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The Vermont Statutes Online
Title
03
:
Executive
Chapter
016
:
VERMONT EMPLOYEES RETIREMENT SYSTEM
Subchapter
001
:
GENERALLY
§
473. Funds
(a) All of the
assets of the Retirement System shall be credited to the Vermont State
Retirement Fund.
(b) Member
contributions.
(1)
Contributions deducted from the compensation of members together with any
member contributions transferred thereto from the predecessor systems shall be
accumulated in the Fund and separately recorded for each member. The amounts so
transferred on account of group A members shall be allocated between regular
and additional contributions. The amounts so allocated as regular contributions
shall be determined as if the rate of contribution of four percent has been
continuously in effect in the predecessor system from which such amounts were
transferred and the balance of any amount so transferred on account of any group
A member shall be deemed additional contributions. In the case of group C
members who were members as of the date of establishment and D members, all
contributions transferred from predecessor systems shall be deemed regular
contributions. Those members who, prior to the date of establishment of this
system, had been contributing at a rate less than four percent shall have any
benefit otherwise payable on their behalf actuarially reduced to reflect such
prior contribution rate of less than four percent. Upon a member's retirement
or other withdrawal from service on the basis of which a retirement allowance
is payable, the member's additional contributions, with interest thereon, shall
be paid as an additional allowance equal to an annuity which is the actuarial
equivalent of such amount, in the same manner as the benefit otherwise payable
under the system.
(2)
Contributions shall be made on and after the date of establishment at the rate
of 6.3 percent of compensation for each group A, D, and F member and at a rate
of 8.18 percent of compensation for each group C member. For the period of July
1, 2011 through June 30, 2016, should the annual value of the total increased
contributions of group C, D, and F member contributions exceed $5,300,000.00 on
an aggregate basis, any amount in excess of $5,300,000.00 shall remain in the
Retirement System and the State's contribution shall not be reduced by the
amount in excess of $5,300,000.00. Commencing July 1, 2016 or when the State
Employees' Retirement System has been determined by the actuary to have assets
at least equal to its accrued liability, whichever occurs first, contributions
shall be five percent of compensation for group A, D, and F members and 6.88
percent of compensation for group C members. Commencing July 1, 2019, the rate
of contribution applicable to all active group F members shall be 4.75 percent
of compensation. In determining the amount earnable by a member in a payroll
period, the Retirement Board may consider the annual or other periodic rate of
earnable compensation payable to such member on the first day of the payroll
period as continuing throughout such payroll period, and it may omit deduction
from compensation for any period less than a full payroll period if an employee
was not a member on the first day of the payroll period, and to facilitate the
making of deductions it may modify the deduction required of any member by such
an amount as, on an annual basis, shall not exceed one-tenth of one percent of
the annual earnable compensation upon the basis of which such deduction is to
be made. Each of the amounts shall be deducted until the member retires or
otherwise withdraws from service, and when deducted shall be paid into the
Annuity Savings Fund, and shall be credited to the individual account of the
member from whose compensation the deduction was made.
(3) The
deductions provided for herein shall be made notwithstanding that the minimum
compensation provided for by law for any member shall be reduced thereby. Every
member shall be deemed to consent and agree to the deductions made and provided
herein and shall receipt for full compensation, and payment of compensation
less such deduction shall be a full and complete discharge and acquittance of
all claims and demands whatsoever for the services rendered by such person
during the period covered by such payment, except as to the benefits provided
under this subchapter.
(4) Subject to
the approval of the Retirement Board, in addition to the contributions deducted
from compensation as hereinbefore provided, any member may redeposit in the
fund by a single payment or by an increased rate of contribution an amount
equal to the total amount which the member previously withdrew from this system
or one of the predecessor systems; or any member may deposit therein by a
single payment or by an increased rate of contribution an amount computed to be
sufficient to purchase an additional annuity which, together with prospective
retirement allowance, will provide for the member a total retirement allowance
not in excess of one-half of average final compensation at normal retirement
date, with the exception of group D members for whom creditable service shall
be restored upon redeposits of amounts previously withdrawn from the system, or
for whom creditable service shall be granted upon deposit of amounts equal to
what would have been paid if payment had been made during any period of service
during which such a member did not contribute. Such additional amounts so
deposited shall become a part of the member's accumulated contributions as
additional contributions.
