§ 1944. Vermont Teachers’ Retirement Fund
(a) Pension Fund. All of the assets of the System shall be credited to the Vermont Teachers’ Retirement
Fund.
(b) Member contributions.
(1) Contributions deducted from the compensation of members shall be accumulated in the
Pension Fund and separately recorded for each member.
(2) The proper authority or officer responsible for making up each employer payroll shall
cause to be deducted from the compensation:
(A) Of each Group A member, five and one-half percent of the member’s total earnable compensation,
including compensation paid for absence as provided by subsection 1933(d) of this title.
(B) Of each Group C member, the following shall apply:
(i) Beginning on July 1, 2022, a Group C member shall have the rate set forth in this
subdivision (b)(2)(B)(i) applied to the member’s total earnable compensation for the
fiscal year, which shall include compensation paid for absence as provided by subsection 1933(d) of this title, and any additional stipends identified as of July 1. A member’s rate shall not be
adjusted during the fiscal year. For a member who works a part-time equivalency status,
the rate shall apply to the member’s total earnable compensation and not to an amount
equal to an annualized base salary. If a member is employed on a part-time equivalency
status with two or more employers, the highest rate shall be applied to the amounts
deducted from each employer. A member’s rate shall be calculated according to the
following rates and income brackets:
(I) If a member’s base salary is at or below $40,000.00, the rate is 6.0 percent.
(II) If a member’s base salary is $40,000.01 or more but not more than $50,000.00, the
rate is 6.05 percent.
(III) If a member’s base salary is $50,000.01 or more but not more than $60,000.00, the
rate is 6.10 percent.
(IV) If a member’s base salary is $60,000.01 or more but not more than $70,000.00, the
rate is 6.20 percent.
(V) If a member’s base salary is $70,000.01 or more but not more than $80,000.00, the
rate is 6.25 percent.
(VI) If a member’s base salary is $80,000.01 or more but not more than $90,000.00, the
rate is 6.35 percent.
(VII) If a member’s base salary is $90,000.01 or more but not more than $100,000.00, the
rate is 6.50 percent.
(VIII) If a member’s base salary is $100,000.01 or more, the rate is 6.65 percent.
(ii) Beginning on July 1, 2023, a Group C member shall have the rate set forth in this
subdivision (b)(2)(B)(ii) applied to the member’s total earnable compensation for
the fiscal year, which shall include compensation paid for absence as provided by
subsection 1933(d) of this title, and any additional stipends identified as of July 1. A member’s rate shall not be
adjusted during the fiscal year unless the member’s full-time equivalency status changes,
which shall require that the member’s rate be recalculated and the new rate applied
for the remainder of that fiscal year. For a member who works a part-time equivalency
status, the rate shall apply to the member’s total earnable compensation and not to
an amount equal to an annualized base salary. If a member is employed on a part-time
equivalency status with two or more employers, the highest rate shall be applied to
the amounts deducted from each employer. A member’s rate shall be calculated according
to the following rates and income brackets:
(I) If a member’s base salary is at or below $40,000.00, the rate is 6.10 percent.
(II) If a member’s base salary is $40,000.01 or more but not more than $50,000.00, the
rate is 6.15 percent.
(III) If a member’s base salary is $50,000.01 or more but not more than $60,000.00, the
rate is 6.25 percent.
(IV) If a member’s base salary is $60,000.01 or more but not more than $70,000.00, the
rate is 6.35 percent.
(V) If a member’s base salary is $70,000.01 or more but not more than $80,000.00, the
rate is 6.50 percent.
(VI) If a member’s base salary is $80,000.01 or more but not more than $90,000.00, the
rate is 6.75 percent.
(VII) If a member’s base salary is $90,000.01 or more but not more than $100,000.00, the
rate is 7.0 percent.
(VIII) If a member’s base salary is $100,000.01 or more, the rate is 7.25 percent.
