Municipal Employees' Retirement System of Vermont

V.S.A. tit. 24, ch. 125

in effect

24 V.S.A. § 5051 Definitions

5051. Definitions As used in this chapter: (1) “Accumulated contributions” means the sum of all the amounts deducted for Municipal Employees’ Retirement System purposes from the compensation of a member with interest thereon, as provided in subsection 5063(b) of this title. (2) “Actuarial equivalent” means a benefit of equal value under actuarial assumptions last adopted by the Retirement Board under subsection 5063a(h) of this title. (3) “Annuity” means annual payments for life actuarially derived from the accumulated contributions of a member. (4) “Average final compensation” (AFC) means: (A) For a Group A member, the average annual earnable compensation of a member during the five 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 five years. If the member’s highest five years of earnable compensation are the five years prior to separation of service and the member separates prior to the end of a fiscal year, the AFC shall be determined by adding all of the following: (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 four fiscal years. (iii) The remaining service credit that is needed to complete the five full years, which shall be factored from the fiscal year preceding the four 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 B or C member, the term means the average annual earnable compensation of a member during the three consecutive fiscal years beginning on July 1 and ending on June 30 of creditable service affording the highest average, or during all of the years in his or her creditable service if fewer than three years. If the member’s highest three years of earnable compensation are the three years prior to separation of service and the member separates prior to the end of a fiscal year, the AFC shall be determined by adding all of the following: (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 (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 a Group D member, the term means 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 his or her 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, the AFC shall be determined by adding all of the following: (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 (C). 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. (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 outlined in subdivision (A), (B), or (C) of this subdivision (4) using the earnable compensation received while a member of the System. (5) “Beneficiary” means any person in receipt of a pension, an annuity, a retirement allowance, or other benefit as provided by this chapter. (6) “Board” means the Board of Trustees of the System provided for in section 5062 of this title to administer the System. (7) “Continuous service” means those periods of service as an employee with all employers, provided all of the following conditions are met: (A) The period of each employment was uninterrupted. (B) Not more than 30 days elapsed between termination of one period of employment and commencement of the next. (C) Each such termination occurred after the effective date of the System. (D) Each employer employing the employee after the effective date was a participant in the System during the period it employed the employee. Notwithstanding any other provisions, continuous service prior to the effective date of this plan shall commence on the most recent date of hire as an employee, but in no case shall the continuous service of an employee prior to the effective date of this plan be for a period longer than 20 years. If an employee does not withdraw his or her contributions, continuous service shall not be interrupted by: (i) an approved leave of absence; or (ii) a departure from the Municipal Retirement System for a period of less than three years. (8) “Creditable service” means that period of continuous service subsequent to an employee joining the System and prior to his or her termination of service, during which an employee makes contributions. For those employees who join when first eligible, and whose employer joins on the effective date of this System, there shall be included as creditable service that period of continuous service as an employee prior to such effective date up to a maximum of 20 years with such employer. For those employees of employers who join on the effective date of the System, and who elect to join the System subsequent to the effective date, only the three years of continuous service immediately prior to joining the System shall be included as credited service. For those employees of employers who elect to purchase prior service credit in accordance with subsection 5054(e) of this title, there shall be included as creditable service that period of continuous service as an employee prior to the effective date of participation and allowed in accordance with the prior service purchase agreement but not in excess of 20 years. Creditable service shall also include that transferred under 3 V.S.A. § 495. (9) “Earnable compensation” means the total amounts paid to an employee for his or her position. In cases where compensation includes maintenance, the Retirement Board shall fix the value of that part of the compensation not paid in money. Fees shall be counted as compensation. (10) “Employee” means the following persons employed on a regular basis by a school district, by a supervisory union, or by a cooperative educational service area for not fewer than 1,040 hours in a year and for not fewer than 30 hours a week for the school year, as defined in 16 V.S.A. § 1071, or for not fewer than 1,040 hours in a year and for not fewer than 24 hours a week year-round; provided, however, that if a person who was employed on a regular basis by a school district as either a special education or transportation employee and who was transferred to and is working in a supervisory union or a cooperative educational service area in the same capacity pursuant to 16 V.S.A. § 261a(a)(6) or (8)(E) and if that person is also employed on a regular basis by a school district within the supervisory union, then the person is an “employee” if these criteria are met by the combined hours worked for the supervisory union and school district. The term also means persons employed on a regular basis by a municipality other than a school district for not fewer than 1,040 hours in a year and for not fewer than 24 hours per week, including persons employed in a library at least one-half of whose operating expenses are met by municipal funding: (A) “Group A member” means a person employed by a participating municipality who does not elect to become a Group B, C, or D member under section 5068 of this title or does not become a Group B or C member pursuant to a collective bargaining agreement. (B) “Group B member” means a person employed by a municipality who elects to become a Group B member under section 5068 of this title or becomes a Group B member pursuant to a collective bargaining agreement. (C) “Group C member” means a person employed by a municipality who elects to become a Group C member under section 5068 of this title or becomes a Group C member pursuant to a collective bargaining agreement. (D) “Group D member” means a person employed by a participating municipality who elects to become a Group D member under section 5068 of this title. (E) The Retirement Board shall determine any question as to whether a person is an employee as defined in this chapter. (11) “Employer” means a municipality, a library at least one-half of whose operating expenses are paid from municipal funds, or a supervisory union. (12) “Medical Board” means the board of physicians provided for in section 5062 of this title. (13) “Member” means any employee included in the membership of the Retirement System under section 5053 of this title. (14) “Municipality” means a city, town, county, incorporated village, fire district, consolidated water district, housing authority, union municipal district, school district, incorporated school district, union school district, or any of their instrumentalities. The Retirement Board shall determine any question as to whether an employer is eligible to participate in the System. (15) “Normal retirement date” means: (A) for Group A members, the first day of the calendar month next following the attainment of age 65 and the completion of five years of creditable service or age 55 and completion of 35 years of creditable service; (B) for Group B members, the first day of the calendar month next following the attainment of age 62 and the completion of five years of creditable service or age 55 and completion of 30 years of creditable service; and (C) for Group C and D members, the first day of the calendar month next following the attainment of age 55 and the completion of five years of creditable service. (16) “Pension” means annual payments for life derived from contributions by the State and municipality. (17) “Pension reserve” means the present value of all payments to be made on account of a pension, or benefit in lieu of a pension, computed at regular interest on the basis of tables last adopted by the Board. (18) “Regular interest” means interest at such rate or rates as may be established from time to time by the Board as provided in subsection 5063(b) of this title. (19) “Retirement” means withdrawal from active service with a retirement allowance granted under the provisions of this chapter. (20) “Retirement allowance” or “maximum allowance” means 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. (21) “Service” means service as an employee for which compensation is paid by an employer as defined in subdivision (11) of this section, service recognized under section 5054 of this title, or service prior to the effective date of the plan. (22) “System” means the Municipal Employees’ Retirement System of Vermont, as defined in section 5052 of this title. (23) “Fund” or “Vermont Municipal Retirement Fund” means the fund created by section 5064 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. Added 1973, No. 251 (Adj. Sess.), § 3; amended 1977, No. 164 (Adj. Sess.), § 3, eff. March 31, 1978; 1977, No. 205 (Adj. Sess.), § 1; 1983, No. 56, § 1, eff. April 22, 1983; 1983, No. 128 (Adj. Sess.), § 1; 1987, No. 39, § 1; 1987, No. 183 (Adj. Sess.), § 20, eff. May 7, 1988; 1989, No. 11, §§ 1, 2; 1991, No. 233 (Adj. Sess.), § 1; 1999, No. 61, § 1; 1999, No. 53, §§ 8, 8a; 2005, No. 197 (Adj. Sess.), § 1; 2007, No. 13, § 36; 2007, No. 137 (Adj. Sess.), § 8; 2009, No. 24, §§ 7, 8; 2011, No. 156 (Adj. Sess.), § 24, eff. May 16, 2012; 2013, No. 22, § 13; 2017, No. 165 (Adj. Sess.), § 25; 2019, No. 131 (Adj. Sess.), § 270; 2021, No. 20, § 261; 2023, No. 168 (Adj. Sess.), § 8, eff. July 1, 2024; 2025, No. 170 (Adj. Sess.), § 8, eff. July 1, 2026.

