall be paid to the member’s designated dependent beneficiary during the member’s life.

  (b) If the Retirement Board shall find on the basis of such evidence as may come before it that a Group C member in service died prior to his or her retirement under the system as the natural and proximate result of an accident occurring at a definite time and place during the course of his or her performance of duty as an employee and that such accident was not the result of his or her own gross negligence or willful misconduct, a retirement allowance shall be paid to his or her dependent spouse during her or his life, or if there be no dependent spouse, or if the dependent spouse dies before the youngest child of the deceased member has attained age 18, age 23 in the case of a dependent student, then to his or her child or children under said age until the youngest of such children attains such age, divided in such manner as the Retirement Board in its discretion shall determine provided that the total annual payments to all such children shall not exceed the retirement allowance that would have been payable to the dependent spouse. If a member leaves no dependent spouse or child under said age upon his or her death, then a retirement allowance may be payable at the discretion of the Retirement Board to his or her dependent parent or parents provided that the total allowance payable shall not exceed the retirement allowance that would have been payable to the dependent spouse. In the case of the payment of a retirement allowance under this section to a child of a deceased Group C member who is a dependent student, the retirement allowance shall continue while such child remains a dependent student until he or she attains age 23.

  (c) The retirement allowance payable to the dependent spouse of a deceased member under this section shall be equal to 25 percent of the member’s average final compensation at the time of his or her death.

  (d) Notwithstanding subsection (c) of this section, a dependent spouse of a deceased Group C member under this section shall receive as a minimum an allowance that:

  (1) If his or her compensation from the State was not subject to Social Security withholding will; or

  (2) If his or her compensation from the State was subject to Social Security withholding will, when added to survivor’s insurance benefit, be equal to 35 percent of average final compensation plus 10 percent of average final compensation for each dependent child, not in excess of three, who has not attained age 18 or, if a dependent student, who has not attained age 23. Where, pursuant to this section, a retirement allowance is payable to a child or parent eligible for a survivor’s insurance benefit the allowance payable under this subsection shall be inclusive of such person’s survivor’s insurance benefit.

  (e) The retirement allowance payable to a dependent spouse under this section who also qualifies for an ordinary death benefit under section 465 of this title shall in no event be less than the death benefit that would otherwise be payable to such spouse under section 465 of this title. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1981, No. 41, § 12; 1985, No. 160 (Adj. Sess.), § 1; 1989, No. 277 (Adj. Sess.), § 17o, eff. Jan. 1, 1991; 1997, No. 89 (Adj. Sess.), § 7; 2003, No. 122 (Adj. Sess.), § 297a; 2021, No. 114 (Adj. Sess.), § 8, eff. July 1, 2022.)

• § 465. Termination of service; ordinary death benefit

  (a) Upon the withdrawal of a member from service prior to retirement for reasons other than death, the amount of his or her accumulated contributions will be returnable to him or her. In lieu of such return of contributions, any member who has completed five years of creditable service may allow his or her contributions to remain in the System and receive a deferred vested retirement allowance, commencing no earlier than the early retirement date, which shall be equal to:

  (1) an early or normal retirement allowance based on his or her average final compensation at his or her date of termination of service and the number of years of creditable service he or she would have completed had he or she remained in service to his or her normal retirement date; multiplied by

  (2) the ratio that the number of his or her years of creditable service at termination of service bears to the number of years of such service he or she would have completed had he or she remained in service to his or her normal retirement date, with early retirement reductions, if applicable.

  (b)(1) Upon the death of a member in service who has not reached his or her normal retirement date and who has not completed 10 years of creditable service, as a result of causes other than those specified in section 464 of this title, the member’s accumulated contributions shall be paid to such person as he or she shall have designated for such purpose in a writing 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 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, to the next of kin according to 14 V.S.A. § 551.

  (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 approved leave of absence for professional study 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, a pension equal to 10 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 the age of 18, or, if a dependent student, under the age of 23, not exceeding a total of three. However, if a surviving child of any age was mentally or physically incapacitated to the extent that the child is impeded from substantial gainful employment before attaining age 18, the pension will be payable for the duration of the child’s incapacity.

  (c) If a Group A, Group D, Group F, or Group G member dies in service after becoming eligible for early retirement or after completing 10 years of creditable service, a retirement allowance will be payable to the member’s designated dependent beneficiary during the member’s life. If the designated dependent beneficiary so elects, however, the return of the member’s accumulated contributions shall be made in lieu thereof.

  (d) If a Group C member dies in service after reaching his or her normal retirement date or after completing 10 years of creditable service, a retirement allowance will be payable to the member’s dependent spouse during her or his life, or if there be no dependent spouse, or if the dependent spouse dies before the youngest child of the deceased member has attained age 18, age 23 in the case of a dependent student, then to the member’s child or children under said age until the youngest of such children attains such age, divided in such manner as the Retirement Board in its discretion shall determine provided that the total annual payments to all such children shall not exceed the retirement allowance that would have been payable to the dependent spouse. If a member leaves no dependent spouse or child under such age upon his or her death, then a retirement allowance may be payable at the discretion of the Retirement Board to his or her dependent parent or parents provided that the total allowance payable shall not exceed the retirement allowance that would have been payable to the dependent spouse. In the case of the payment of a retirement allowance under this section to a child of a deceased Group C member who is a dependent student, the retirement allowance shall continue while such child remains a dependent student until he or she attains age 23.

  (e) Unless the designated dependent beneficiary elects to receive payment of a deceased member’s accumulated contributions as provided under subsection (c) of this section, the retirement allowance payable to the designated dependent beneficiary of a deceased Group A, Group D, or Group F member under this section shall be equal to the retirement allowance that would have been payable had the member elected option 3 and retired on the member’s date of death. In the case of a member who has not attained the normal retirement date as of his or her date of death, the retirement allowance shall be computed on the basis of a disability retirement allowance or an early retirement allowance, whichever provides the greater benefit to the dependent beneficiary. If the deceased member has no eligible dependent beneficiary, the member’s accumulated contributions shall be payable in accordance with the provisions of subsection (b) of this section.

  (f) The retirement allowance payable under this section to a dependent spouse of a Group C member who dies prior to normal retirement date shall be an allowance that will, when added to his or her survivor’s insurance benefit, be equal to 70 percent of the retirement allowance that would have been payable to the deceased member had he or she retired on a normal or early retirement allowance, as the case may be, but without actuarial equivalent modification, on the date of the member’s death plus 10 percent of his or her average final compensation for each dependent child of the deceased member, not in excess of three, who has not attained age 18 or, if a dependent student, has not attained age 23. Where, pursuant to this section, a retirement allowance is payable to a child or parent eligible for a survivor’s insurance benefit, the allowance payable under this subsection shall be inclusive of such person’s survivor’s insurance benefit.

  (g) The provisions of subsections (c), (d), (e), and (f), and subdivision (b)(1) of this section shall not apply if benefits are payable under section 464 of this title. The provisions of subdivision (b)(2) of this section shall not apply if the benefits are paid under subsection 464(d) of this title.

  (h) The provisions of subsections (e) and (g) of this section shall be retroactive to November 5, 1969 only for the account of George R. Dearborn, deceased.

  (i) Any reduced retirement allowance payable during the life of the retired member, with a provision that it shall continue after his or her death for the life of the member’s beneficiary, shall be determined as actuarial equivalents of the retirement allowance under subdivision (a)(1) of this section. Any member who elects to receive such a retirement allowance may elect to receive a benefit further reduced actuarially as prescribed by the Board with the added provision that, should the retired member survive his or her nominated beneficiary, the retirement allowance that would have been payable under subdivision (a)(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, he or she shall receive his or her retirement allowance under the provisions of subdivision (a)(1).

  (j) 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. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1975, No. 196 (Adj. Sess.), § 17; 1981, No. 41, §§ 13, 14; 1985, No. 160 (Adj. Sess.), § 2; 1989, No. 78, § 14; 1989, No. 277 (Adj. Sess.), § 17p, eff. Jan. 1, 1991; 1993, No. 33, § 1; 1997, No. 89 (Adj. Sess.), § 8; 1999, No. 53, § 3; 1999, No. 158 (Adj. Sess.), § 7; 2003, No. 122 (Adj. Sess.), §§ 297b, 297c; 2007, No. 13, § 6; 2007, No. 137 (Adj. Sess.), § 2; 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011; 2013, No. 22, § 3; 2015, No. 18, § 1; 2015, No. 114 (Adj. Sess.), § 2; 2021, No. 114 (Adj. Sess.), § 9, eff. July 1, 2022.)

• § 466. Coordination of disability retirement benefits with workers’ compensation benefits

  (a) Disability pension and annuity retirement benefits payable under this chapter shall not commence until workers’ compensation benefits have been exhausted under 21 V.S.A. § 642 or 646.