(iii) Beginning on July 1, 2024, a Group C member shall have the rate set forth in this
subdivision (b)(2)(B)(iii) applied to the member’s total earnable compensation for
the fiscal year, which shall include compensation paid for absence as provided by
subsection 1933(d) of this title, and any additional stipends identified as of July 1. A member’s rate shall not be
adjusted during the fiscal year unless the member’s full-time equivalency status changes,
which shall require that the member’s rate be recalculated and the new rate applied
for the remainder of that fiscal year. For a member who works a part-time equivalency
status, the rate shall apply to the member’s total earnable compensation and not to
an amount equal to an annualized base salary. If a member is employed on a part-time
equivalency status with two or more employers, the highest rate shall be applied to
the amounts deducted from each employer. A member’s rate shall be calculated according
to the following rates and income brackets:
(I) if a member’s base salary is at or below $40,000.00, the rate is 6.15 percent;
(II) if a member’s base salary is $40,000.01 or more but not more than $50,000.00, the
rate is 6.20 percent;
(III) if a member’s base salary is $50,000.01 or more but not more than $60,000.00, the
rate is 6.30 percent;
(IV) if a member’s base salary is $60,000.01 or more but not more than $70,000.00, the
rate is 6.40 percent;
(V) if a member’s base salary is $70,000.01 or more but not more than $80,000.00, the
rate is 6.55 percent.
(VI) If a member’s base salary is $80,000.01 or more but not more than $90,000.00, the
rate is 6.80 percent.
(VII) If a member’s base salary is $90,000.01 or more but not more than $100,000.00, the
rate is 7.10 percent.
(VIII) If a member’s base salary is $100,000.01 or more, the rate is 7.35 percent.
(C) In determining the amount earnable by a member set forth in this subdivision (2) in
a payroll period, the Board may consider the rate of compensation payable to such
member on the first day of a payroll period as continuing throughout the payroll period,
and it may omit deduction from compensation for any period less than a full payroll
period if a teacher was not a member on the first day of the payroll period, and to
facilitate the making of deductions it may modify the deduction required of any member
by such an amount as shall not exceed one-tenth of one percent of the annual earnable
compensation upon the basis of which such deduction is made. The actuary shall make
annual valuations of the reduction to the recommended State contribution attributable
to the increase from five to six percent, and the Board shall include the amount of
this reduction in its written report pursuant to subsection 1942(r) of this title.
(3) The deductions provided for in this section shall be made notwithstanding that the
minimum compensation provided for by law for any member shall be reduced thereby.
Every Group A and Group C member shall be deemed to consent and agree to the deductions
made and provided for in this section, and shall receipt for the member’s full salary
or compensation, and payment of salary or compensation less such deduction shall be
a full and complete discharge and acquittance of all claims and demands whatsoever
for the services rendered by such person during the period covered by such payment,
except as to the benefits provided under this chapter.
(4) The proper authority or officer responsible for making up each employer payroll shall
certify to the Board the amounts deducted on each and every payroll, and each of such
amounts shall be paid into the Pension Fund and credited to the individual account
of the member from whose compensation the deduction was made.
(A) All employer reports and corresponding member contributions required by this subdivision
(4) shall be provided by the due date established by the Board. Employers providing
reports or remitting contributions, which are more than 30 days delinquent, may be
assessed a delinquent reporting fee of one percent of the amount that should have
been reported and remitted for each month, or prorated portion of a month, that the
report or contributions are delinquent.
(B) All employers shall provide accurate reports. Employers providing inaccurate reports
shall be responsible for correcting any deficiencies and shall reimburse the System
for any costs incurred by the System as a result of inaccuracy.
(C) In the event that an employer willfully files an inaccurate report, in addition to
any other penalties provided by law, the employer shall pay the System an administrative
penalty of up to 50 percent of the amount that was not accurately reported.
(D) The System may enforce the provisions of this subdivision (4) in Washington Superior
Court.
(E) The Board may, in its discretion, waive part or all of a penalty assessment for good
cause shown.
(5) [Repealed.]
(6) Any Group A member who has rendered service outside the State in the capacity of a
teacher and as approved by the Board, or who was a teacher in Vermont on July 1, 1947
and elected not to join the System but who has subsequently joined, may:
(A) Elect to have included in the member’s creditable service all or part of any period
of service outside the State. Any Group A member who so elects shall deposit in the
Pension Fund by a single contribution an amount computed at regular interest to be
sufficient to provide at age 60 an annuity equal to one-120th of the member’s average
final compensation multiplied by the number of years of service rendered outside the
State for which the member elects to receive credit. No application may be accepted
for the purchase of credit for service outside the State, however, if at the time
of application the member has a vested right to retirement benefits in another retirement
system based upon that service.
(B) Elect to have included in the member’s creditable service all or part of any service
with which the member was credited immediately prior to any refund of the member’s
accumulated contributions, including prior service, as defined in section 1931 of this title, which shall be restored upon full restoration of previous membership service as
provided in this section. Any Group A member who so elects shall deposit in the Pension
Fund by a single contribution an amount equal to the amount of accumulated contributions
previously withdrawn together with regular interest thereon from the date of the refund
to the date of repayment, or a proportionate part of that amount if less than the
full period of previous service is to be included in the member’s creditable service.