24 V.S.A. § 5052 Name and date of establishment

5052. Name and date of establishment The date of establishment of the Retirement System shall be July 1, 1975. The System shall be known as the “Vermont Municipal Employees’ Retirement System”, and by such name all of its business shall be transacted, all of its assets invested, and all of its cash and securities and other property held in trust for the purpose for which received. Added 1973, No. 251 (Adj. Sess.), § 3; amended 2007, No. 13, § 37.

24 V.S.A. § 5053 Members

5053. Members (a) An employee of an employer who joins the Vermont Municipal Employees’ System may become a member of the System on the effective date of participation of said employer or at a later date if he or she has completed three or more years of continuous service as an employee. If an employee does not elect to join on the effective date of the System, he or she may join on the first of any subsequent month. (b) Any employee who is hired subsequent to the effective date of participation of his or her employer shall become a member of the System on the date the employee is hired. (c) A municipality may elect to join the Vermont Municipal Employees’ Retirement System by a vote of the legislative body of such municipality for all its employees or for employees of one or more groups of employees that have a similarity of interest, needs, and general conditions of employment or dates of hire, as determined by the legislative body and approved by the Board. The effective date of participation for such employers shall be designated by the Retirement Board. The vote by the legislative body of a municipality to join the Vermont Municipal Employees’ Retirement System shall be irrevocable. (d) The Retirement Board may, upon application of the legislative body and an employee, exempt individual employees from membership in the System, provided that the Board determines that the employee is participating in an alternative retirement system, including a retirement plan qualifying under Section 401(a) or 457 of the Internal Revenue Code, which better meets the retirement needs of the employee. Added 1973, No. 251 (Adj. Sess.), § 3. 1974; amended 1977, No. 205 (Adj. Sess.), § 2; 1987, No. 39, § 2; 1989, No. 11, § 6, eff. July 1, 1990; 1991, No. 233 (Adj. Sess.), § 2; 1995, No. 118 (Adj. Sess.), § 1; 1999, No. 53, § 12; 1999, No. 158 (Adj. Sess.), § 17; 2007, No. 13, § 38; 2009, No. 24, § 9; 2013, No. 115 (Adj. Sess.), § 3.

24 V.S.A. § 5053a Employees of a supervisory union

5053a. Employees of a supervisory union (a) For purposes of this section, the term “transferred employee” means an employee under this chapter who transitioned from employment solely by a school district to employment, wholly or in part, by a supervisory union pursuant to 16 V.S.A. § 261a(a)(6) or (8)(E) as amended on June 3, 2010. (b) A transferred employee from a participating school district shall remain an employee of the school district solely for the purpose of employer participation and employee membership in the System regardless of whether the supervisory union is a participant in the System on the date of transition. The membership and benefits of the transferred employee shall not be impaired or reduced by either negotiations with the supervisory union or school district under 21 V.S.A. chapter 22 or otherwise. (c) If a supervisory union is a participant in the System on the date of transition, then: (1) a transferred employee from a nonparticipating district shall not become a member of the System unless, through negotiations with the supervisory union under 21 V.S.A. chapter 22, the supervisory union becomes a participant in the System on the employee’s behalf; (2) an existing employee of the supervisory union on the date of transition shall be a member to the extent the supervisory union is or becomes a participant in the System on the employee’s behalf; and (3) a new employee of the supervisory union after the date of transition shall be a member to the extent the supervisory union is or becomes a participant in the System on the employee’s behalf. (d) If a supervisory union is not a participant in the System on the date of transition, then: (1) a transferred employee from a nonparticipating district shall not be a member of the System unless, through negotiations with the supervisory union under 21 V.S.A. chapter 22, the supervisory union becomes a participant in the System on the employee’s behalf; (2) an existing employee of the supervisory union on the date of transition shall not be a member of the System unless, through negotiations with the supervisory union under 21 V.S.A. chapter 22, the supervisory union becomes a participant in the System on the employee’s behalf; and (3) a new employee of the supervisory union after the date of transition shall not be a member of the System unless, through negotiations with the supervisory union under 21 V.S.A. chapter 22, the supervisory union becomes a participant in the System on the employee’s behalf. Added 2011, No. 156 (Adj. Sess.), § 25, eff. May 16, 2012.