  (b) Notwithstanding subsection (a) of this section, disability retirement benefits payable under this chapter shall be paid to a member who applies for and meets all of the eligibility criteria for disability retirement under section 460 or 461 of this title, has filed a claim for temporary disability workers’ compensation benefits under 21 V.S.A. § 642 or 646, and for whom no such benefits have been or are being paid pursuant to any of these sections. If the disability retiree receives temporary workers’ compensation benefits pursuant to 21 V.S.A. § 642 or 646, disability retirement pension and annuity benefit payments shall cease immediately and the retiree shall be immediately restored to his or her employment position and status as existed immediately preceding separation from service as an employee, including restoration of all benefits that existed at that time. Acceptance of disability retirement benefits prior to being restored to State service shall not act as a waiver under subsection (d) of this section.

  (c) No employee shall concurrently receive both disability retirement benefits payable under this chapter and workers’ compensation benefits payable under section 21 V.S.A. § 642 or 646. If an employee receives disability retirement pension and annuity benefits and later receives an award for temporary disability workers’ compensation benefits for the same period, the Vermont State Retirement System shall have a lien against any retroactive workers’ compensation award under 21 V.S.A. § 642 or 646 for the same period that the employee received disability retirement benefits in the amount of the disability retirement pension and annuity benefits paid. Any recovery under 21 V.S.A. § 642 or 646 against the employer or the employer’s workers’ compensation insurance carrier shall, after deducting expenses of recovery, reimburse the Vermont State Retirement System for disability retirement pension and annuity benefits for all retroactive periods of time included in the recovery. The State Treasurer shall notify the Department of Buildings and General Services when a disability retirement application is approved for an employee who has filed a workers’ compensation claim. The Department of Buildings and General Services or its workers’ compensation insurance carrier shall notify the State Treasurer of commencement or termination of any workers’ compensation payments or awards to an employee who has been reported by the State Treasurer as eligible to receive disability retirement benefits.

  (d) An employee who chooses to accept disability retirement benefits payable under this chapter, except as otherwise described under this section and subsection (b) of this section, shall waive any claim for benefits in excess of 330 weeks under 21 V.S.A. §§ 644 and 645. Under this subsection, an employee may receive permanent disability benefits under 21 V.S.A. chapter 9 and disability retirement benefits under this chapter simultaneously for up to 330 weeks. Prior to actual payment of disability retirement benefits, the disability retiree shall make an election of what benefit he or she wants to receive after 330 weeks by indicating on a form provided by the State Treasurer at the time of application. The form shall advise the disability retiree in conspicuous print that he or she may wish to consult with legal counsel prior to making the election. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1981, No. 165 (Adj. Sess.), § 1; 1989, No. 78, § 16; 2005, No. 150 (Adj. Sess.), § 2.)

• § 467. Death benefit after retirement—Group C

  If a group C member in receipt of a retirement allowance dies, his or her dependent spouse shall receive until her or his death a retirement allowance which shall be equal to 70 percent of the retirement allowance to which the member was then entitled, without optional modification, irrespective of whether such member had elected an option hereunder. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1985, No. 160 (Adj. Sess.), § 3.)

• § 468. Optional benefits

  (a) Until the first payment on account of a retirement allowance becomes normally due, any member may elect to convert the retirement allowance otherwise payable to the member after retirement into a retirement allowance that is its actuarial equivalent, in accordance with one of the optional forms described in this section.

  (1) Option 1. 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 the member’s accumulated contributions at the time of retirement and the sum of the annuity payments actually made to the member during his or her lifetime shall be paid to such person, if any, as the member has nominated by written designation duly acknowledged and filed with the Retirement Board; or, in the absence of a written designation of beneficiary or when 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

  (2) [Deleted.]

  (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 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. § 551.

  (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; or

  (3) Option 3. A reduced retirement allowance payable during the member’s life, with the provision that it shall continue after the member’s death for the life of the beneficiary nominated by the member by written designation duly acknowledged and filed with the Retirement Board at the time of retirement should such beneficiary survive the member; or

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

  (b) Any member who elects to receive a retirement allowance under the provisions of option 3 or 4 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 the member’s nominated beneficiary, the retirement allowance which would have been payable during the member’s life computed pursuant to section 459, 460, or 461 of this title, whichever is applicable, shall be paid to the retired member during the remainder of the member’s 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 computed pursuant to section 459, 460, or 461 of this title, whichever is applicable. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1999, No. 53, § 4; 2007, No. 13, § 7; 2009, No. 24, § 2; 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011.)

• § 469. Minimum benefit—Group C

  Anything contained in this title to the contrary notwithstanding, the benefit payable to or on account of a group C member hereunder, inclusive of any benefit provided by his additional contributions as specified in subsection 473(b) of this title together with the Social Security benefit or survivor’s insurance benefit, as the case may be, shall not be less than the benefit which would have been payable to him or her or on his or her account under the provisions of the Vermont State Police and Motor Vehicle Inspectors’ Retirement System as in effect on June 30, 1972 had said System continued in effect unamended. (Added 1971, No. 231 (Adj. Sess.), § 4.)

• § 470. Postretirement adjustments to retirement allowances

  (a) Postretirement adjustments to retirement allowance. Beginning January 1, 2023 and each year thereafter, the retirement allowance of each beneficiary of the System who is in receipt of a retirement allowance 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.

  (1) Consumer Price Index; maximum and minimum amounts. Prior to October 1 of 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 said index for the month ending on June 30 of the previous year. Any increase or decrease in the Consumer Price Index shall be subject to adjustment so as to remain within the following maximum and minimum amounts:

  (A) For Group A members, the maximum amount of any increase or decrease used to determine the net percentage increase shall be five percent.

  (B) For Group C members who are first eligible for normal retirement or unreduced early retirement on or before June 30, 2022, or who are vested deferred members as of June 30, 2022, the maximum amount of any increase or decrease used to determine the net percentage increase shall be five percent.

  (C) For Group C members who are first eligible for normal retirement or unreduced early retirement on or after July 1, 2022, the maximum amount of any increase or decrease used to determine the net percentage increase shall be four percent.

  (D) For Group D members, the maximum amount of any increase or decrease used to determine the net percentage increase shall be five percent.

  (E) For Group F and Group G members who are first eligible for normal retirement or unreduced early retirement on or before June 30, 2022, or who are vested deferred members as of June 30, 2022, the maximum amount of any increase or decrease used to determine the net percentage increase shall be five percent. In the event that there is an increase or decrease of less than one percent, the net percentage increase shall be assigned a value of one percent and shall not be subject to further adjustment pursuant to subsection (d) of this section.

  (F) For Group F and Group G members who are first eligible for normal retirement or unreduced early retirement on or after July 1, 2022, the maximum amount of any increase or decrease used to determine the net percentage increase shall be four percent.

  (2) Consumer Price Index; decreases. In the event of a decrease in the Consumer Price Index, there shall be no adjustment to retirement allowances for the subsequent year beginning 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.

  (3) 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 (2) of this subsection, that amount shall be identified as the net percentage increase and used to determine the members’ postretirement adjustment as described herein.

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

  (1) Retired and vested deferred on or before June 30, 2022. For all members who are retired or vested deferred on or before June 30, 2022, other than those Group F members on an early retirement allowance who have not reached normal retirement age, as specified in subdivision (4) of this subsection, 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) In service on or before June 30, 2022. For all Group A, C, F, and G members who are first eligible for normal retirement or unreduced early retirement on or before June 30, 2022, and for Group D members first appointed or elected 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.

  (3) In service on or after July 1, 2022. For all Group A, C, F, and G members who are first eligible for normal retirement or unreduced early retirement on or after July 1, 2022, and for Group D members first appointed or elected 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.

  (4) Special rule for Group F and Group G early retirement. A Group F or Group G 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 has also met the other 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 in subsection (b) of this section for the following:

  (A) Group A and C members, provided that the net increase following the application of any offset as provided in this section equals or exceeds one percent;

  (B) Group D members first appointed or elected on or before June 30, 2022, provided that the net increase following the application of any offset as provided in this section equals or exceeds one percent; and

  (C) commencing January 1, 2014, any active contributing member of the Group F or Group G plan on or after June 30, 2008, and who retires as a Group F or Group G member on or after July 1, 2008;

  (2) one-half of the net percentage increase calculated in subsection (b) of this section for Group F members who retired on or before June 30, 2008;

  (3) for Group D members first appointed or elected on or after July 1, 2022, provided that the net increase following the application of any offset as provided in this section equals or exceeds one percent, the full amount of the net percentage increase calculated in subsection (b) of this section for amounts equal to or less than $75,000.00 of annual retirement allowance and one-half the net percentage increase calculated in subsection (b) of this section for amounts $75,000.01 or greater of annual retirement allowance.

  (e) Definition. For purposes of this section:

  (1) “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.

  (2) “Vested deferred” means a member who receives a vested deferred allowance payable pursuant to subsection 465(a) of this title.