If a member has received a refund of the member’s accumulated contributions more than
once, the member may elect the period or periods of previous service on account of
which the member will make contributions under this subdivision (b)(6) subject to
this limitation. Any Group A member who elects to repay any amount previously refunded
shall continue thereafter to contribute to the System the proportion of earnable compensation
determined on the basis of the member’s age on the date on which the member shall
have last become a member.
(C) Elect to have included in the member’s creditable service those years of teaching
in Vermont rendered between July 1, 1947 and July 1, 1972 for which no contributions
to the System have been made. Any Group A member who so elects shall deposit in the
Pension Fund by a single contribution an amount computed at regular interest to be
sufficient to provide at age 60 an annuity equal to one-120th of the member’s average
final compensation multiplied by the number of years of service for which the member
elects to receive credit.
(7) The contributions of a member, and such interest as may be allowed thereon, paid upon
the member’s death or withdrawn by the member as provided in this chapter, shall be
paid from the Pension Fund.
(8) Any Group A or Group C member who has rendered 15 years of creditable teaching service
and who has, prior to becoming a member of the System, served a minimum of one full
year of full-time service in the military, one full year of full-time service as a
member of the Cadet Nurse Corps in World War II, the Peace Corps, VISTA, or AmeriCorps
for which the member has derived no military or other pension benefits, may elect
to have included in the member’s creditable service all or any part of the member’s
military, Cadet Nurse Corps, Peace Corps, VISTA, or AmeriCorps service not exceeding
five years. Any Group A member who elects credit under this subdivision shall deposit
in the Pension Fund by a single contribution an amount computed at regular interest
to be sufficient to provide at age 60 an annuity equal to one-120th of the member’s
average final compensation multiplied by the number of years of the service rendered
for which the member elects to receive credit. Any Group A member who elects credit
for service in the Cadet Nurse Corps under this subdivision and any Group C member
who elects credit under this subdivision shall deposit in the Pension Fund by a single
contribution an amount computed at regular interest to be sufficient to provide at
normal retirement an annuity equal to one and two-thirds or two percent, whichever
is applicable pursuant to section 1937 of this title, of the member’s average final compensation multiplied by the number of years of
the service for which the member elects to receive credit. Notwithstanding the provisions
of this subdivision, any Group C member who was a Group B member and any Group A member
shall, upon application, be granted up to three years of credit for military service
during the periods June 25, 1950 through January 31, 1955, February 28, 1961 through
August 4, 1964 if service was performed while in what is now the Republic of Vietnam,
and August 5, 1964 through May 7, 1975 and shall not be required to make a contribution,
provided the member has rendered 15 years of creditable teaching service and prior
to becoming a member served a minimum of one full year of full-time service in the
military for which he or she has derived no military pension benefits. Notwithstanding
the foregoing, in the event of a conflict between the provisions of this subsection
and the provisions of 10 U.S.C. § 12736 concerning the counting of the same full-time military service toward both military
and State pensions, the provisions of the U.S. Code shall control.
(9) Contributions required under this subsection shall be limited to contributions from
Group A and Group C members.
(10) [Repealed.]
(11) Any Group A or Group C member who rendered service in the capacity of a teacher, as
defined by the Board, in an approved public or independent school that was not a part
of the System may elect to have included in the member’s creditable service all or
part of any period of service in such approved school. Any member who so elects shall
deposit in the Pension Fund by a single contribution an amount computed at regular
interest to be sufficient to provide at normal retirement an annuity equal to one
and two-thirds or two percent, whichever is applicable pursuant to section 1937 of this title, of the member’s average compensation multiplied by the number of years of service
for which the member elects to receive credit. No application for credit under this
subdivision shall be granted if at the time of application, the member has a vested
right to retirement benefits in another retirement system based upon that service.
(12) Any Group A or Group C member may elect to have included in the member’s creditable
service years of service during which the member exercised his or her option not to
be a member of the System. Any member who so elects shall deposit in the Pension Fund
by a single contribution an amount computed at regular interest to be sufficient to
provide at normal retirement an annuity equal to one and two-thirds or two percent,
whichever is applicable pursuant to section 1937 of this title, of the member’s average compensation multiplied by the number of years of service
for which the member elects to receive credit.
(13) Any Group A or Group C member may elect to have included in the member’s creditable
service all or any part of the member’s service in the capacity of a teacher in a
school that was a part of the System for which the member has no credit. Any member
who so elects shall deposit in the Pension Fund by a single contribution an amount
computed at regular interest to be sufficient to provide at normal retirement an annuity
equal to one and two-thirds or two percent, whichever is applicable pursuant to section 1937 of this title, of the member’s average final compensation multiplied by the number of years of
the service for which the member elects to receive credit.