24 V.S.A. § 5054 Creditable service

5054. Creditable service (a) An employee who becomes a member on July 1, 1975 shall receive credit for all prior service as an employee since the employee’s most recent date of hire with his or her present employer, up to a maximum of 20 years. Any other person who becomes a member shall receive credited service for the three year period prior to joining. (b) All service of a member since he or she last became a member on account of which contributions are made shall be credited service. (c) The Retirement Board shall fix and determine by rule 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, nor shall more than one year of service be creditable for all service in one fiscal year. Service rendered as an employee for the full normal working time in any year shall be equivalent to one year’s service, but in no case shall less than the minimum number of hours established under subdivision 5051(10) of this title be regarded as full normal working time. (d) Any employee whose continuous service is broken and is later rehired, shall be considered as a new employee without any credit for service previously rendered. (e) The Retirement Board may enter into a prior service purchase agreement with any municipality which has participated in another funded retirement system to enter the Vermont Municipal Employees’ Retirement System and transfer assets from its predecessor system into the Vermont Municipal Employees’ System representing the liabilities for continuous service accrued prior to the participation effective date. Assets received by the municipality from the predecessor system shall be transferred to the Vermont Municipal Employees’ Retirement System in a lump sum. Liabilities not covered by the lump sum deposit shall be contributed by the municipal employer as an additional employer contribution rate determined in accordance with the provisions of subdivision 5064(c)(6) of this title. (f) The Board may enter into a prior service purchase agreement with any member who has participated in a public retirement system other than this System. A member who desires to purchase creditable service for service with a public retirement system outside this System must make application to the Board to purchase such creditable service. Upon approval by the Board, a member who desires to purchase additional creditable service must deposit in the Fund, a lump sum equal to the accrued liability (based on the assumptions and methodology adopted by the Board) for such additional creditable service. In lieu of a single payment, a member may, subject to the approval of the Board, contribute in installments of equal monthly payments (over a period not to exceed 60 months) the actuarial equivalent value (based on assumptions adopted by the Board) of the lump sum payment described in this section. Any member who terminates prior to completing all required installment payments as approved by the Board shall receive pro rata credit for service purchased before the member’s date of termination, but if so elected at the time of termination, the member may pay as much in a single sum as is necessary to provide full credit at this time. The payments made by the member pursuant to this subsection shall be treated for all purposes as member contributions. No application may be accepted for purchase of credit for prior service in a public retirement system if at the time of application the member has a vested right to retirement benefits in such public retirement system. (g) The Board may enter into a prior service purchase agreement with any Group B member who has participated in Group A, a Group C member who has participated in Group A or B for service in that group, a Group D member who has participated in Group A, B, or C for service in one of those groups, or an employer on behalf of a member as described in this subsection. The purchase made by a member shall follow the procedure set forth in subsection (f) of this section. The purchase made by an employer on behalf of a member shall be paid in equal annual installments over a specified period as determined by the Board. (h) Credit shall be granted for any period of approved absence from service due to any class of military service approved by the Retirement Board, provided the employee returns to service in the municipality 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 municipality. 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. (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 such service. The total compensation under this subsection shall not exceed what the earnable compensation would have been had the member not been injured. Added 1973, No. 251 (Adj. Sess.), § 3. 1974; amended 1983, No. 128 (Adj. Sess.), § 3; 1987, No. 39, § 3; 1987, No. 183 (Adj. Sess.), § 21, eff. May 7, 1988; 1989, No. 11, § 7; 1991, No. 233 (Adj. Sess.), §§ 3, 4; 1999, No. 61, § 2; 2001, No. 29, § 8; 2007, No. 13, § 39; 2015, No. 114 (Adj. Sess.), § 8.

24 V.S.A. § 5054a Elective credits

5054a. Elective credits (a) Any member may elect to have included in the member’s creditable service, years of service as an employee of another municipality, as a State employee, or as a teacher in a public or private school, as defined by the Board, and years of service in the defined contribution plan authorized under section 5070 of this title when the employee elects to transfer back to the defined benefit plan as a result of his or her employer offering a higher group plan. 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 defined benefit retirement system based upon that service. (b) 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 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. (c) Any time a member is required to make a single contribution in connection with an election under this section, a member may contribute over a maximum of five years in installments of equal value. Those contributions shall become a part of the member’s accumulated contributions. Any member who retires before completing payment 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. (d)(1) Prior to receiving a retirement allowance, any Group A, B, or C member who is elected to serve as the president of an employee organization designated as the exclusive bargaining representative for employees in this chapter may elect to have included in the member’s creditable service a year during which they received no creditable service due to serving as the employee organization president with full release from employment responsibilities to a qualifying System employer, provided that on behalf of any member who so elects, the employee organization shall deposit in the Pension Fund an amount determined by the System’s actuary to be cost neutral to the System. (2) Any purchase under this subsection shall be completed and payment received by the System on or before June 30 for each year of service purchased. (3) It shall be the responsibility of the employee organization to initiate each purchase with the System. Added 1999, No. 53, § 8b; amended 2001, No. 29, § 9; 2005, No. 197 (Adj. Sess.), § 2; 2007, No. 13, § 40; 2009, No. 24, § 10; 2015, No. 18, § 8; 2025, No. 131 (Adj. Sess.), § 22, eff. July 1, 2026.

24 V.S.A. § 5055 Normal and early retirement

5055. Normal and early retirement (a) Normal retirement. Any member who has reached his or her normal retirement date may retire on a normal retirement allowance on the first day of any month after separation from service by filing an application in the manner outlined in subdivision (1) of this subsection. Any member in service may be retired on a normal retirement allowance on the first day of the calendar month next following his or her normal retirement date. (1) 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. (b)(1) Normal retirement allowance. Upon normal retirement, a Group A member shall receive a normal retirement allowance that shall be equal to one and four-tenths percent of his or her average final compensation multiplied by the number of years of creditable service as a Group A member up to a maximum of 60 percent of average final compensation; a Group B member shall receive a normal retirement allowance which shall be equal to the normal retirement allowance earned as a member of Group A, if any, up to a maximum of 60 percent of average final compensation, plus one and seven-tenths percent of his or her average final compensation multiplied by the number of years of creditable service as a Group B member, up to a maximum of 60 percent of average final compensation; and a Group C or Group D member who retires prior to July 1, 1995 shall receive a normal retirement allowance which shall be equal to the normal retirement allowance earned as a member of Group A, if any, up to a maximum of 60 percent of average final compensation, and that earned as a member of Group B, if any, up to a maximum of 60 percent of average final compensation, plus two and one-half percent of his or her average final compensation multiplied by the number of years of creditable service as a member of Group C, up to a maximum of 50 percent of average final compensation. The normal retirement allowance for a Group B member who is hired on or after July 1, 1999 shall be equal to the early retirement allowance earned as a member of Group A, including reductions set forth in subsection (d) or (e) of this section as appropriate, if any, plus the normal retirement allowance earned as a member of Group B. The normal retirement allowance for a Group C or Group D member who retires on or after July 1, 1995 shall be equal to the early retirement allowance earned as a member of Group A including reductions set forth in subsection (d) or (e) of this section as appropriate, if any, up to a maximum of 60 percent of average final compensation, plus the early retirement allowance earned as a member of Group B including reductions set forth in subsection (d) or (e) of this section as appropriate, if any, up to a maximum of 60 percent of average final compensation, plus the normal retirement allowance earned as a member of Group C or Group D, up to a maximum of 50 percent of average final compensation. (2) The average final compensation used to calculate the retirement allowance under all plans shall be based on the definition of the average final compensation for the member’s group plan immediately preceding retirement. (c) Early retirement. Any member who has not reached his or her normal retirement date but who has completed five years of creditable service, at least two and one-half of which have been as a contributor subsequent to joining the System, and who has attained age 55 may retire on an early retirement allowance. (d) Early retirement allowance. Upon early retirement, a member shall receive an early retirement allowance equal to the retirement benefit reduced by one-half of one percent for each of the first 120 months, one-sixth of one percent for each of the next 120 months, one-eighteenth of one percent for each of the next 120 months, and one-fifty-fourth of one percent for each additional month that the member is under the normal age at the time of early retirement. (e) Early retirement allowance—police officers. Notwithstanding subsections (c) and (d) of this section, upon early retirement, sworn municipal police officers who have attained age 60 and who are members of Group A or B shall receive an early retirement allowance which shall be equal to his or her normal retirement allowance computed under subsection (b) of this section, reduced by one-quarter of one percent for each month the member is under the normal age at the time of early retirement. Municipal public safety officers who have attained age 50 and completed 20 years of creditable service and who are members of Group D may retire on an early retirement allowance. Members of Group D who retire on an early retirement allowance shall receive an early retirement allowance which shall be equal to the normal retirement allowance at age 55 for Group D service with no reduction applied, but shall have all appropriate penalties applied to accrued Group A, Group B, or Group C service. (f) In any fiscal year in which a beneficiary resumes service, as that term is defined in section 5051 of this title, after separation from service for a period of time to be determined by the Board, 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. (g) Upon the subsequent retirement of an employee who once again became a member under subsection (f) of this section, the employee shall once again become a beneficiary whose former retirement allowance shall be restored, but the beneficiary shall not be entitled to cost of living adjustments for the period during which he or she was restored to service. In addition to the former retirement allowance, a beneficiary shall be entitled to a retirement allowance separately computed for the period beginning with his or her last restoration to service for which the member has made a contribution. If the beneficiary is not vested in the System since he or she was last restored to service, the member’s contributions plus accumulated interest shall be returned to him or her. Added 1973, No. 251 (Adj. Sess.), § 3. 1974; amended 1977, No. 164 (Adj. Sess.), §§ 1, 2, eff. March 31, 1978; 1987, No. 39, § 4; 1989, No. 11, §§ 3, 8; 1991, No. 233 (Adj. Sess.), § 5; 1995, No. 25, § 1; 1999, No. 53, § 9; 1995, No. 61, § 3; 2001, No. 29, § 10; 2001, No. 116 (Adj. Sess.), § 10, eff. May 28, 2002; 2003, No. 122 (Adj. Sess.), § 297g; 2007, No. 13, § 41; 2007, No. 137 (Adj. Sess.), § 9; 2009, No. 24, § 11.