  (f) Deferred vested allowance. No increase shall be made pursuant to this section in a deferred vested allowance payable pursuant to subsection 465(a) of this title prior to its commencement. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1981, No. 41, § 15; 1989, No. 277 (Adj. Sess.), § 17q; 1991, No. 64, § 3, eff. June 18, 1991; 1997, No. 89 (Adj. Sess.), § 9; 1999, No. 158 (Adj. Sess.), § 12; 2007, No. 116 (Adj. Sess.), § 3; 2009, No. 24, § 3; 2009, No. 139 (Adj. Sess.), §§ 2a, 13(b); 2011, No. 63, § H.1; 2013, No. 22, § 4; 2015, No. 114 (Adj. Sess.), § 3; 2021, No. 114 (Adj. Sess.), § 10, eff. July 1, 2022; 2023, No. 3, § 97, eff. March 20, 2023.)

• § 471. Retirement Board; Medical Board; actuary; rates of contribution; safekeeping of securities

  (a) The general administration and responsibility for the proper operation of the Retirement System and for making effective the provisions of this subchapter are hereby vested in a board of eight trustees, known as the Retirement Board. The Board shall consist of the Governor or his or her designated representative, the State Treasurer, the Commissioner of Human Resources, the Commissioner of Finance and Management, three members of the Vermont State Employees’ Association who are members of the System, each to be chosen by such Association in accordance with its articles of association and bylaws or policies for a term of two years, and one retired State employee who is a beneficiary of the System, to be elected by the Vermont Retired State Employees’ Association for a term of two years. If a vacancy occurs in the office of a chosen member, the vacancy shall be filled for the unexpired term in accordance with the articles of association and bylaws or policies of the association affected by the vacancy. In the absence of a member of the State Employees’ Association or the Retired State Employees’ Association, the respective association may designate a person who is a member of the Association to attend a meeting or meetings of the Retirement Board in place of the absent member. A person so designated shall have the same voting rights and responsibilities as the absent member he or she is representing at such meeting or meetings, except that the person shall not automatically assume the trustee’s place as an officer of the Board.

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

  (c) Each trustee shall be entitled to one vote in the Retirement Board. Five trustees shall constitute a quorum for the transaction of any business. A majority vote of those present and voting shall be necessary for any resolution or action by the Retirement Board at any meeting of the Board. All trustees shall be notified of any meeting of the Board. The State Treasurer, the Commissioner of Finance and Management, and the Commissioner of Human Resources each may designate in writing a person within the trustee’s office or department to attend a meeting or meetings of the Retirement Board in the Treasurer’s or the Commissioner’s place. The designation shall be filed with the Secretary of the Board. A person so designated shall have the same voting rights and responsibilities as the ex officio trustee at such meeting or meetings except that the designee shall not automatically assume the trustee’s place as an officer of the Board.

  (d) Subject to the limitations of this subchapter, the Retirement Board shall, from time to time, establish rules and regulations for the administration of the Fund of the Retirement System and for the transaction of its business.

  (e) The Retirement Board shall elect from its membership a chair and shall appoint a secretary who may be, but need not be, one of the trustees. It shall engage such medical, actuarial, and other services as shall be required to transact the business of the Retirement System. The compensation of all persons engaged by the Retirement Board, and all other expenses of the Board necessary for the operation of the Retirement System, shall be paid at such rates and in such amounts as the Board shall approve.

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

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

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

  (i) The Retirement Board shall designate a Medical Board to be composed of three physicians not eligible to participate in the Retirement System. If required, other physicians may be employed to report on special cases. The Medical Board shall arrange for and pass upon all medical examinations required under the provisions of this subchapter, shall investigate all essential medical statements and certificates by or on behalf of a member in connection with a claim of disability or accidental and occupationally-related death, and shall report in writing to the Retirement Board of its conclusions and recommendations upon all such matters.

  (j) The Retirement Board shall designate an actuary who shall be the technical advisor of the Board on matters regarding the operation of the Fund of the Retirement System, and shall perform such other duties as are required in connection therewith. Immediately after the establishment of the Retirement System, the Retirement Board shall adopt for the Retirement System such mortality and service tables as shall be deemed necessary and shall certify the rates of contribution payable under the provisions of this subchapter. 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 Retirement System, and taking into account the results of such investigation, the Retirement Board shall adopt for the Retirement 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 subchapter.

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

  (l) The Commission shall designate from time to time a depositary for the securities and evidences of indebtedness held in the Fund of the System and may contract for the safekeeping of securities and evidences of indebtedness within and without the State of Vermont in such banks, trust companies, and safe-deposit facilities as it shall from time to time determine. The necessary and incidental expenses of such safekeeping and for service rendered, including advisory services in investment matters, shall be paid from the operation expenses of the System as hereinafter provided. Any agreement for the safekeeping of securities or evidences of indebtedness shall provide for the access to such securities and evidences of indebtedness, except securities loaned pursuant to a securities lending agreement as authorized by subsection (m) of this section, at any time by the custodian or any authorized agent of the State for audit or other purposes.

  (m) The 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 U.S. 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 established by the prudent investor rule under 9 V.S.A. chapter 147.

  (n) 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 473 of this title. Based on this review, the Board shall recommend the amount of State contribution that should be appropriated for the next fiscal year to achieve and preserve the financial integrity of the fund. On or before November 1 of each year, the Board shall submit this recommendation to the Governor and the House Committees on Government Operations and Military Affairs and on Appropriations and the Senate Committees on Government Operations and on Appropriations. 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 1971, No. 231 (Adj. Sess.), § 4; amended 1987, No. 92, § 2, eff. June 23, 1987; 1991, No. 151 (Adj. Sess.), §§ 1, 2; 191, No. 265 (Adj. Sess.), § 1; 1995, No. 36, § 1; 1999, No. 158 (Adj. Sess.), § 23; 2001, No. 116 (Adj. Sess.), § 5b, eff. May 28, 2002; 2003, No. 38, § 4; 2003, No. 122 (Adj. Sess.), § 294g; 2003, No. 156 (Adj. Sess.), § 15; 2005, No. 48, § 1; No. 50, § 4; 2007, No. 13, § 8; 2013, No. 142 (Adj. Sess.), § 8; 2013, No. 161 (Adj. Sess.), § 72; 2021, No. 75, § 4, eff. June 8, 2021; 2021, No. 114 (Adj. Sess.), § 17, eff. July 1, 2022.)

• § 471a. Reports

  (a) The Board shall prepare and submit, consistent with 2 V.S.A. § 20(a), reports on the following subjects:

  (1) the fiscal transactions of the Retirement System, pursuant to subsection 471(g) of this title;

  (2) the results of an actuarial reevaluation of the Retirement Fund, pursuant to subsection 473a of this title.

  (b) Reports required to be submitted to the General Assembly annually by January 15 shall be consolidated in a single document. (Added 2003, No. 122 (Adj. Sess.), § 294f.)

• § 472. Investments; interest rate; disbursements

  (a) The members of the Vermont Pension Investment Commission established in chapter 17 of this title shall be the trustees of the Funds created by this subchapter, 16 V.S.A. chapter 55, and 24 V.S.A. chapter 125, and with respect to them may invest and reinvest the assets of the Fund, and hold, purchase, sell, assign, transfer, and dispose of the securities and investments in which the assets of the Fund have been invested and reinvested. Investments shall be made in accordance with the standard of care established by the prudent investor rule under 9 V.S.A. chapter 147.

  (b) From time to time, the Retirement Board shall set the rate or rates of regular interest at such percent rate compounded annually as shall be determined by the Board, such rate to be limited to a minimum of three percent and a maximum of five percent.

  (c) The State Treasurer shall be the custodian of the assets of the Fund of the Retirement System. All payments from the Fund shall be made by the State Treasurer or his or her deputy, with approval of the Retirement Board. A duly attested copy of a resolution of the Retirement Board designating such persons and bearing on its face specimen signatures of such persons shall be filed with the State Treasurer as his or her authority for making payments upon such vouchers.

  (d) Except as otherwise herein provided, no trustee and no employee of the Board or member of the 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 the 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 the Commission become an endorser or surety, or in any manner an obligor, for the monies loaned to or borrowed from the Board. The 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 or Commission. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1981, No. 41, § 16; 1985, No. 171 (Adj. Sess.), § 3, eff. May 7, 1986; 1987, No. 80, § 8, eff. June 9, 1987; 1997, No. 67 (Adj. Sess.), § 4; 2005, No. 50, § 5; 2007, No. 13, § 9; 2021, No. 75, § 5, eff. June 8, 2021.)

• § 472a. 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 the 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, 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 shall 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) 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 age 62, 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) Rules. The Board may adopt rules to ensure that this chapter complies with federal law requirements. (Added 2007, No. 13, § 10; amended 2009, No. 24, § 4; 2015, No. 18, § 2; 2017, No. 165 (Adj. Sess.), § 4; 2019, No. 14, § 3, eff. April 30, 2019.)

• § 473. Funds

  (a) Assets. All of the assets of the Retirement System shall be credited to the Vermont State Retirement Fund.

  (b) Member contributions.

  (1) Allocations and periodic review.

