§ 523. Vermont Pension Investment Commission; duties
(a) General. The Vermont Pension Investment Commission shall be responsible for the investment
of the assets of the Vermont State Teachers’ Retirement System, the Vermont State
Employees’ Retirement System, and the Vermont Municipal Employees’ Retirement System
pursuant to section 472 of this title, 16 V.S.A. § 1943, and 24 V.S.A. § 5063. The Commission shall strive to maximize total return on investment, within acceptable
levels of risk for public retirement systems, in accordance with the standards of
care established by the prudent investor rule under 14A V.S.A. § 902. The Commission may, in its discretion, subject to approval by the Attorney General,
also enter into agreements with municipalities administering their own retirement
systems to invest retirement funds for those municipal pension plans. The State Treasurer
shall serve as the custodian of the funds of all three retirement systems. The Commission
may, in its discretion, also enter into agreements with the State Treasurer to invest
the State Employees’ Postemployment Benefits Trust Fund, established in section 479a of this title, and the Retired Teachers’ Health and Medical Benefits Fund, established in 16 V.S.A. § 1944b.
(b) Powers and duties. The Commission shall have the following duties:
(1) Set the following actuarial assumptions:
(A) the investment rate of return;
(B) the inflation rate; and
(C) the smoothing rate method used for the actuarial valuation of assets and returns.
(2) Not more than 180 days after the end of each fiscal year, conduct an asset allocation
study that reviews the expected return of each fund, including a risk analysis using
best practices methodologies to estimate potential risks to the fund’s asset values
over a five-, 10-, and 20-year period and the remainder of the statutory amortization
period. The study shall be submitted to the House Committee on Government Operations
and Military Affairs and the Senate Committee on Government Operations and the Office
of the Governor and made publicly available within 10 days of completion.
(c) Recordkeeping. The Commission shall keep a record of all its proceedings, which shall be open for
public inspection.
(d) Policies. The Commission shall formulate policies and procedures deemed necessary and appropriate
to carry out its functions, including a written statement of the responsibilities
of and expectations for the Chair of the Commission and standards of conduct for members
and employees of the Commission in order to maintain and promote public confidence
in the integrity of the Commission. The standard of conduct policies shall prohibit
members 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 Commission.
(e) Contracts. Contracts approved by the Commission and related documents may be executed by the
Chair or, in the Chair’s absence, the Vice Chair.
(f) Asset and liability study. Beginning on July 1, 2023, and every three years thereafter, based on the most recent
actuarial valuations of each Plan, the Commission shall study the assets and liabilities
of each Plan over a 20-year period. The study shall:
(1) project the expected path of the key indicators of each Plan’s financial health based
on all current actuarial and investment assumptions; current contribution and benefit
policies, including the Plans’ mark-to-market funded ratio; actuarially required contributions
by source; payout ratio; and related liquidity obligations; and
(2) project the effect on each Plan’s financial health resulting from:
(A) possible material deviations from Plan assumptions in investment assumptions, including
returns versus those expected and embedded in the actuary’s estimate of actuarially
required contributions and any material changes in capital markets volatility; and
(B) possible material deviations from key plan actuarial assumptions, including retiree
longevity, potential benefit increases, and inflation.
(g) Changes to actuarial rate of return. Any changes to the actuarial rate of return shall be made by the Commission.
(h) Annual reports.
(1) Beginning on January 15, 2022, and every year thereafter, the Commission shall submit
to the House Committee on Government Operations and Military Affairs and the Senate
Committee on Government Operations:
(A) a report on the performance of each Plan versus its demographic investment and other
actuarial assumptions over a three-, five-, seven-, and 10-year period and the funding
ratio of each Plan to each Plan beneficiary at the end of each fiscal year; and
(B) a report on the status of the funding and investment performance of each Plan and
any relevant information from the asset liability and scenario testing completed during
the prior fiscal year.
(2) The Commission shall send to each participant or beneficiary of each Plan a written
or electronic copy of the report described in subdivision (1) of this subsection,
in the format authorized by the participant or beneficiary. The report shall be consolidated
with any other reports required to be sent by the Commission to the participants or
beneficiaries of each Plan. (Added 2005, No. 50, § 2; amended 2005, No. 215 (Adj. Sess.), § 277b; 2007, No. 100 (Adj. Sess.), § 3; 2007, No. 176 (Adj. Sess.), § 18, May 28, 2008; 2009, No. 139 (Adj. Sess.), § 4; 2019, No. 120 (Adj. Sess.), § A.13, eff. June 30, 2020; 2021, No. 75, § 1, eff. June 8, 2021; 2021, No. 114 (Adj. Sess.), § 16, eff. July 1, 2022.)