Vermont § 1943a - Compliance with federal law

§ 1943a. 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 that 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 will 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. (k) Nonvested members; 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 62 years
  of age, 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) Rulemaking. The Board may adopt rules to ensure that this chapter complies with federal law requirements. (Added 2007, No. 13, § 32; amended 2009, No. 24, § 6; 2015, No. 18, § 5; 2017, No. 165 (Adj. Sess.), § 17; 2019, No. 131 (Adj. Sess.), § 86.)