  (A) Allocations. Contributions deducted from the compensation of members together with any member contributions transferred thereto from the predecessor systems shall be accumulated in the Fund and separately recorded for each member. The amounts so transferred on account of Group A members shall be allocated between regular and additional contributions. The amounts so allocated as regular contributions shall be determined as if the rate of contribution of four percent has been continuously in effect in the predecessor system from which such amounts were transferred and the balance of any amount so transferred on account of any Group A member shall be deemed additional contributions. In the case of Group C members who were members as of the date of establishment and Group D members, all contributions transferred from predecessor systems shall be deemed regular contributions. Those members who, prior to the date of establishment of this system, had been contributing at a rate less than four percent shall have any benefit otherwise payable on their behalf actuarially reduced to reflect such prior contribution rate of less than four percent. Upon a member’s retirement or other withdrawal from service on the basis of which a retirement allowance is payable, the member’s additional contributions, with interest thereon, shall be paid as an additional allowance equal to an annuity that is the actuarial equivalent of such amount, in the same manner as the benefit otherwise payable under the System.

  (B) Periodic review. When the State Employees’ Retirement System has been determined by the actuary to have assets at least equal to its accrued liability, contribution rates will be reevaluated by the actuary with a subsequent recommendation to the General Assembly. In determining the amount earnable by a member in a payroll period, the Retirement Board may consider the annual or other periodic rate of earnable compensation payable to such member on the first day of the payroll period as continuing throughout such payroll period, and it may omit deduction from compensation for any period less than a full payroll period if an employee 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, on an annual basis, shall not exceed one-tenth of one percent of the annual earnable compensation upon the basis of which such deduction is to be made. Each of the amounts shall be deducted until the member retires or otherwise withdraws from service and when deducted shall be paid into the Annuity Savings Fund and shall be credited to the individual account of the member from whose compensation the deduction was made.

  (2) Groups A, C, D, F, and G members.

  (A) Group A members. Commencing on July 1, 2016, contributions shall be 6.55 percent of compensation for Group A members.

  (B) Group C members.

  (i) Commencing the first full pay period in fiscal year 2023, the contribution rate for Group C members shall be 8.93 percent of compensation.

  (ii) Commencing the first full pay period in fiscal year 2024, the contribution rate for Group C members shall be 9.43 percent of compensation.

  (iii) Commencing the first full pay period in fiscal year 2025 and annually thereafter, the contribution rate for Group C members shall be 9.93 percent of compensation.

  (C) Group D members. Commencing on July 1, 2022, the contribution rate for Group D members shall be based on the highest quartile in which a member’s hourly rate of pay falls. Quartiles shall be determined annually in the first full pay period of each fiscal year by the Department of Human Resources based on the hourly rate of pay by all Group D members. The contribution rates shall be based on the schedule set forth below:

  (i) Based on the quartiles for the first full pay period of each fiscal year and effective the first full pay period in that fiscal year, for members who have an hourly rate of pay in any pay period below the 25th percentile of Group D member hourly rates of pay, the contribution rate shall be 6.55 percent of compensation.

  (ii) Based on the quartiles for the first full pay period of each fiscal year and effective the first full pay period in that fiscal year, for members who have an hourly rate of pay in any pay period at the 25th percentile and below the 50th percentile of Group D member hourly rates of pay, the contribution rate shall be as follows:

  (I) commencing in fiscal year 2023, 7.05 percent of compensation;

  (II) commencing in fiscal year 2024, 7.55 percent of compensation; and

  (III) commencing in fiscal year 2025 and annually thereafter, 8.05 percent of compensation.

  (iii) Based on the quartiles for the first full pay period of each fiscal year and effective the first full pay period in that fiscal year, for members who have an hourly rate of pay in any pay period at the 50th percentile and below the 75th percentile of Group D member hourly rates of pay, the contribution rate shall be as follows:

  (I) commencing in fiscal year 2023, 7.05 percent of compensation;

  (II) commencing in fiscal year 2024, 7.55 percent of compensation;

  (III) commencing in fiscal year 2025, 8.05 percent of compensation; and

  (IV) commencing in fiscal year 2026 and annually thereafter, 8.55 percent of compensation.

  (iv) Based on the quartiles for the first full pay period of each fiscal year and effective the first full pay period in that fiscal year, for members who have an hourly rate of pay in any pay period at or above the 75th percentile of Group D member hourly rates of pay, the contribution rate shall be as follows:

  (I) commencing in fiscal year 2023, 7.05 percent of compensation;

  (II) commencing in fiscal year 2024, 7.55 percent of compensation;

  (III) commencing in fiscal year 2025, 8.05 percent of compensation;

  (IV) commencing in fiscal year 2026, 8.55 percent of compensation; and

  (V) commencing in fiscal year 2027 and annually thereafter, 9.05 percent of compensation.

  (D) Group F members. Commencing on July 1, 2022, the contribution rate for Group F members shall be based on the quartile in which a member’s hourly rate of pay falls. Quartiles shall be determined annually in the first full pay period of each fiscal year by the Department of Human Resources based on the combined hourly rate of pay of all Group F and Group G members. The contribution rates shall be based on the schedule set forth below:

  (i) Based on the quartiles for the first full pay period of each fiscal year and effective the first full pay period in that fiscal year, for members who have an hourly rate of pay in any pay period below the 25th percentile of Group F and Group G member hourly rates of pay, the contribution rate shall be 6.55 percent of compensation.

  (ii) Based on the quartiles for the first full pay period of each fiscal year and effective the first full pay period in that fiscal year, for members who have an hourly rate of pay in any pay period at the 25th percentile and below the 50th percentile of Group F and Group G member hourly rates of pay, the contribution rate shall be as follows:

  (I) commencing in fiscal year 2023, 7.05 percent of compensation;

  (II) commencing in fiscal year 2024, 7.55 percent of compensation; and

  (III) commencing in fiscal year 2025 and annually thereafter, 8.05 percent of compensation.

  (iii) Based on the quartiles for the first full pay period of each fiscal year and effective the first full pay period in that fiscal year, for members who have an hourly rate of pay in any pay period at the 50th percentile and below the 75th percentile of Group F and Group G member hourly rates of pay, the contribution rate shall be as follows:

  (I) commencing in fiscal year 2023, 7.05 percent of compensation;

  (II) commencing in fiscal year 2024, 7.55 percent of compensation;

  (III) commencing in fiscal year 2025, 8.05 percent of compensation; and

  (IV) commencing in fiscal year 2026 and annually thereafter, 8.55 percent of compensation.

  (iv) Based on the quartiles for the first full pay period of each fiscal year and effective the first full pay period in that fiscal year, for members who have an hourly rate of pay in any pay period at or above the 75th percentile of Group F and Group G member hourly rates of pay, the contribution rate shall be as follows:

  (I) commencing in fiscal year 2023, 7.05 percent of compensation;

  (II) commencing in fiscal year 2024, 7.55 percent of compensation;

  (III) commencing in fiscal year 2025, 8.05 percent of compensation;

  (IV) commencing in fiscal year 2026, 8.55 percent of compensation; and

  (V) commencing in fiscal year 2027 and annually thereafter, 9.05 percent of compensation.

  (E) Group G members. Commencing on July 1, 2023, the contribution rate for Group G members shall be based on the quartile in which a member’s hourly rate of pay falls. Quartiles shall be determined annually in the first full pay period of each fiscal year by the Department of Human Resources based on the combined hourly rate of pay of all Group F and Group G members. The contribution rates shall be based on the schedule set forth below:

  (i) Based on the quartiles for the first full pay period of each fiscal year and effective the first full pay period in that fiscal year, for members who have an hourly rate of pay in any pay period below the 25th percentile of Group F and Group G member hourly rates of pay, the contribution rate shall be 11.23 percent of compensation.

  (ii) Based on the quartiles for the first full pay period of each fiscal year and effective the first full pay period in that fiscal year, for members who have an hourly rate of pay in any pay period at the 25th percentile and below the 50th percentile of Group F and Group G member hourly rates of pay, the contribution rate shall be as follows:

  (I) commencing in fiscal year 2024, 12.23 percent of compensation; and

  (II) commencing in fiscal year 2025 and annually thereafter, 12.73 percent of compensation.

  (iii) Based on the quartiles for the first full pay period of each fiscal year and effective the first full pay period in that fiscal year, for members who have an hourly rate of pay in any pay period at the 50th percentile and below the 75th percentile of Group F and Group G member hourly rates of pay, the contribution rate shall be as follows:

  (I) commencing in fiscal year 2024, 12.23 percent of compensation;

  (II) commencing in fiscal year 2025, 12.73 percent of compensation; and

  (III) commencing in fiscal year 2026 and annually thereafter, 13.23 percent of compensation.

  (iv) Based on the quartiles for the first full pay period of each fiscal year and effective the first full pay period in that fiscal year, for members who have an hourly rate of pay in any pay period at or above the 75th percentile of Group F and Group G member hourly rates of pay, the contribution rate shall be as follows:

  (I) commencing in fiscal year 2024, 12.23 percent of compensation;

  (II) commencing in fiscal year 2025, 12.73 percent of compensation;

  (III) commencing in fiscal year 2026, 13.23 percent of compensation; and

  (IV) commencing in fiscal year 2027 and annually thereafter, 13.73 percent of compensation.