(14) Any Group C member may elect to increase his or her retirement allowance for years
of service as a Group B member prior to July 1, 1990 from one and one-quarter percent
of average final compensation to one and two-thirds percent of average final compensation.
A member making an election under this subdivision shall deposit in the Pension Fund
by a single contribution an amount computed at regular interest to be sufficient to
provide at normal retirement an annuity equal to one and two-thirds percent of the
member’s average final compensation multiplied by the number of years of service for
which the member elects to increase his or her retirement allowance.
(15) Notwithstanding any provision to the contrary and except for military credit elected
under subdivision (8) of this subsection, a member may not elect more than a total
of 10 years of creditable service under the provisions of this subsection.
(16) Any time a member is required to make a single contribution in connection with an
election under this subsection, a member may, with the approval of the Board, contribute
over a maximum of five years in installments of equal value toward the purchase of
service. Those contributions shall become a part of the member’s accumulated contribution
and shall be treated for all purposes in the same manner as the contributions made
under subdivision (2) of this subsection. Any member who retires before completing
payment as approved by the Board for the purchase of service under subdivisions (6)
through (14) of this subsection shall receive pro rata credit for service purchased
before the date of retirement, but if the member so elects at the time of retirement,
the member may pay as much in a single sum as is necessary to provide full credit
at that time.
(17) Any member may elect to have included in the member’s creditable service years of
service as a State or municipal employee. Any member who so elects shall deposit in
the Pension Fund by a single contribution an amount computed at regular interest to
be sufficient to provide at normal retirement an annuity equal to one and two-thirds
or two percent, whichever is applicable pursuant to section 1937 of this title, of the member’s average compensation multiplied by the number of years of service
for which the member elects to receive credit. No application for credit under this
subdivision shall be granted if at the time of application, the member has a vested
right to retirement benefits in another retirement system based upon that service.
(c) State contributions, earnings, and payments.
(1) All State appropriations and all reserves for the payment for all pensions including
all interest and dividends earned on the assets of the Retirement System shall be
accumulated in the Pension Fund. All benefits payable under the System, except for
retired teacher health and medical benefits, shall be paid from the Pension Fund.
Annually, the Retirement Board shall allow regular interest on the individual accounts
of members in the Pension Fund that shall be credited to each member’s account.
(2) Beginning with the actuarial valuation as of June 30, 2006, the contributions to be
made to the Pension Fund by the State shall be determined on the basis of the actuarial
cost method known as “entry age normal.” On account of each member, there shall be
paid annually by the State into the Pension Fund a percentage of the earnable compensation
of each member to be known as the “normal contribution” and an additional percentage
of the member’s earnable compensation to be known as the “accrued liability contribution.”
The percentage rate of such contributions shall be fixed on the basis of the liabilities
of the System as shown by actuarial valuation. “Normal contributions” and “accrued
liability contributions” shall be by separate appropriation in the annual budget enacted
by the General Assembly.
(3) The normal contribution shall be the uniform percentage of the total compensation
of members that, if contributed over each member’s prospective period of service and
added to such member’s prospective contributions, if any, will be sufficient to provide
for the payment of all future pension benefits after subtracting the sum of the unfunded
accrued liability and the total assets of the Pension Fund.
(4) It is the policy of the State of Vermont to liquidate fully the unfunded accrued liability
to the System. Beginning on July 1, 2008, until the unfunded accrued liability is
liquidated, the accrued liability contribution shall be the annual payment required
to liquidate the unfunded accrued liability over a closed period of 30 years ending
on June 30, 2038, provided that:
(A) From July 1, 2009 to June 30, 2019, the amount of each annual basic accrued liability
contribution shall be determined by amortization of the unfunded liability over the
remainder of the closed 30-year period in installments increasing at a rate of five
percent per year.
(B) Beginning on July 1, 2019 and annually thereafter, the amount of each annual basic
accrued liability contribution shall be determined by amortization of the unfunded
liability over the remainder of the closed 30-year period in installments increasing
at a rate of three percent per year.
(C) Any variation in the contribution of normal or unfunded accrued liability contributions
from those recommended by the actuary and any actuarial gains and losses shall be
added or subtracted to the unfunded accrued liability and amortized over the remainder
of the closed 30-year period.
(5)-(12) [Repealed.]
