§473. Funds

Link to law: http://legislature.vermont.gov/statutes/section/03/016/00473
Published: 2015

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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.)
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