  (3) Deductions. The deductions provided for herein shall be made notwithstanding that the minimum compensation provided for by law for any member shall be reduced thereby. Every member shall be deemed to consent and agree to the deductions made and provided herein and shall receipt for full compensation, and payment of 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 subchapter.

  (4) Additional contributions. Subject to the approval of the Retirement Board, in addition to the contributions deducted from compensation as hereinbefore provided, any member may redeposit in the Fund by a single payment or by an increased rate of contribution an amount equal to the total amount that the member previously withdrew from this System or one of the predecessor systems; or any member may deposit therein by a single payment or by an increased rate of contribution an amount computed to be sufficient to purchase an additional annuity that, together with prospective retirement allowance, will provide for the member a total retirement allowance not in excess of one-half of average final compensation at normal retirement date, with the exception of Group D members for whom creditable service shall be restored upon redeposits of amounts previously withdrawn from the System, or for whom creditable service shall be granted upon deposit of amounts equal to what would have been paid if payment had been made during any period of service during which such a member did not contribute. Such additional amounts so deposited shall become a part of the member’s accumulated contributions as additional contributions.

  (5) Beneficiaries. The contributions of a member and such interest as may be allowed thereon that are withdrawn by the member or paid to the member estate or to a designated beneficiary in event of the member’s death shall be paid from the Fund.

  (6) Scope. Contributions required under this subsection shall be limited to contributions from Group A, Group C, Group D, Group F, and Group G members.

  (7) [Repealed.]

  (c) Employer contributions, earnings, and payments.

  (1) Employer contributions and the reserves for the payment of all pensions and other benefits, including all interest and dividends earned on the assets of the Retirement System shall be accumulated in the Fund, and all benefits payable under the System and the expenses of the System shall be paid from the Fund. Annually, the Retirement Board shall allow regular interest on the individual accounts of members in the Fund which shall be credited to each member’s account within the Fund.

  (2) Beginning with the actuarial valuation as of June 30, 2006, the contributions to be made to the 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 into the Fund by the State an amount equal to certain percentages of the annual earnable compensation of such member, to be known as the “normal contribution,” and additional amounts equal to a certain percentage of the member’s annual earnable compensation, to be known as the “basic accrued liability” and “additional accrued liability” contributions. The percentage rates of the contributions shall be fixed on the basis of the liabilities of the Retirement System as shown by actuarial valuation.

  (3) The normal contribution shall be the uniform percentage of the total compensation of members which, 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 benefits after subtracting the sum of the unfunded accrued liability and the total assets of the Fund of the Retirement System.

  (4) Beginning on July 1, 2008, until the unfunded accrued liability is liquidated, the basic 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, basic, unfunded accrued liability or additional 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)-(7) [Repealed.]

  (8) 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 when the Fund is calculated to have a funded ratio of less than 90 percent, the amount of $15,000,000.00.

  (d) Contributions of State. As provided by law, the Retirement Board shall certify to the Governor or Governor-Elect a statement of the percentage of the payroll of all members sufficient to pay for all operating expenses of the Vermont State Retirement System and all contributions of the State that will become due and payable during the next biennium. The contributions of the State to pay the annual actuarially determined employer contribution and any additional amounts pursuant to section (c)(8) of this section shall be charged to the departmental appropriation from which members’ salaries are paid and shall be included in each departmental budgetary request. Annually, on or before January 15, the Commissioner of Finance and Management shall provide to the General Assembly a breakdown of the components of the payroll charge applied to each department’s budget in the current fiscal year and anticipated to apply in the upcoming fiscal year. This report shall itemize the percentages of payroll assessments to fund:

  (1) the actuarially determined employer contribution to the Vermont State Retirement System;

  (2) any additional payments made pursuant to subdivision (c)(8) of this section to the Vermont State Retirement System; and

  (3) the employer contribution to the State Employees’ Postemployment Benefits Trust Fund made pursuant to 3 V.S.A. § 479a(e)(3).

  (e) [Repealed.]

  (f) Contributions paid by State. Notwithstanding the provisions of subdivision (b)(2) of this section to the contrary and pursuant to the provisions of Section 414(h) of the Internal Revenue Code, the State shall pick up and pay the contributions required to be paid by members with respect to service rendered on and after March 1, 1998. Contributions picked up by the State shall be designated for all purposes as member contributions, 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. 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 Fund. To ensure that the provisions of this subsection are cost neutral to the State, the contributions rates established under subdivision 473(b)(2) of this title shall be increased by one-tenth of one percent of compensation. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1981, No. 41, §§ 17-19, 39(1); 1989, No. 78, § 7; 1989, No. 277 (Adj. Sess.), §§ 17r, 17w(a), eff. Jan. 1, 1991; 1993, No. 33, § 5; 1997, No. 68 (Adj. Sess.), § 7, eff. March 1, 1998; 1997, No. 89 (Adj. Sess.), § 10; 1997, No. 89 (Adj. Sess.), § 13, eff. April 13, 1998; 1999, No. 158 (Adj. Sess.), § 19; 2003, No. 122 (Adj. Sess.), § 297h; 2005, No. 215 (Adj. Sess.), § 277a; 2007, No. 12, § 1; 2007, No. 13, § 11; 2007, No. 116 (Adj. Sess.), §§ 4, 5; 2009, No. 24, § 4a; 2011, No. 63, § H.4; 2015, No. 114 (Adj. Sess.), § 4; 2015, No. 172 (Adj. Sess.), § E.133.1; 2017, No. 74, § 2; 2021, No. 114 (Adj. Sess.), § 11, eff. July 1, 2022; 2023, No. 3, § 98, eff. March 20, 2023; 2023, No. 78, § E.107, eff. July 1, 2023; 2023, No. 85 (Adj. Sess.), § 2, eff. July 1, 2024.)

• § 473a. 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 473(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 reevaluation 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 473(b)(2) of this title. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this section. (Added 1997, No. 68 (Adj. Sess.), § 8, eff. March 1, 1998; amended 2013, No. 142 (Adj. Sess.), § 9.)

• § 474. Predecessor systems

  Any beneficiary of a predecessor system who is in receipt of a benefit on the date of establishment shall become a beneficiary hereunder and shall continue to receive the benefit being paid from the Fund of this System, under the conditions of the predecessor system as in effect at the time of the member’s retirement, subject to such adjustment as provided for in section 470 of this title. Any former member of a predecessor system who, upon termination of service, was eligible for a deferred benefit under the provisions of that System, the payment of which has not commenced as of the date of establishment, shall continue to be so eligible, and shall receive such benefit from the System subject to the conditions of the predecessor system as in effect at the time the member’s service was terminated. The cash and securities to the credit of the predecessor systems on the date of establishment shall be transferred to this Retirement System, the amount of each member’s accumulated contributions included in such transfer shall be credited to the member’s individual account in the fund to become a part of the member’s accumulated contributions, and the balance shall be credited to the Fund. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 2007, No. 13, § 12.)

• § 475. Errors

  Should any change or error in the records result in any member or beneficiary receiving from the Retirement System more or less than he or she would have been entitled to receive had the records been correct, the Retirement Board shall have the power to correct such error, and to adjust as far as practicable 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. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 2017, No. 165 (Adj. Sess.), § 5.)

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

  A member’s annuity, pension, or retirement allowance under this subchapter and the member’s assets in the Retirement System, shall not be exempt from taxation, including income tax, but shall be exempt 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 of any part of such assets to which the member is or may be entitled, or of any interest in such assets, shall be valid, except to the extent permitted by this subchapter. (Added 1971, No. 231 (Adj. Sess.). § 4; amended 1973, No. 117, § 12; 2007, No. 13, § 13.)

• § 476a. 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 Retirement 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 Retirement 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 Retirement 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 Retirement System by certified or registered mail, return receipt requested. In the event that there is more than one domestic relations order, the order which is most recent in time and which has been served on the Retirement System will control.

  (b) A member’s or beneficiary’s rights in the Retirement 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;

  (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;

  (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 Retirement 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, § 2; amended 2009, No. 154 (Adj. Sess.), § 238.)

• § 477. Prior service credit

  An employee who has ceased being a member upon reemployment is entitled to prior service credit upon depositing in the Fund the contributions which would have been deducted from the employee’s compensation had he or she remained a member with interest as set forth in section 473 of this title. The employee in order to qualify for the prior service credit must also deposit in the Fund a sum equal to the contributions which would have been contributed by the State had the employee remained a member with interest as set forth in section 473 of this title. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 2007, No. 13, § 14.)

• § 477a. Elections

  (a) Any member who has rendered 15 years of creditable 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 or 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 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 member who so elects shall deposit in the Fund by a single contribution the amount or amounts determined by the System’s actuary to be cost neutral to the System. Notwithstanding the provisions of this subsection, any 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 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 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. The provisions of this subsection shall also be available to State employees who are not members of the classified system and who elect to participate in the defined Contribution Retirement Plan under chapter 16A of this title. 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.