24 V.S.A. § 5056 Disability retirement

5056. Disability retirement (a) Upon application of a member not more than 90 days before, or later than 90 days, or longer for cause shown, the date a member separates from service, any member who has not reached his or her normal retirement date and has had five or more years of creditable service, may be retired by the Retirement Board on a disability retirement allowance on the first of the month following separation from service; provided that the Medical Board, after an examination of the medical records of the member or a medical examination by a physician or physicians designated by the Medical Board, shall certify that the member is mentally or physically incapacitated for the further performance of the member’s specific job requirements, that such incapacity has existed at and since the time of the member’s separation from service and is likely to be permanent, and that he or she should be retired. If the member has applied for and been granted a disability retirement allowance from the Social Security Administration prior to submission of municipal application, an automatic approval will be granted upon receipt of proof of Social Security disability allowance. (b) Upon a disability retirement, a member shall receive a normal retirement allowance if he or she has reached his or her normal retirement date; otherwise a member shall receive the allowance accrued to date of disability. (c) Notwithstanding subsection (b) of this section, a Group D member, upon ordinary disability retirement, shall receive an additional allowance which will be equal to ten 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, if the member’s compensation from the municipality: (1) Is not subject to Social Security withholding; or (2) When added to his or her Social Security benefit, is subject to Social Security withholding. Added 1973, No. 251 (Adj. Sess.), § 3; amended 1983, No. 56, § 2, eff. April 22, 1983; 1987, No. 39, § 5; 1989, No. 11, § 4; Amended 1999, No. 61, § 7; 2005, No. 197 (Adj. Sess.), § 3.

24 V.S.A. § 5056a Benefit denial; evidentiary hearing

5056a. Benefit denial; evidentiary hearing (a) An applicant for disability retirement benefits under section 5056 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 an appeal de novo and shall be conducted by a hearing officer designated by the Board and in conformance with rules adopted by the Board. Rules adopted by the Board shall be consistent with 3 V.S.A. § 809. (c) The decision of the hearing officer shall constitute final administrative action. (d) The Retirement System or the applicant may appeal a decision of the hearing officer to the Supreme Court pursuant to Rule 13 of the Vermont Rules of Appellate Procedure. Added 2003, No. 38, § 7; amended 2005, No. 197 (Adj. Sess.), § 4.

24 V.S.A. § 5057 Reexamination of disability beneficiary

5057. Reexamination of disability beneficiary (a) Once each year, the Retirement Board or the Medical Board may require any disability beneficiary who has not reached his or her normal retirement date to undergo a medical examination, by a physician or physicians designated by the Medical Board, the examination to be made at the place of residence of the beneficiary or other place mutually agreed upon. In lieu of a medical examination, the Retirement Board may request current medical records or evidence to substantiate the continued disability status. (b) Should any disability beneficiary who has not reached his or her normal retirement date refuse to submit to such medical examination or refuse to supply current medical records or other requested medical evidence, his or her allowance may be discontinued until withdrawal of such refusal, and should refusal continue for one year, all the beneficiary’s rights in and to his or her pension may be revoked by the Retirement Board. Added 1973, No. 251 (Adj. Sess.), § 3; amended 2005, No. 197 (Adj. Sess.), § 5.

24 V.S.A. § 5058 Reinstatement

5058. Reinstatement Should a disability beneficiary be restored to service and should his or her annual earnable compensation then or at any time thereafter be equal to or greater than his or her average final compensation at retirement, 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 chapter 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 the age of 55 years, his or her pension upon subsequent retirement shall not exceed the sum of the pension that he or she was receiving immediately prior to his or her last restoration to membership and the pension that may have accrued to him or her on account of membership service since his or her last restoration to membership. Added 1973, No. 251 (Adj. Sess.), § 3.

24 V.S.A. § 5059 Termination of service; preretirement death benefit

5059. Termination of service; preretirement death benefit (a) Upon the withdrawal of a member from service prior to retirement for reasons other than death, the amount of the member’s accumulated contributions with interest will be returnable to the member. In lieu of a return of contributions, any member who has completed five years of credited service, and at least two and one-half years of which have been as a contributing member, may allow his or her contributions to remain in the System and receive a deferred vested retirement allowance, commencing as early as the eligibility date for early retirement, which shall be equal to an early or a normal retirement allowance accrued to the member’s date of termination of continuous service. The average final compensation used to calculate the normal retirement allowance under this section shall be increased or decreased annually by a cost of living adjustment equal to one-half of the percentage increase or decrease, calculated to the nearest one-tenth of a percent in the Consumer Price Index, as defined in section 5067 of this title, for the preceding fiscal year. The increase or decrease shall commence on the January 1 immediately following separation from service. The maximum annual adjustment of any retirement allowance resulting from any cost of living adjustment under this subsection shall be two percent for Group A members and three percent for Group B, Group C, or Group D members. (b) Unless the designated dependent beneficiary elects to receive payment of a deceased member’s accumulated contributions as provided under subsection (a) of this section, the retirement allowance payable to the dependent beneficiary of a deceased Group A, Group B, or Group C member under this section shall be equal to the retirement allowance that would have been payable had the member elected option 1 under section 5060 of this title and retired on the member’s date of death; the retirement allowance payable to the spouse of a Group D member under this section shall be equal to 70 percent of the retirement allowance that would have been payable had the member 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 designated dependent beneficiary, the member’s accumulated contributions shall be payable to the member’s designated beneficiaries. In the absence of a designated 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: (1) In the case of an open estate, to the administrator or executor. (2) 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. (3) 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. (4) 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. Added 1973, No. 251 (Adj. Sess.), § 3; amended 1987, No. 39, § 6; 1989, No. 11, § 5; 1999, No. 53, § 10; 2001, No. 116 (Adj. Sess.), § 11, eff. May 28, 2002; 2005, No. 197 (Adj. Sess.), § 6; 2007, No. 13, § 42; 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011; 2013, No. 22, § 14.