(13) Annually, the Board shall certify an amount to pay the annual actuarially determined
employer contribution, as calculated in this subsection, and additional amounts as
follows:
(A) in fiscal year 2024, the amount of $9,000,000.00;
(B) in fiscal year 2025, the amount of $12,000,000.00; and
(C) in fiscal year 2026 and in any year thereafter until the Fund is calculated to have
a funded ratio of at least 90 percent, the amount of $15,000,000.00.
(d), (e) [Repealed.]
(f) Expenses. The expenses of the System, including all the expenses necessary in connection with
the administration and operation of the System, shall be paid from the Pension and
Benefits Funds.
(g) Collection of contributions.
(1) The proper authority or officer responsible for making up the payroll shall draw his
or her warrant, at intervals agreed upon with the Board but at least semiannually,
payable to the System for all contributions deducted from the compensation of members,
and shall transmit these contributions to the Board, together with any schedule of
these contributions the Board requires.
(2) The Board shall certify to the Governor-Elect, as required by 32 V.S.A. § 301, an estimate of the contributions of the State that will become due and payable during
the two years next following to meet the requirements of the Pension Fund of the System,
and shall certify the percentage of payroll of all members that is equivalent to such
amount. The amounts so certified shall be included in the budget submitted to the
General Assembly. When appropriated, the Commissioner of Finance and Management shall
issue his or her warrant in favor of the System for the amount certified by the Board
to be necessary to carry out the provisions of this section.
(h) Contributions by State or political subdivision. Notwithstanding the provisions of subdivision 1944(b)(2) of this title to the contrary and pursuant to the provisions of Section 414(h) of the Internal Revenue Code, the State or political subdivisions employing such members shall pick up and pay
the contributions required to be paid by Group A and Group C members with respect
to service rendered on and after July 1, 1992. Contributions picked up by the State
or political subdivisions employing such members shall be designated for all purposes
as member contribution, except that they shall be treated as State contributions in
determining tax treatment of a distribution. Each member’s compensation shall be reduced
by an amount equal to the amount picked up by the State or political subdivisions
employing such members. This reduction, however, shall not be used to determine annual
earnable compensation for purposes of determining average final compensation. Contributions
picked up under this subsection shall be credited to the Pension Fund.
(i) [Repealed.] (Amended 1959, No. 42, §§ 1, 2; 1959, No. 72, §§ 4, 5, eff. April 1, 1959; 1959 (Adj. Sess.), No. 328, § 8(b); 1963, No. 182, § 3; 1971, No. 187 (Adj. Sess.); 1971, No. 233 (Adj. Sess.), §§ 2-4; 1973, No. 141 (Adj. Sess.), § 7; 1975, No. 175 (Adj. Sess.), § 3; 1977, No. 53, §§ 2, 4, eff. April 23, 1977; 1977, No. 247 (Adj. Sess.), §§ 191-193, 195; 1981, No. 41, §§ 31-34, 39(3); 1983, No. 149 (Adj. Sess.), § 1; 1983, No. 195 (Adj. Sess.), § 5(b); 1989, No. 78, §§ 8, 9; 1989, No. 169 (Adj. Sess.), § 7; 1991, No. 24, § 11; 1991, No. 247 (Adj. Sess.), §§ 1-4; 1993, No. 49, §§ 24, 25, eff. May 28, 1993; 1995, No. 36, § 7; 1995, No. 178 (Adj. Sess.), § 179a; 1999, No. 53, §§ 7, 7a; 1999, No. 158 (Adj. Sess.), § 5; 2001, No. 29, § 6; 2001, No. 63, § 175; 2001, No. 142 (Adj. Sess.), § 206; 2003, No. 122 (Adj. Sess.), § 297f; 2005, No. 163 (Adj. Sess.), § 7; 2005, No. 165 (Adj. Sess.), § 3; 2005, No. 215 (Adj. Sess.), § 277; 2007, No. 13, § 33; 2007, No. 137 (Adj. Sess.), § 7; 2009, No. 24, § 6a; 2009, No. 74 (Adj. Sess.), § 6; 2009, No. 139 (Adj. Sess.), § 6; 2013, No. 179 (Adj. Sess.), § E.514.2; 2015, No. 18, § 7; 2015, No. 172 (Adj. Sess.), § E.514.1; 2017, No. 165 (Adj. Sess.), § 18; 2019, No. 131 (Adj. Sess.), § 87; 2021, No. 114 (Adj. Sess.), § 19, eff. July 1, 2022; 2023, No. 78, § E.514.3, eff. July 1, 2023.)