  (b) Any member who rendered service in the capacity of an employee for another state, as defined by the Board, may elect to have included in the member’s creditable service, all or part of any period of such service. Any member who so elects shall deposit in the Fund by a single contribution the amount or amounts determined by the System’s actuary to be cost neutral to the System.

  (c) Any member may elect to have included in the member’s creditable service, years of service as a municipal employee or as a teacher in a public or private school, as defined by the Board. Any member who so elects shall deposit in the Fund by a single contribution the amount or amounts determined by the System’s actuary to be cost neutral to the System. No application for credit under this subsection 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.

  (d) Any member may elect to have included in the member’s creditable service all or any part of the member’s service as a permanent State employee for which the member received no credit. Any member who so elects shall deposit in the Fund by a single contribution the amount or amounts determined by the System’s actuary to be cost neutral to the System. Any Group F member may elect to increase his or her retirement allowance for years of service as a Group E member prior to January 1, 1991, for 1-1/4 percent of average final compensation to 1-2/3 percent of average final compensation. A member making an election under this subdivision shall deposit in the Annuity Savings Fund by a single contribution an amount computed at regular interest to be sufficient to provide at normal retirement an annuity equal to 1-2/3 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. Any Group F member who is actively employed on June 30, 2007, and who was a member of the Group B plan prior to June 30, 1998, may elect to convert some or all of his or her Group B service to Group C service. A member making an election to convert shall deposit in the Fund by a single contribution an amount computed by the actuary to pay for the additional liability incurred by the increase in benefits between the Group B and the Group C plan multiplied by the number of years of service that the member elects to convert.

  (e) Notwithstanding any provision to the contrary and except for credit elected under subsection (a) of this section, a member may not elect more than a total of 10 years of creditable service under the provisions of this section, except that there shall be no limit to years of service in group E being converted under subsection (d) of this section.

  (f) Any time a member is required to make a single contribution in connection with an election under this section, a member may, with the approval of the Board, contribute over a maximum of five years in installments of equal value. 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 section 473 of this title. Any member who retires before completing payment as approved by the Board for the purchase of service under this section 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.

  (g) Notwithstanding any provision of this section, no non-Vermont state employment credit elected under this section shall be considered as creditable service for purposes of attaining five years’ vesting required for retirement allowance eligibility.

  (h) When a Group F member has a minimum of 25 years of creditable service, the member may elect to purchase up to five years of additional service credit. A member who makes an election under this subsection shall deposit in the fund by a single contribution an amount computed at regular interest to be sufficient to provide at normal retirement an annuity equal to 1-2/3 percent of the member’s average final compensation multiplied by the number of years purchased. (Added 1989, No. 169 (Adj. Sess.), § 15; 1989, No. 277 (Adj. Sess.), § 17s, eff. Jan. 1, 1991; amended 1991, No. 64, §§ 4, 5, eff. June 18, 1991; 1999, No. 53, §§ 4a, 4b; 1999, No. 158 (Adj. Sess.), §§ 2, 4; 2001, No. 29, § 2; 2005, No. 163 (Adj. Sess.), § 2; 2007, No. 12, § 1a; 2007, No. 13, § 15; 2015, No. 18, § 3; 2021, No. 114 (Adj. Sess.), § 12, eff. July 1, 2022.)

• § 478. Repealed. 1989, No. 277 (Adj. Sess.), § 17w(a), eff. Jan. 1, 1991.

• § 479. Group insurance

  (a)(1) As provided under section 631 of this title, a member who is insured by the respective group insurance plans immediately preceding the member’s effective date of retirement shall be entitled to continuation of group insurance as follows:

  (A)(i) coverage in the group medical benefit plan provided by the State of Vermont for active State employees; or

  (ii) for a Group F and Group G plan member first included in the membership of the system on or after July 1, 2008, coverage in the group medical benefit plan offered by the State of Vermont for active State employees and pursuant to the following, provided:

  (I) a member who has completed five years and less than 10 years of creditable service at the member’s retirement shall pay the full cost of the premium;

  (II) a member who has completed 10 years and less than 15 years of creditable service at the member’s retirement shall pay 60 percent of the cost of the premium;

  (III) a member who has completed 15 years and less than 20 years of creditable service at the member’s retirement shall pay 40 percent of the cost of the premium;

  (IV) a member who has completed 20 years or more of creditable service at the member’s retirement shall pay 20 percent of the cost of the premium; and

  (B) members who have completed 20 years of creditable service at their effective date of retirement shall be entitled to the continuation of life insurance in the amount of $10,000.00.

  (2) Notwithstanding any provision of subdivision (1)(A)(i) or (ii) of this subsection to the contrary, a member may be offered health coverage other than coverage in the group medical benefit plan provided by the State of Vermont for active State employees if the following conditions are met:

  (A) the alternative health coverage is substantially equivalent to the coverage offered through the group medical benefit plan provided by the State of Vermont for active State employees; and

  (B) the alternative health coverage is mutually agreeable to:

  (i) the State;

  (ii) each employee organization that has been certified to represent one or more bargaining units pursuant to chapters 27 and 28 of this title; and

  (iii) the Vermont Retired State Employees’ Association.

  (b) As of July 1, 2007, members of the Group C plan who separate from service prior to being eligible for retirement benefits under this chapter, who have at least 20 years of creditable service, and who participated in the group medical benefit plan at the time of separation from service shall have a one-time option at the time retirement benefits commence to participate in the group medical benefit plan provided by the State of Vermont for active State employees or any alternative health coverage provided pursuant to subdivision (a)(2) of this section. Premiums for the plan shall be prorated between the retired member and the Retirement System pursuant to section 631 of this title.

  (c) Premiums for coverage of retired members of the Group C plan and their dependents in the group medical benefit plan or any alternative health coverage provided pursuant to subdivision (a)(2) of this section shall be prorated on the same basis as is provided for active employees by the current collective bargaining agreement for the nonmanagement unit. The amounts designated as the State’s share of premium for the medical benefit plan and the total premium for group life insurance provided under subdivision (a)(2) of this section shall be paid by the Fund as an operating expense in accordance with subsection 473(d) of this title.

  (d) After January 1, 2007, the State Treasurer may offer and administer a dental benefit plan for retired members, beneficiaries, eligible dependents, and eligible retirees of special affiliated groups and the dependents of members of those groups who are eligible for coverage in the State Employee Group Medical Benefit Plan or any alternative health coverage provided pursuant to subdivision (a)(2) of this section. The Plan shall be separate and apart from any dental benefit plan offered to Vermont State employees. The original plan of benefits, and any changes thereto, shall be determined by the State Treasurer with due consideration of recommendations from the Retired Employees’ Committee on Insurance established in section 636 of this title.

  (1) For purposes of dental benefits, “retired members” shall include retired employees of the State who are receiving a retirement allowance from the Vermont State Retirement System. In addition, “retired members” shall include retired employees who are receiving a retirement allowance based upon their employment with the Vermont State Employees’ Association, the Vermont State Employees’ Credit Union, and the Vermont Council on the Arts, as long as they were covered under a group dental plan as active employees on their retirement date, and:

  (A) they have at least 20 years’ service with that employer; or

  (B) have attained 62 years of age, and have at least 15 years’ service with that employer.

  (2) One hundred percent of the premiums for providing dental benefit coverage to retired members, beneficiaries, and eligible dependents shall be paid in full by retired members and beneficiaries and shall be deducted from each member’s retirement allowance each month. Nothing in this subdivision creates a legal obligation on the part of the State to pay any portion of the premiums required to provide dental benefit coverage to retired members, dependents, beneficiaries, or other eligible participants.

  (3) Dependent eligibility shall be determined in the manner applied to determinations for coverage in the State Employee Medical Benefit Plan or any alternative health coverage provided pursuant to subdivision (a)(2) of this section.

  (4) [Repealed.]

  (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 Retirement System during the member’s life, with the provision that the 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 468 of this title, should such dependent beneficiary survive the member. The Retirement Board, after consultation with its actuary, shall establish reduced premium payment percentages that are as cost neutral to the Fund as possible.

  (f) [Repealed.]

  (g) A member of the Group F or Group G plan who is first included in the membership of the System on or after July 1, 2008, who separates from service prior to being eligible for retirement benefits under this chapter, who has at least 20 years of creditable service, and who participated in the group medical benefit plan at the time of separation from service shall have a one-time option at the time retirement benefits commence to reinstate the same level of coverage, in the group medical benefit plan provided by the State of Vermont for active State employees or any alternative health coverage provided pursuant to subdivision (a)(2) of this section, that existed at the date of separation from service. Premiums for the plan shall be prorated between the retired member and the Retirement System pursuant to subsection 479(a) of this title.

