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NO. 61. AN ACT RELATING TO THE MUNICIPAL EMPLOYEES' RETIREMENT SYSTEM AND A SEPARATE RETIREMENT GROUP FOR PUBLIC SAFETY OFFICERS.

(S.140)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. 24 V.S.A. § 5051 is amended to read:

§ 5051. DEFINITIONS

As used in this chapter:

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(4) "Average final compensation" means, for a group A member, the average annual earnable compensation of a member during the 60 consecutive months of creditable service during which his or her earnable compensation was the highest, or if he or she has less than 60 months of creditable service, it shall mean his or her average annual earnable compensation during his or her total creditable service. For a group B or C member, the term means the average annual earnable compensation of a member during the 36 consecutive months of creditable service during which his or her earnable compensation was the highest, or if he or she has less than 36 months of creditable service, it shall mean his or her average annual earnable compensation during his or her total creditable service. For a group D member, the term means the average annual earnable compensation of a member during the 24 consecutive months of creditable service during which his or her earnable compensation was the highest, or if he or she has less than 24 months of creditable service, it shall mean his or her average annual earnable compensation during his or her total creditable service.

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(10) "Employee" means the following persons employed on a regular basis by a school district for not less than 1,040 hours in a year and for not less than 30 hours a week for the school year, as defined in section 1071 of Title 16, or persons employed on a regular basis by a municipality other than a school district for not less than 1,040 hours in a year and for not less than 24 hours per week, including persons employed in a library or museum at least half of whose operating expenses are met by municipal funds:

(A) "Group A member" means a person employed by a participating municipality who does not elect to become a group B *[or]*, 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.

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(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.

*[(D)]*(E) The retirement board shall determine any question as to whether a person is an employee as defined in this chapter. Employee does not include persons eligible for inclusion under the provisions of Chapter 55 of Title 16.

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(15) "Normal retirement date"

(A) "Normal retirement date" for group A members means the first day of the calendar month next following the attainment of age sixty-five and the completion of five years of creditable service, whichever is later.

(B) "Normal retirement date" for group B members means the first day of the calendar month next following the attainment of age 62 and the completion of five years of creditable service.

(C) "Normal retirement date" for group C and D members means the first day of the calendar month next following the attainment of age 55 and the completion of five years of creditable service.

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Sec. 2. 24 V.S.A. § 5054(g) is amended to read:

(g) The board may enter into a prior service purchase agreement with any group B member who has participated in group A, *[or]* a group C member who has participated in group A or B for service in that group or a group D member who has participated in group A, B or C for service in one of those groups. The purchase shall follow the procedure set forth in subsection (f) of this section.

Sec. 3. 24 V.S.A. § 5055 is amended to read:

§ 5055. NORMAL AND EARLY RETIREMENT

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(b) Normal retirement allowance. Upon normal retirement, all members shall receive a normal retirement allowance which shall be equal to one percent of his or her average final compensation multiplied by the number of years of creditable service prior to July 1, 1975 and one and one-tenth percent of his or her average final compensation multiplied by the number of years of creditable service after June 30, 1975 and prior to July 1, 1987. For service on July 1, 1987, and, thereafter, a group A member shall receive a normal retirement allowance which 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; 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, 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 50 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, and that earned as a member of group B, if any, 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 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, 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, 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.

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(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 shall, upon early retirement, receive an early retirement allowance which shall be equal to the normal retirement allowance at age 55, but without reduction for group D service.

Sec. 4. 24 V.S.A. § 5064(b) is amended to read:

(b) Annuity savings fund. The annuity savings fund shall be the fund in which shall be accumulated contributions deducted from the compensation of members. 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 (f) of section 5068 of this title, the rate established above 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. All or any part of contributions required to be made by members under this section may be made on behalf of the members by the employer. 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.

Sec. 5. 24 V.S.A. § 5067(a) is amended to read:

(a) For members, as of June 30 in each year, commencing June 30, 1987, a determination shall be made of the increase or decrease, 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 31st shall be increased or decreased, as the case may be, by an amount equal to one-half of the percentage increase or decrease. The increase or decrease shall commence on the January 1st immediately following such December 31st. The adjustment shall apply to members receiving an early retirement allowance only in the year following attainment of age 62, 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 *[and]*, 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.

Sec. 6. 24 V.S.A. § 5068 is amended to read:

§ 5068. ELECTION

(a) *[All]* Subject to the provisions of subsection (c) of this section, all employees shall be members of group A, unless an election to become a member of group B *[or]*, 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 chapter 22 of Title 21 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 which 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, a municipality, at an annual or special meeting warned for the purpose, may designate groups of employees eligible to become members of group D. Such 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 18 V.S.A. § 902(6).

*[(c)]*(d) On or before any December 31 following a designation under subsection (b) or (c) of this title, individual employees so choosing shall become members of group B *[or]*, 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. *[(d)]*(e) The designation by the legislative body or the municipality, as appropriate, an election to become members of group B *[or]*, 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. *[(e)]*(f) Upon written request from the legislative body, the board may waive the requirements that the actions required in subsections (b) *[and]*, (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. *[(f)]*(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.

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Sec. 7. 24 V.S.A. § 5056(c) is added to read:

(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.

Sec. 8. 24 V.S.A. § 5061a is added to read:

§ 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 wilful 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.

Sec. 9. 24 V.S.A. § 5061b is added to read:

§ 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.

Approved: June 1, 1999