(5) The
contributions of a member and such interest as may be allowed thereon which are
withdrawn by the member or paid to the member estate or to a designated
beneficiary in event of the member's death, shall be paid from the fund.
(6)
Contributions required under this subsection shall be limited to contributions
from group A, group C, group D, and group F members.
(7) Repealed.]
(c) Employer
contributions, earnings, and payments.
(1) Employer contributions
and the reserves for the payment of all pensions and other benefits, including
all interest and dividends earned on the assets of the Retirement System shall
be accumulated in the Fund, and all benefits payable under the system and the
expenses of the system shall be paid from the Fund. Annually, the Retirement
Board shall allow regular interest on the individual accounts of members in the
Fund which shall be credited to each member's account within the Fund.
(2) Beginning
with the actuarial valuation as of June 30, 2006, the contributions to be made
to the Fund by the State shall be determined on the basis of the actuarial cost
method known as "entry age normal." On account of each member there
shall be paid annually into the Fund by the State an amount equal to certain
percentages of the annual earnable compensation of such member, to be known as
the "normal contribution," and additional amounts equal to a certain
percentage of the member's annual earnable compensation, to be known as the
"basic accrued liability" and "additional accrued
liability" contributions. The percentage rates of the contributions shall
be fixed on the basis of the liabilities of the Retirement System as shown by
actuarial valuation.
(3) The normal
contribution shall be the uniform percentage of the total compensation of
members which, if contributed over each member's prospective period of service
and added to such member's prospective contributions, if any, will be
sufficient to provide for the payment of all future benefits after subtracting
the sum of the unfunded accrued liability and the total assets of the Fund of
the Retirement System.
(4) Until the
unfunded accrued liability is liquidated, the basic accrued liability
contribution shall be the annual payment required to liquidate the unfunded
accrued liability over a period of 30 years from July 1, 2008, provided that
the amount of each annual basic accrued liability contribution after June 30,
2009, shall be five percent greater than the preceding annual basic accrued
liability contribution. Any variation in the contribution of normal, basic,
unfunded accrued liability or additional unfunded accrued liability
contributions from those recommended by the actuary and any actuarial gains and
losses shall be added or subtracted to the unfunded accrued liability and
amortized over the remainder of the 30-year period.
(5) Repealed.]
(6), (7)
Repealed.]
(d)
Contributions of State. As provided by law, the Retirement Board shall certify
to the Governor or Governor-Elect a statement of the percentage of the payroll
of all members sufficient to pay for all operating expenses of the Vermont
State Retirement System and all contributions of the State which will become
due and payable during the next biennium. The contributions of the State shall
be charged to the departmental appropriation from which members' salaries are
paid and shall be included in each departmental budgetary request.
(e) Repealed.]
(f)
Contributions paid by State. Notwithstanding the provisions of subdivision
(b)(2) of this section to the contrary and pursuant to the provisions of
Section 414(h) of the Internal Revenue Code, the State shall pick up and pay
the contributions required to be paid by members with respect to service
rendered on and after March 1, 1998. Contributions picked up by the State shall
be designated for all purposes as member contributions, except that they shall
be treated as State contributions in determining tax treatment of a
distribution. Each member's compensation shall be reduced by an amount equal to
the amount picked up by the State. This reduction, however, shall not be used
to determine annual earnable compensation for purposes of determining average
final compensation. Contributions picked up under this subsection shall be
credited to the Fund. To ensure that the provisions of this subsection are cost
neutral to the State, the contributions rates established under subdivision
473(b)(2) of this title shall be increased by one-tenth of one percent of
compensation. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1981, No. 41, §§
17-19, 39(1); 1989, No. 78, § 7; 1989, No. 277 (Adj. Sess.), §§ 17r, 17w(a),
eff. Jan. 1, 1991; 1993, No. 33, § 5; 1997, No. 68 (Adj. Sess.), § 7, eff.
March 1, 1998; 1997, No. 89 (Adj. Sess.), § 10; 1997, No. 89 (Adj. Sess.), §
13, eff. April 13, 1998; 1999, No. 158 (Adj. Sess.), § 19; 2003, No. 122 (Adj.
Sess.), § 297h; 2005, No. 215 (Adj. Sess.), § 277a; 2007, No. 12, § 1; 2007,
No. 13, § 11; 2007, No. 116 (Adj. Sess.), §§ 4, 5, eff. June 7, 2008; 2009, No.
24, § 4a; 2011, No. 63, § H.4.)