  (h) For purposes of entitlement to medical benefits in retirement, former county court employees hired by the counties to court positions on or before June 30, 2008 who became State employees on February 1, 2011 pursuant to 2010 Acts and Resolves No. 154 shall be deemed to have been first included in membership of the system on or before June 30, 2008. (Added 1981, No. 249 (Adj. Sess.), § 30b, eff. July 4, 1982; amended 2003, No. 156 (Adj. Sess.), § 13; 2005, No. 163 (Adj. Sess.), § 3; 2005, No. 165 (Adj. Sess.), § 2; 2007, No. 12, § 2; 2007, No. 13, § 15a; 2007, No. 116 (Adj. Sess.), § 6; 2011, No.1, § 1, eff. Feb. 2, 2011; 2013, No. 22, § 5; 2015, No. 18, § 4; 2017, No. 165 (Adj. Sess.), § 6; 2021, No. 114 (Adj. Sess.), § 13, eff. July 1, 2022; 2023, No. 78, § E.108, eff. July 1, 2023.)

• § 479a. State Employees’ Postemployment Benefits Trust Fund

  (a) Creation. A “State Employees’ Postemployment Benefits Trust Fund” (Benefits Fund) is hereby created for the purpose of accumulating and providing reserves to support retiree postemployment benefits for members, and to make distributions from the Benefits Fund for current and future postemployment benefits for retirees of the Vermont State Employees’ Retirement System, excluding pensions and benefits otherwise appropriated by statute and for the payment of reasonable and proper expenses of administering the Benefits Fund and related benefit plans. The Benefits Fund shall not be part of the Retirement System but is intended to comply with and be a tax-exempt governmental trust under Section 115 of the Internal Revenue Code of 1986, as amended.

  (b) Deposits into the Fund. Into the Benefits Fund shall be deposited:

  (1) all assets remitted to the State as a subsidy on behalf of the members of the Vermont State Employees’ Retirement System for employer-sponsored qualified prescription drug plans pursuant to the Medicare Prescription Drug Improvement and Modernization Act of 2003, except that any subsidy received from an Employer Group Waiver Program is not subject to this requirement;

  (2) any appropriations by the General Assembly for the purposes of paying current and future retiree postemployment benefits for members of the Vermont State Employees’ Retirement System;

  (3) amounts contributed or otherwise made available by members of the System or their beneficiaries for the purpose of paying current or future postemployment benefits costs; and

  (4) any monies pursuant to subsection (e) of this section.

  (c) Administration. The Benefits Fund shall be administered by the State Treasurer. 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 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. All balances in the Benefits Fund at the end of the fiscal year shall be carried forward. Interest earned shall remain in the Benefits Fund. 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.

  (d) Held in trust. All funds of the Benefits Fund shall be held in one or more trusts, custodial accounts treated as trusts, or a combination thereof. 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.

  (e) 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 the payroll assessment included in annual agency and department budgets:

  (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 contribution” 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 section 523 of this title.

  (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 health and medical 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. 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 and certify a statement of the percentage of the payroll of all members sufficient to fund the normal cost and the accrued liability contribution. On or before December 15 of each year, the Board shall inform the Governor and the House Committees on Government Operations and Military Affairs and on Appropriations and the 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 2005, No. 215 (Adj. Sess.), § 278; amended 2007, No. 13, § 16; 2009, No. 24, § 4b; 2013, No. 179 (Adj. Sess.), § E.133.1; 2019, No. 120 (Adj. Sess.), § A.12, eff. June 30, 2020; 2021, No. 114 (Adj. Sess.), § 15, eff. July 1, 2022; 2023, No. 6, § 1, eff. July 1, 2023.)

• § 480. Repealed. 2013, No. 22, § 17.

• § 480a. Group A members; limit on contributions

  Contributions in the form of a deduction from compensation under section 473 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 1 2/3 percent until the member retires. Any group A member in service on January 1, 1991 who, as of that date, has made contributions for more than 25 years but less than 30 years shall, upon normal retirement, be granted up to five years of additional creditable service at the rate of 1 2/3 percent for each year or part of a year in which contributions were made in excess of 25 years. Any group A member in service on January 1, 1991 who, as of that date, has made contributions for more than 30 years shall, upon normal retirement, receive credit for contributions in excess of 25 years and in addition shall be granted, upon normal retirement, five years of additional creditable service at the rate of 1 2/3 percent. (Added 1989, No. 277 (Adj. Sess.), § 17t, eff. Jan. 1, 1991.)

• § 480b. Repealed. 2013, No. 22, § 17.

• Subchapter 002: EMPLOYEES OF POLITICAL SUBDIVISIONS

• § 481. Definitions

  The following words and phrases as used in this subchapter, unless a different meaning is plainly required by the context, shall have the following meanings:

  (1) “Employee” shall mean any regular officer or employee who is employed for not less than 40 calendar weeks in a year, other than a person engaged under retainer or special agreement. In all cases of doubt, the Retirement Board shall determine whether any person is an employee as defined in this subchapter.

  (2) “National Guard employees” shall mean employees of the Vermont National Guard hired under 32 U.S.C. § 709.

  (3) “Employer” shall mean any political subdivision of the State of Vermont and the Vermont National Guard as to employees thereof hired under 32 U.S.C. § 709.

  (4) “Governing board” shall mean the governing body, by whatever name known, of such employer.

  (5) “Local retirement fund” shall mean any retirement, pension, or benefit fund partially or wholly maintained at the expense of an employer.

  (6) “Retirement Board” shall mean the Retirement Board of the State Retirement System. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1973, No. 251 (Adj. Sess.), § 1; 2013, No. 22, § 6.)

• § 482. Participation by local governments; election by employer

  (a) Any governing board of an employer which elected to have its eligible employees participate in the Vermont State Retirement System shall, by virtue of said election, have its eligible employees participate in the Vermont State Retirement System. Any members of the Vermont Employees’ Retirement System, in the employ of such employer, shall have the shares credited on their account to the various funds of that Retirement System transferred to the Fund of the Vermont State Retirement System, in accordance with the provisions of section 473 of this title. Thereafter, all contributions on behalf of such members shall be made by such employer and member to the Vermont State Retirement System for deposit in the Fund.

  (b) Membership of National Guard employees will commence effective the first day of the first pay period for which the federal government makes the required employer contribution, and will end on the failure of the federal government to make such contribution. Membership and benefits for this class of employee shall be a contributory money purchase type on such terms as are mutually agreed by the representatives of the federal government, national guard technicians of the State of Vermont and the trustees of the Vermont State Retirement System. The employee contribution shall be not less than the percentage contributed by the federal government.

  (c) All National Guard employees who became members of the Vermont Employees’ Retirement System pursuant to section 432 of this title and who, on the date of establishment, were members of that System shall become and continue to be members of the Vermont State Retirement System until the failure of the federal government to make contributions on their account. All shares credited to the Vermont Employees’ Retirement System on account of such National Guard employees shall be transferred to the fund of the Vermont State Retirement System, in accordance with the provisions of section 473 of this title. Thereafter all contributions on behalf of such members shall be made by the federal government and the member to the Vermont State Retirement System for deposit in the Fund. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1973, No. 251 (Adj. Sess.), § 2; 2007, No. 13, § 17.)

• § 483. Petition by employees; transfer of assets

  (a) Should a majority of the members of any local retirement fund elect to become members of the Vermont State Retirement System, by a petition duly signed by such members, the participation of such members in the Vermont State Retirement System may be effected as provided in section 482 of this title as though such local retirement fund were not in operation and the provisions of this section shall thereupon apply, except that the existing pensioners or annuitants of the local retirement fund who were being paid benefits on the date such participation in the Vermont State Retirement System becomes effective shall be continued and paid at their existing rates by the Vermont State Retirement System and the liability on this account shall be included in the computation of the accrued liability contribution rate as provided by section 487 of this title. Any cash and securities to the credit of the local retirement fund shall be transferred to the Vermont State Retirement System as of the date participation begins. The trustees or other administrative head of the local retirement fund as of the date participation becomes effective shall certify the proportion, if any, of the assets of the local retirement fund that represents the accumulated contributions of the members, and the relative shares of the members as of that date. Such shares shall be credited to the respective account of such members in the Fund of the Vermont State Retirement System as though contributed under the provisions of said System. The balance of the assets transferred to the Vermont State Retirement System shall be offset against the accrued liability before determining the special accrued liability contribution to be paid by the employer as provided by section 487 of this title. The operation of the local retirement fund shall be discontinued as of the date participation becomes effective.

  (b) Any members of a local retirement fund who, pursuant to the provisions of section 433 of this title, became members of said System shall become members of the Vermont State Retirement System and shall have the shares credited on their account to the Fund of the Vermont State Retirement System in accordance with the provisions of section 473 of this title. Thereafter all contributions on behalf of such members shall be made by such employer and member to the Vermont State Retirement System. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 2007, No. 13, § 18.)