24 V.S.A. § 5060 Optional benefits

5060. 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 below. Option 1. 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 Option 2. 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 1 or 2 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 5055 or 5056 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 5055 or 5056 of this title, whichever is applicable. Added 1973, No. 251 (Adj. Sess.), § 3; 1999, No. 53, § 11.

24 V.S.A. § 5061 Death benefit; post retirement

5061. Death benefit; post retirement The beneficiary of a member who dies after retirement shall receive 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. However, if the member elected an option prior to the commencement of the benefit, the provisions thereof shall apply. Under all options, in the absence of a written designation of beneficiary, or in the event the designated beneficiary is deceased, the residual amount payable as a result of the death of the member after retirement shall be payable as follows: (1) In the case of an open estate, to the administrator or executor. (2) In the case of a closed estate and the residual amount payable is valued at less than $1,000.00, in accordance with the Probate Division of the Superior Court decree of distribution. (3) In the absence of an open estate or Probate Division of the Superior Court decree of distribution, and the residual amount payable 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. (4) 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 residual amount payable. When an estate is opened solely to distribute the residual amount payable under this section, the Probate Division of the Superior Court may waive any filing fees. Added 1973, No. 251 (Adj. Sess.), § 3; amended 2007, No. 13, § 43; 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011.

24 V.S.A. § 5061a Accidental and occupationally-related death benefit

5061a. Accidental and occupationally-related death benefit If the Retirement Board shall find on the basis of such evidence as may come before it that a Group D member in service died prior to retirement under the System as the natural and proximate result of an accident occurring at a definite time and place during the course of the member’s 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 the member’s dependent beneficiary during the beneficiary’s life. The terms and conditions of such payments shall be the same as those prescribed for Group C members as defined in 3 V.S.A. § 464. Added 1999, No. 61, § 8.

24 V.S.A. § 5061b Death benefit after retirement—Group D

5061b. Death benefit after retirement—Group D If a Group D member in receipt of a retirement allowance dies, the member’s dependent spouse shall receive, until his or her 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 the member had elected such an option. Added 1999, No. 61, § 9.

24 V.S.A. § 5062 Retirement Board; Medical Board; actuary; rates of contribution; safekeeping of securities

5062. Retirement Board; Medical Board; actuary; rates of contribution; safekeeping of securities (a)(1) The general administration and responsibility for the proper operation of the Retirement System and for making effective the provisions of this chapter are hereby vested in a board of five trustees, known as the Retirement Board. The Board shall consist of: (A) the State Treasurer; (B) two employee representatives who shall at all times during their term of office both be contributing members of the System and have completed five years of creditable service, elected by the membership of the System; (C) one employer representative who shall at all times during their term of office be a member of a governing body, the chief executive officer, or a supervisor as defined in 21 V.S.A. § 1502(13), of an employer participating in the System, elected by the governing bodies of the System employers; and (D) one employer representative who shall at all times during their term of office be a member of a governing body, the chief executive officer, or a supervisor as defined in 21 V.S.A. § 1502(13), of an employer participating in the System, appointed by the Governor from a list of not less than three nominations jointly submitted by the Vermont League of Cities and Towns and the Vermont School Boards Association. (2) An individual shall not be eligible to serve as an employee representative if the individual is eligible to serve as an employer representative. (b) All trustees shall be entitled to the necessary expenses, including traveling expenses, incurred in the discharge of their duties. All trustees shall be entitled to receive a per diem as provided in 32 V.S.A. § 1010 except a trustee who is a State or municipal employee, provided that a trustee who is a municipal employee shall be entitled to the per diem when the trustee’s compensation from the municipality is reduced as result of the performance of his or her official duties, or the trustee’s official duties are performed on his or her personal time. Compensation or reimbursements under this subsection shall be from the Fund of the Retirement System. (c) Each trustee shall be entitled to one vote in the Retirement Board. Three 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 may designate in writing a person within the State Treasurer’s Office to attend a meeting or meetings of the Retirement Board in the State Treasurer’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 State Treasurer at such meeting or meetings except that the designee shall not automatically assume the Treasurer’s place as an officer of the Board. (d) Subject to the limitations of this chapter, 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 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. (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 chapter, shall investigate all essential statements and certificates by or on behalf of a member in connection with an application for disability retirement, and shall report in writing to the Retirement Board of its conclusions and recommendations upon all matters referred to it. (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. (k) 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 chapter. Beginning July 1, 2023, at least once every three fiscal years following the establishment of the System, the actuary shall make an actuarial investigation into the mortality, service, and compensation experience of the members and beneficiaries of the 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 chapter. (l) 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. (m) [Repealed.] (n) The Board shall determine the election procedures by which the two employee representatives and employer representative elected by the governing bodies of the System employers who are members of the Board are elected. Elections shall be held to take effect on July 1, 2010, for the first employee representative and employer representative elected by the governing bodies of the System employers and every four years thereafter; and on July 1, 2012, for the second employee representative and employer representative appointed by the Governor and every four years thereafter. The term in office for each elected member of the Board shall be four years. Vacancies of an elected Board member’s seat in midterm shall be filled by an individual eligible for election to that seat designated by the remaining members of the Board. (o) [Repealed.] Added 1973, No. 251 (Adj. Sess.), § 3; amended 1977, No. 205 (Adj. Sess.), § 3; 1985, No. 223 (Adj. Sess.); 1987, No. 92, § 5, eff. June 23, 1987; 1991, No. 151 (Adj. Sess.), §§ 5, 6; 1995, No. 36, § 9; 1999, No. 158 (Adj. Sess.), § 25; 2005, No. 50, § 8; 2007, No. 13, § 44; 2009, No. 139 (Adj. Sess.), § 8, eff. June 30, 2010; 2013, No. 161 (Adj. Sess.), § 72; 2021, No. 75, § 8, eff. June 8, 2021; 2021, No. 114 (Adj. Sess.), § 27, eff. July 1, 2022; 2025, No. 131 (Adj. Sess.), § 19, eff. July 1, 2026.

