Vermont § 1944 - Vermont Teachers’ Retirement Fund

§ 1944. Vermont Teachers’ Retirement Fund

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