• § 484. Election by employee; service credits

  Membership in the Vermont State Retirement System shall be optional with employees who are in the service of the employer on the date when participation becomes effective pursuant to subsection 482(a) or subsection 483(a) of this title and any such employee shall become a member as of that date or as of the date of completing three years of continuous service for the employer, if later, unless he or she files with the Retirement Board within 30 days of his or her eligibility a notice of his or her election not to be included in the membership. Any such employee who becomes a member of the Vermont State Retirement System within one year of the effective date of participation of his or her employer shall be credited with creditable service covering such periods of service prior to such effective date with such employer or predecessor employer for which the employer is willing to make accrued liability contributions. Thereafter service for such employer on account of which contributions are made by the employer and member shall also be considered as creditable service. (Added 1971, No. 231 (Adj. Sess.), § 4.)

• § 485. Compulsory membership

  Membership in the Vermont State Retirement System shall be compulsory for all employees entering the service of such employer after the date participation becomes effective, and shall be effective upon the date of hire. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 2013, No. 22, § 7.)

• § 486. Duty of local officers

  The chief fiscal officer of the employer, and heads of its departments, shall submit to the Retirement Board such information and shall cause to be performed with respect to the employees of such employer such duties as shall be prescribed by the Retirement Board in order to carry out the provisions of this subchapter. (Added 1971, No. 231 (Adj. Sess.), § 4.)

• § 487. Rates of contribution

  Employees who become members of the Vermont State Retirement System under the provisions of this subchapter shall contribute at the same rate and in the same manner as if they were employees of the State of Vermont. The actuary of the System shall compute the contributions which would be payable annually by the employer on behalf of such members corresponding to the contributions which the State of Vermont makes on behalf of State employees, except that each employer of members participating in the Vermont State Retirement System as provided in this subchapter shall make a special accrued liability contribution on account of the participation of its employees, which shall be determined by an actuarial valuation of the accrued liability on account of the employees of such employer who become members, in the same way as the accrued liability rate was originally determined for employees of the State of Vermont. This special accrued liability contribution, subject to such adjustment as may be necessary on account of any additional credits for service prior to the date of participation of its employees in the System awarded by such employer, shall be payable in lieu of the accrued liability contribution payable on account of other employees in the Vermont State Retirement System. The expense of making the valuation to determine any special accrued liability contribution shall be assessed against and paid by the employer on whose account it was necessary. Prior to the determination of the special accrued liability contribution the employer shall make accrued liability contributions at the accrued liability rate payable by the State of Vermont on behalf of State employees. (Added 1971, No. 231 (Adj. Sess.), § 4.)

• § 488. Payment of contributions

  The contributions computed under section 487 of this title together with a pro rata share of the cost of the administration of the Vermont State Retirement System based upon the payroll of the employees of the employer who are members shall be certified by the Retirement Board to the Chief Fiscal Officer of the employer. The amounts so certified shall be a charge against the employer. The Chief Fiscal Officer shall pay to the State Treasurer the amount certified by the Retirement Board as payable under the provisions of this subchapter, and the State Treasurer shall credit such amounts to the Fund of the Vermont State Retirement System. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 2007, No. 13, § 19.)

• § 489. Benefits

  Persons who become members of the Vermont State Retirement System under this subchapter and on behalf of whom contributions are paid as provided in this subchapter shall be entitled to benefits under the Vermont State Retirement System as though they were employees of the State of Vermont. These employees shall be considered “Group F members” as defined in subdivision 455(a)(11)(E) of this title, except that:

  (1) elected municipal employees shall not be subject to mandatory retirement requirements; and

  (2) sheriffs and those deputy sheriffs who meet the requirements pursuant to subdivision 455(a)(11)(F)(ii) of this chapter shall be considered members of Group G. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1977, No. 164 (Adj. Sess.), § 4, eff. March 31, 1978; 2013, No. 22, § 8; 2023, No. 130 (Adj. Sess.), § 3, eff. July 1, 2024.)

• § 490. Default; paid up deferred annuity

  The agreement of any employer to contribute on account of its employees shall be irrevocable, but should any employer for any reason become financially unable to make the contributions on account of its employees as provided in this subchapter, then such employer shall be deemed to be in default. All members of the Vermont State Retirement System who were employed by such employer at the time of default shall thereupon be entitled to discontinue membership in such Retirement System and to a refund of their previous contributions upon demand made within 90 days thereafter. As of a date 90 days following the date of such default, the actuary of the Vermont State Retirement System shall determine by actuarial valuation the amount of the reserve held on account of each remaining active member and beneficiary of such employer and shall credit to each such member and beneficiary the amount of the reserve so held. The reserve so credited, together with the amount of the accumulated contributions of each such active member, shall be used to provide for him or her a paid up deferred annuity beginning at age 65, and the reserve of each beneficiary shall be used in providing such part of his or her existing pension as the reserve so held will provide, which pension, together with his or her annuity, shall thereafter be payable to him or her. The rights and privileges of both active members and beneficiaries of such employer shall thereupon terminate, except as to payment of the deferred annuities so provided and the annuities and pensions, or parts thereof, provided for the beneficiaries. (Added 1971, No. 231 (Adj. Sess.), § 4.)

• § 491. Liability of retirement system

  Anything in this subchapter to the contrary notwithstanding, the Vermont State Retirement System shall not be liable for the payment of any pensions or other benefits on account of the employees or beneficiaries of any employer under this subchapter, for which reserves have not been previously created from funds contributed by such employer, or its employees, for such benefits. (Added 1971, No. 231 (Adj. Sess.), § 4.)

• Subchapter 003: TRANSFERS BETWEEN RETIREMENT SYSTEMS

• § 495. Transfer of memberships

  (a) The words “retirement system” as used in this section shall mean and include the following:

  (1) Vermont State Retirement System as established by subchapter 1 of this chapter, and including employees of certain political subdivisions under the provisions of subchapter 2 of this chapter;

  (2) State Teachers’ Retirement System of Vermont as established by 16 V.S.A. chapter 55; and

  (3) Municipal Employees’ Retirement System as established by 24 V.S.A. chapter 125.

  (b) Any person who is a member of a Retirement System as defined in subsection (a) of this section may transfer his or her membership to another Retirement System, as defined in subsection (a) of this section, within one year after acceptance of office or employment which makes it possible or mandatory for him or her to participate in such other Retirement System if such acceptance of office or employment would make it impossible for him or her to continue as a contributing member of the Retirement System of which he or she has been a member.

  (c) Any such person desiring so to transfer membership shall notify the board of trustees of the retirement system of which the person is a member and the board of trustees of the retirement system to which the person wishes to transfer of such intention and shall request a transfer of the total amount of the accumulated contributions standing to his or her credit in the fund of the system of which he or she is a member from said system to the retirement system to which he or she wishes to transfer his or her membership and shall request the deposit of such accumulated contributions in the fund of the system he or she intends to join. The amount to be transferred shall be the member’s compensation multiplied by the actual fiscal year employer contribution rate that was in effect for each year of creditable service being transferred, plus any amount of contributions made by the member, if any. Upon transfer of membership and funds in accordance with the provisions of this section he or she shall receive credit in the system to which he or she has transferred for all accrued benefit rights based on service rendered prior to such transfer for which he or she was entitled to credit in the system from which he or she transferred.

  (d) Upon becoming a member of the retirement system to which he or she has transferred, such person shall thereafter be eligible for such benefits or annuities as are provided by law in such retirement system, including the credits for previous service in the retirement system from which the person has transferred as provided in subsection (e) of this section. The average final compensation used to calculate the benefit payable at retirement shall be determined by using the earnable compensation which affords the highest consecutive years of earnings under either the system from which or to which he or she transferred. Except for the determination of the average final compensation as set forth in this subsection, the benefits for a member who transferred from one retirement system to another shall be calculated as follows:

  (1) a member who transfers after July 1, 2007, and before June 30, 2008, shall have the option to have the service from the first system calculated according to the provisions of either the first or the second system at the time of retirement;

  (2) a member who transfers on or before June 30, 2007, or on or after July 1, 2008, shall have his or her benefits calculated according to the provisions of the system or systems under which the benefits were accrued;

  (3) when benefits calculated according to the provisions of two or more retirement systems are combined under this subsection, they may exceed the maximum percentage of average final compensation established for each plan.

  (e) The Board of Trustees of the Vermont State Retirement System, the State Teachers’ Retirement System of Vermont and the Municipal Employees’ Retirement System are severally authorized to make such rules and regulations as may be necessary to carry out the provisions of this section.

  (f) Such provisions of subchapter 1 of this chapter, 16 V.S.A. chapter 55 and 24 V.S.A. chapter 125 as are inconsistent with the provisions hereof are hereby repealed to the extent of such inconsistency.

  (g) If any provision of this section, or the application thereof to any person or circumstance, is held invalid, such invalidity shall not affect other provisions or applications of this section, nor provisions or applications of the statutes to which this section is in addition which can be given effect without the invalid provision or application, and to this end the provisions of this section are declared to be severable. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1981, No. 41, § 21; 2007, No. 13, § 20; 2007, No. 137 (Adj. Sess.), § 3.)