24 V.S.A. § 5063 Investments; interest rate; disbursements

5063. Investments; interest rate; disbursements (a) The members of the Vermont Pension Investment Commission established in 3 V.S.A. chapter 17 shall be the trustees of the Fund created by this chapter, 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 with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of capital as well as the probable income to be derived. (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 Treasurer or by the Deputy Treasurer, 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) [Repealed.] (e) Except as otherwise herein provided, no trustee and no employee of the Retirement Board 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, directly or indirectly, for the trustee or employee personally or as an agent, in any manner use the same except to make such current and necessary payments as are authorized by the Board; nor shall any trustee or employee of the Board become an endorser or surety, or in any manner an obligor, for monies loaned to or borrowed from the Board. Added 1973, No. 251 (Adj. Sess.), § 3; amended 1981, No. 41, § 37; 1985, No. 171 (Adj. Sess.), § 5, eff. May 7, 1986; 1987, No. 80, § 10, eff. June 9, 1987; 1995, No. 118 (Adj. Sess.), § 2; 2005, No. 50, § 9; 2007, No. 13, § 45; 2021, No. 75, § 9, eff. June 8, 2021; 2025, No. 131 (Adj. Sess.), § 20, eff. July 1, 2026.

24 V.S.A. § 5063a Compliance with federal law

5063a. 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 which constitutes an “eligible rollover distribution” within the meaning of 26 U.S.C. § 402, may elect, in the time and manner prescribed by the Retirement Board and after receipt of proper notice, to have any portion of the distribution paid directly to another plan that is qualified under 26 U.S.C. § 401(a), to an annuity plan described in 26 U.S.C. § 403(a), to an annuity contract described in 26 U.S.C. § 403(b), or to an eligible plan described in 26 U.S.C. § 457(b) that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and that agrees to account separately for amounts transferred into such plan, or to an individual retirement account or annuity described in 26 U.S.C. § 408(a) or (b), in a direct rollover. For distributions made after December 31, 2009 in accordance with 26 U.S.C. § 402(c)(11), a nonspouse beneficiary who is a designated beneficiary under 26 U.S.C. § 401(a)(9), may establish an individual retirement account into which all or a portion of a death distribution from the Retirement System to which such nonspouse beneficiary is entitled can be transferred directly. (j) Compliance with the Uniformed Services Employment and Reemployment Rights Act (USERRA). Notwithstanding any provision of law to the contrary, contributions, benefits, and service credits with respect to qualified military service 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. 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. (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, § 46; amended 2009, No. 24, § 12; 2015, No. 18, § 9; 2017, No. 165 (Adj. Sess.), § 26; 2019, No. 14, § 68, eff. April 30, 2019.

24 V.S.A. § 5064 Funds

5064. Funds (a) Fund. All of the assets of the Retirement System shall be credited to the Vermont Municipal Retirement Fund. (b) Member savings. Contributions deducted from the compensation of members together with any member contributions transferred from a predecessor system shall be accumulated in the Fund and separately recorded for each member. Contributions shall be made by Group A members at the rate of three percent of earnable compensation. Contributions shall be made by Group B members at the rate of five percent of earnable compensation. Contributions shall be made by Group C and Group D members at a rate of 11 percent of earnable compensation. Additionally, if an employee remains in Group C and is employed by an employer who elects to revoke its Group C membership in accordance with subsection 5068(f) of this title, the rate established in this subsection will be adjusted. This adjustment shall be determined by subtracting the Group B rate, or if not applicable, the Group A rate determined in subdivision (c)(1) of this section from the Group C rate determined in subdivision (c)(1) of this section. (1) 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 member shall be deemed to consent and agree to the deductions made and provided pursuant to this section and shall receipt for the member’s 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 chapter. (2) The contributions of a member and interest as may be allowed thereon which are withdrawn by the member or paid to the member’s estate or to the designated beneficiary in event of the member’s death, shall be paid from the Fund. (3) The employer shall make one of the following elections: (A) To make, on behalf of the members, all or any part of contributions required to be made by members under this section. Each of the amounts shall be deducted until the member retires or otherwise withdraws from service, and when deducted shall be paid into the Fund and credited to the individual account of the member from whose compensation the deduction was made. (B) Pursuant to the provisions of Section 414(h) of the Internal Revenue Code, to pick up and pay the contributions required to be paid by members with respect to service rendered on and after July 1, 1999. Contributions picked up by the municipality under this election shall be designated for all purposes as member contributions, except that they shall be treated as employer 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 municipality. This reduction, however, shall not be used to determine annual earnable compensation for purposes of determining average final compensation. Contributions picked up under this subdivision shall be credited to the Fund. (c) Employer contributions, earnings, and payments. All employer contributions and all 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 expenses of the System shall be paid from the Fund. (1) On account of each member, an employer shall report earnable compensation and pay annually, in installments as determined by the Board, into the Fund an amount equal to the certain percentage of the annual earnable compensation of such member. Such contribution percentage shall be separately determined for each group of membership within the Retirement System as the sum of “normal contribution rate” for such membership group and its “accrued liability contribution rate,” such sum to be reduced by the member contribution rate provided for in subsection (b) of this section. (2) On the basis of the actuarial assumptions and methodology as shall be adopted by the Retirement Board, immediately after making each actuarial valuation, the actuary shall determine the “normal contribution rate” for each group of membership. The product of a membership group’s normal contribution rate and its total earnable compensation shall be referred to as that membership group’s “normal contribution.” (3) In each actuarial valuation, the actuary shall, based on methodology adopted by the Retirement Board, determine the amount of the Fund attributable to each membership group within the Retirement System for valuation purposes. The difference between each membership group’s accrued liability and its allocated share of Fund assets as of any valuation date shall be referred to as such membership group’s “unfunded accrued liability.” (4) For each actuarial valuation completed on or after July 1, 2009, the accrued liability contribution rate shall be computed for each membership group based on the actuarial assumptions and methodology adopted by the Retirement Board as the rate percent of the earnable compensation of the employees in such membership group which, if applied to expected future earnings of current and future employees of such membership group, would be expected to liquidate the membership group’s unfunded accrued liability on or before June 30, 2038. The product of a membership group’s accrued liability rate and its total earnable compensation shall be referred to as that membership group’s “accrued liability contribution.” (5) The accrued liability contribution for a separate membership group shall be discontinued, and the unfunded accrued liability for such membership group shall be set equal to zero in the event the assets attributable to such membership group should exceed the accrued liability as determined under the assumptions and methodology approved by the Retirement Board. (6) The Retirement Board shall have performed a separate actuarial valuation for each group entering the System under the provisions of subsection 5054(e) of this title to determine the amount of liability, the deposit required to pay for that liability, and the amount of increased rate of contribution required to pay for the liability not covered by any lump sum deposit, such rate to be calculated by the actuary as the excess, if any, of the accrued liability contribution rate of subdivision (c)(3) of this section determined separately for the group entering the System over such rate for the System, calculated excluding such group. Such additional rate shall be paid by the entering group over a specified period as determined by the Board, not to exceed 30 years. The rate determined as a result of the actuarial calculation under this subdivision shall be paid by each employer entering the System under subsection 5054(e) in addition to the amount paid in accordance with subdivision (4) of this subsection. (d) Operation expenses. As provided by law, the Board shall certify to the Governor or Governor-Elect an estimated amount required for operation expenses of the System in the next annual or biennial period. The amount so certified shall be included in the budget, with the revenue derived from the Vermont Municipal Retirement Fund, and submitted to the General Assembly. (e) Remittance of member contributions and employer contributions. Each employer shall remit its employer contributions and the member contributions applicable to its employees in installments as determined by the Board to the State Treasurer. (1) Any payments due which are not received within 30 days after the installment due date set by the Board shall result in a penalty assessment against the employer at the rate of one percent of the amount due for each month calculated from the installment due date, provided that the Board may, in its discretion, waive part or all of said penalty assessment if good cause is shown. The delinquent payments and penalties thereon may be recovered by action in a court of competent jurisdiction against the employer liable therefor or may be deducted by, or at the request of, the State Treasurer from any other monies payable to such employer by the State or any department or agency thereof. (2) 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. (3) 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. (4) The System may enforce the provisions of this section in Washington Superior Court. (5) The Board may, in its discretion, waive part or all of a penalty assessment for good cause shown. (f) [Repealed.] Added 1973, No. 251 (Adj. Sess.), § 3; amended 1975, No. 254 (Adj. Sess.), §§ 149-151; 1977, No. 205 (Adj. Sess.), § 4; 1983, No. 128 (Adj. Sess.), § 2; 1985, No. 74, § 302; 1987, No. 39, §§ 7, 8, 11; 1989, No. 11, § 8a; 1991, No. 233 (Adj. Sess.), § 6; 1995, No. 25, §§ 2, 3; 1999, No. 53, § 13; 1999, No. 61, § 4; 1999, No. 158 (Adj. Sess.), §§ 14, 16; 2001, No. 29, § 11; 2005, No. 44, § 1; 2005, No. 197 (Adj. Sess.), § 7; 2007, No. 13, § 47; 2009, No. 24, § 12a; 2009, No. 139 (Adj. Sess.), § 9.

24 V.S.A. § 5065 Errors

5065. 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 1973, No. 251 (Adj. Sess.), § 3; amended 2017, No. 165 (Adj. Sess.), § 27.

24 V.S.A. § 5066 Exemption of member’s interest; assignment

5066. Exemption of member’s interest; assignment That portion of the salary or wages of a member deducted or to be deducted under this chapter, the right of a member to an annuity, pension, or retirement allowance hereunder, and all the member’s rights in the assets of the Retirement System, shall be exempt from taxation, except income tax, and from the operation of any laws relating to bankruptcy or insolvency, and shall not be attached or taken upon execution or other process of any court. No assignment by a member of any part of the assets to which the member is or may be entitled, or of any right to or interest in those assets, shall be valid, except to the extent permitted by this chapter. Added 1973, No. 251 (Adj. Sess.), § 3; amended 2007, No. 13, § 48.

24 V.S.A. § 5066a Alternate payee; domestic relations orders

5066a. Alternate payee; domestic relations orders (a) As used in this section: (1) “Alternate payee” means any individual who is recognized by a domestic relations order as having a right to receive all, or a portion of, another individual’s payment rights in the System. (2) “Domestic relations order” means a judgment, decree, or order of the Family Division of the Superior Court issued pursuant to 4 V.S.A. chapter 10, concerning marital property rights that includes a transfer of all, or a portion of, a member’s or beneficiary’s payment rights in the System to an alternate payee. It also means a judgment, decree, or order from a court of competent jurisdiction in another state, concerning marital property rights that includes a transfer of all, or a portion of, a member’s or beneficiary’s payment rights in the System to an alternate payee. Domestic relations orders shall conform to the requirements of this section in order to be effective. A domestic relations order does not take effect until it is served on the System by certified or registered mail, return receipt requested. In the event that there is more than one domestic relations order, the order which is most recent in time and which has been served on the 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; and (4) each retirement plan to which the domestic relations order applies. (d) A domestic relations order shall not provide: (1) for a type or form of benefit, option, or payment not available to the affected member or beneficiary; (2) for an amount or duration of payment greater than that available to the affected member or beneficiary; (3) that payment of a retirement allowance commence before the member departs from service and commences to receive benefits; (4) withdrawal of the member’s contributions without the consent of the member and the alternate payee; or (5) any requirements that are contrary to the intent of this section. (e) A domestic relations order may provide for apportionment of post-retirement adjustments to the retirement allowance. (f) Payments to the alternate payee under a domestic relations order shall be limited to the life of the member or beneficiary. (g) An alternate payee’s rights and interests under this section shall not survive the alternate payee’s death and shall not be transferable by inheritance. (h) An alternate payee’s rights or interests acquired pursuant to this section are not subject to assignment, execution, garnishment, attachment, or other process. An alternate payee’s rights or interests may be modified only by a domestic relations order amending the domestic relations order that established the right or interest. (i) The Board, the System, its agents, and employees shall not be liable to any person for carrying out the terms and conditions of a domestic relations order. (j) The Board may adopt rules to implement this section. Added 1995, No. 36, § 10; amended 2009, No. 154 (Adj. Sess.), § 238.

24 V.S.A. § 5067 Postretirement adjustments to retirement allowances

5067. Postretirement adjustments to retirement allowances (a) For members, as of June 30 in each year, commencing June 30, 1987, a determination shall be made of the increase, to the nearest one-tenth of a percent of the Consumer Price Index for the preceding fiscal year. The retirement allowance of each beneficiary in receipt of an allowance for at least one year on the next following December 31 shall be increased by an amount equal to one-half of the percentage increase. The increase shall commence on the January 1 immediately following such December 31. The adjustment shall apply to members of the Group A, B, or D plans receiving an early retirement allowance only in the year following attainment of normal retirement age, provided the member has received benefits for at least 12 months as of December 31 of the year preceding any January adjustment. The maximum adjustment of any retirement allowance resulting from any such determination shall be two percent for Group A members and three percent for Group B, C, and D members, and no retirement allowance shall be reduced below the amount payable to the beneficiary without regard to the provisions of this section. (b) For purposes of this section, Consumer Price Index shall mean 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. (c) No adjustment shall be made pursuant to this section in a deferred vested allowance payable pursuant to subsection 5059(a) of this title prior to its commencement. (d) For all members of Group A and Group B, who have retired prior to July 1, 1987, there is hereby granted on July 1, 1989 a cost of living adjustment to each member’s retirement allowance equal to two percent for each year of retirement prior to July 1, 1987 but not to exceed a total adjustment greater than ten percent. (e) No adjustment shall be made pursuant to this section in January if the Consumer Price Index as of the previous June 30th is a negative rate. Added 1987, No. 39, § 9; amended 1989, No. 11, § 9; 1991, No. 233 (Adj. Sess.), § 7; 1999, No. 61, § 5; 2005, No. 197 (Adj. Sess.), § 8; 2009, No. 139 (Adj. Sess.), § 10a; 2011, No. 63, § H.3.

24 V.S.A. § 5068 Election

5068. Election (a) Subject to the provisions of subsections (b) and (c) of this section, all employees shall be members of Group A, unless an election to become a member of Group B, C, or D is made pursuant to this section or, in the case of Group B or C, unless a collective bargaining agreement negotiated pursuant to 21 V.S.A. chapter 22 so specifies. (b) On or before September 30 of any year, the legislative body of a municipality may designate groups of employees eligible to become members of Group B or C. Such designation may apply to all eligible employees or to one or more of the following groups of employees: (1) sworn police officers appointed under chapter 55 of this title or a comparable provision of a municipal charter; (2) firefighters and officers of fire departments appointed under chapter 57 of this title or a comparable provision of a municipal charter; (3) other groups of employees that have a similarity of interests, needs, and general conditions of employment, as determined by the legislative body. (c) On or before September 30 of any year, the legislative body of a municipality may designate groups of employees eligible to become members of Group D. The designation may apply to one or more of the following groups of employees: (1) sworn police officers appointed under chapter 55 of this title or a comparable provision of a municipal charter; (2) firefighters and officers of fire departments appointed under chapter 57 of this title or a comparable provision of a municipal charter; (3) emergency medical personnel as defined in 24 V.S.A. § 2651. (d) On or before any December 31 following a designation under subsection (b) or (c) of this section, individual employees so choosing shall become members of Group B, C, or D effective the July 1 immediately following, and all employees subsequently hired into that designated group shall become members of the group designated. However, for employees making such an election on or after December 31, 1993, unless such an election shall be made on the December 31 immediately following the designation made pursuant to subsection (b) or (c) of this section, a member must complete three years of creditable service as a member of the group designated in subsection (b) or (c) of this section to be eligible to retire as a member of that group. (e) The designation by the legislative body or the municipality, as appropriate, an election to become members of Group B, C, or D, or entry into Group B or C pursuant to a collective bargaining agreement, shall be irrevocable and shall apply so long as the employee remains in the designated employee group, except that a designation and election to Group B may be superseded by similar actions allowing participation in Group C and that a designation and election to Group B or C may be superseded by similar actions allowing participation in Group D. (f) Upon written request from the legislative body, the Board may waive the requirements that the actions required in subsections (b), (c), and (d) of this section be completed by the dates specified, if it determines that all membership enrollment requirements can be completed in time for membership to be effective on July 1. (g) Any employer who is a member of Group C as of June 30, 1995 may revoke Group C membership during the period that begins on July 1, 1995 and ends on March 31, 1996. Any employee who is a member of Group C as of June 30, 1995 may revoke Group C membership during the period that begins on July 1, 1995 and ends on June 30, 1996. If no election is made during these periods, Group C will be the designated group. An election under this subsection is irrevocable. (1) Any employee may retain Group C membership regardless of the employer’s election. (2) An employee or employer who revokes Group C membership shall return to the group of membership just prior to becoming a Group C member, provided that an employee or employer who was a member of Group A prior to becoming a Group C member may elect to return to Group A or become a member of Group B, if offered by the employer. In the absence of a prior group, any group offered by the employer shall be the designated group. (3) Any employee who elects to revoke Group C membership under this subsection shall be entitled to a refund. The refund shall be an amount equal to the contributions made as a Group C member under subsection (b) of section 5064 of this title in excess of the contribution the member would have made had he or she not transferred to Group C, plus the accumulated interest. (4) The procedure for election under this subsection shall be established by the Board. The Board shall establish the date of election, and provide all members with at least 30-days’ advance notice of the election together with a general written explanation of the election and its consequences, including an individual comparison of projected benefits at no cost to the member. Added 1987, No. 39, § 10; amended 1991, No. 233 (Adj. Sess.), § 8, eff. May 28, 1992; 1995, No. 25, § 4; 1999, No. 61, § 6; 2005, No. 197 (Adj. Sess.), § 9; 2019, No. 25, § 3, eff. May 16, 2019.

24 V.S.A. § 5069 Insurance

5069. Insurance (a) The Board may enter into insurance arrangements to provide health and medical benefits for retired members and their dependents. The Board may enter into insurance arrangements to provide dental coverage for retired members and their dependents, provided the municipalities or the System has no legal obligation to pay any portion of the dental benefit premiums. (b) The Board may, to the extent that it may be funded as described in this subsection, establish an uninsured program for the reimbursement of certain health care costs of retired members and their dependents pursuant to the following: (1) Benefits under an uninsured program shall be funded by redirecting a portion of contributions from employers. Employer contributions shall only be so redirected to the extent that those contributions offset an existing actuarially determined surplus with respect to the actuarial cost method and funding adopted by the Board. The Board may establish a trust to hold and invest employer contributions and to pay the benefits and administrative expenses of the program. The benefits or administrative expenses of this program shall not be paid from the Annuity Fund, the Pension Fund, or the Expense Fund. (2) The Board shall have the discretion to determine the method for allocating the fund balance to retired members; provided, however, that the aggregate benefits payable under this program may not exceed the aggregate contributions made by employers and earnings, if any, on those contributions. Prior to July 1 of each year, the Board shall notify each retired member of the amount available for reimbursement over the succeeding 12 months and the procedures by which the retired member or dependent may request reimbursement. (3) Retired members and their dependents shall be required to provide substantiation of their health care expense claims to the extent required by the Internal Revenue Service for tax-favored treatment of their reimbursements. The Board may enter into an agreement with a third party administrator to process the expense claims of retired members and their dependents. (c) As an alternative to providing health care insurance, the Board, in its discretion, may assist retired members of the System with the cost of health care by authorizing payment of a health care stipend to retired members in an amount to be determined by the Board. In the event the Board determines to provide such a stipend, it shall annually review the stipend, in consultation with the actuary designated pursuant to subsection 5062(j) of this title, and determine whether to continue to provide the stipend and the amount to be paid. If authorized by the Board, a stipend shall be paid in 12 monthly installments commencing on July 1 of that year. Added 1991, No. 233 (Adj. Sess.), § 9; amended 1999, No. 158 (Adj. Sess.), § 15; 2005, No. 197 (Adj. Sess.), § 10; 2009, No. 24, § 13.

24 V.S.A. § 5070 Defined contribution retirement plan

5070. Defined contribution retirement plan (a) The Board may approve a defined contribution retirement plan for one or more groups of members. The plan shall qualify as a defined contribution plan under the U.S. Internal Revenue Code, as amended. Participation in a defined contribution plan offered under this section shall be in lieu of participation in any other plan established under this title. The Board shall ensure that objective educational material be prepared and presented to the employees in order to enable them to make an informed decision, under the assumption that each participant is an unsophisticated investor. (b) 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 for employees participating in the defined contribution plan, and each of those amounts shall be paid into the defined contribution fund and credited to the individual account of the member from whose compensation the deduction was made. (1) Employer reports and corresponding member contributions required by this subsection shall be provided by the due date established by the Board. An employer that provides reports or remits 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. (2) Employers shall provide accurate reports. An employer who provides an inaccurate report shall be responsible for correcting any deficiencies and shall reimburse the System for any costs incurred by the System as a result of inaccuracy. (3) 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. (4) The System may enforce the provisions of this subsection in Washington Superior Court. (5) The Board may, in its discretion, waive part or all of a penalty assessment for good cause shown. Added 1999, No. 53, § 14; amended 2007, No. 13, § 49.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/24/125Fetched: 10/21/2026