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NO. 29. AN ACT RELATING TO ADJUSTMENTS TO THE STATE EMPLOYEES’, TEACHERS’, AND MUNICIPAL EMPLOYEES’ RETIREMENT SYSTEMS.

(H.494)

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

Sec. 1. 3 V.S.A. § 458(e) is amended to read:

§ 458. CREDITABLE SERVICE; MILITARY SERVICE

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(e) Credit shall also be granted for any period of absence from service *[in connection with a national emergency]* certified by the commissioner of the member’s department, or if the office of the member is not overseen by a commissioner, then the head of the member’s department, due to any class of military *[or naval]* service approved by the retirement board, *[whether before or after the date of establishment]* provided the employee returns to the service of the state within *[ninety]* 90 days after having become discharged or separated from such military *[or naval]* service, as if such service had been service as an employee of the state. The earnable compensation of the employee at the time of entering such military *[or naval]* service shall be deemed to be the earnable compensation for the period of such service.

Sec. 2. 3 V.S.A. § 477a(a) is amended to read:

§ 477a. ELECTIONS

(a) Any member who has rendered 15 years of creditable 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 or one full year of full-time service as a member of the Cadet Nurse Corps in World War II, the Peace Corps or VISTA for which the member has derived no military 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 or VISTA service not exceeding five years. Any member who so elects shall deposit in the annuity savings fund by a single contribution the amount or amounts determined by the system’s actuary to be cost neutral to the system. Notwithstanding the provisions of this subsection, any 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 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 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. The provisions of this subsection shall also be available to state employees who are not members of the classified system and who elect to participate in the defined contribution retirement plan under chapter 16A of this title. 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 United States Code shall control.

Sec. 3. STATE EMPLOYEES’ SYSTEM; BENEFICIARIES;

OPPORTUNITY TO PURCHASE OR BE GRANTED CREDIT

FOR MILITARY SERVICE

Any beneficiary who retired prior to July 1, 2001 and who, prior to retirement, would have been otherwise eligible for a grant of military service credit or to purchase military service credit under section 477a of this title, but for the prohibition in that section against counting the same full-time military service toward both military and state pensions, may apply to the retirement board for such grant of credit or for the opportunity to purchase such credit and for an adjustment to the beneficiary’s retirement allowance as a result of the purchase or grant of service, provided that such beneficiary is entitled to receive such treatment under the terms of 10 U.S.C. § 12736. Upon a determination that the beneficiary was eligible prior to retirement for a grant of military service credit or the purchase of credit, the board shall grant the credit, or allow the purchase of credit and make appropriate adjustments to the beneficiary’s retirement allowance retroactive to the date of retirement.

Sec. 4. 16 V.S.A. § 1936(d) is amended to read:

§ 1936. CREDITABLE SERVICE; MILITARY SERVICE

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(d) Credit shall also be granted for any period of absence from service *[in connection with a national emergency]* due to any class of military *[or naval]* service of the United States approved by the retirement board, provided the member returns to service as a teacher as defined under section 1931 of this title within *[eighteen months]* 90 days after having become discharged or separated from military *[or naval]* service, as if such service had been service as a teacher. *[A member shall not be granted credit for the purposes of the retirement system after July 1, 1977 during any period of absence due to military or naval service if he has a vested right to retirement benefits based upon that service.]* The earnable compensation of the teacher at the time of entering such military service shall be deemed to be the earnable compensation for the period of such service.

Sec. 5. 16 V.S.A. § 1941(b)(2) is amended to read:

§ 1941. OPTIONAL BENEFITS

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(b) A retirement allowance shall be payable to the eligible surviving beneficiary, if any, following the death of a:

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(2) group C member who had attained age 55 and completed *[10]* five years of creditable service; or had not attained age 55 and completed 20 years of creditable service.

Sec. 6. 16 V.S.A. § 1944(b)(8) is amended to read:

(8) Any group A or group C member who has rendered *[fifteen]* 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 or VISTA 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 or Cadet Nurse Corps or Peace Corps or VISTA service not exceeding five years. Any group A member who elects credit under this subdivision shall deposit in the annuity savings fund by a single contribution an amount computed at regular interest to be sufficient to provide at age *[sixty]* 60 an annuity equal to one-one hundred and twentieth 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 annuity savings fund by a single contribution an amount computed at regular interest to be sufficient to provide at normal retirement an annuity equal to 1-2/3 percent 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 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 United States Code shall control.

Sec. 7. TEACHERS’ SYSTEM; BENEFICIARIES; OPPORTUNITY TO

PURCHASE OR BE GRANTED CREDIT FOR MILITARY

SERVICE

Any beneficiary who retired prior to July 1, 2001 and who, prior to retirement, would have been otherwise eligible for a grant of military service credit or to purchase military service credit under section 477a of this title, but for the prohibition in that section against counting the same full-time military service toward both military and state pensions, may apply to the retirement board for such grant of credit or for the opportunity to purchase such credit and for an adjustment to the beneficiary’s retirement allowance as a result of the purchase or grant of service, provided that such beneficiary is entitled to receive such treatment under the terms of 10 U.S.C. § 12736. Upon a determination that the beneficiary was eligible prior to retirement for a grant of military service credit or the purchase of credit, the board shall grant the credit or allow the purchase of credit and make appropriate adjustments to the beneficiary’s retirement allowance retroactive to the date of retirement.

Sec. 8. 24 V.S.A. § 5054 is amended to read:

§ 5054. CREDITABLE SERVICE

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(g) The board may enter into a prior service purchase agreement with any group B member who has participated in group A, 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, or an employer on behalf of a member as described in this subsection. The purchase made by a member shall follow the procedure set forth in subsection (f) of this section. The purchase made by an employer on behalf of a member shall be paid in equal annual installments over a specified period as determined by the board.

(h) Credit shall be granted for any period of approved absence from service due to any class of military service approved by the retirement board, provided the employee returns to service in the municipality within 90 days after having become discharged or separated from such military service, as if such service had been service as an employee of the municipality. The earnable compensation of the employee at the time of entering such military service shall be deemed to be the earnable compensation for the period of such service.

Sec. 9. 24 V.S.A. § 5054a is amended to read:

§ 5054a. ELECTIVE CREDITS

(a) Any member may elect to have included in the member’s creditable service, years of service as an employee of another municipality, as a state employee or as a teacher in a public or private school, as defined by the board. Any member who so elects shall deposit in the annuity savings fund by a single contribution the amount or amounts determined by the system’s actuary to be cost neutral to the system. No application for credit under this subsection 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.

(b) Any member who has rendered 15 years of creditable 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 or one full year of full-time service as a member of the Cadet Nurse Corps in World War II, the Peace Corps, or VISTA for which the member has derived no military 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, or VISTA service not exceeding five years. Any member who so elects shall deposit in the annuity savings fund by a single contribution the amount or amounts determined by the system’s actuary to be cost-neutral to the system. 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 United States Code shall control.

Sec. 10. 24 V.S.A. § 5055(b) is amended to read:

(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 up to a maximum of 60 percent of average final compensation; 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, up to a maximum of 60 percent of average final compensation, 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 60 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, up to a maximum of 60 percent of average final compensation, and that earned as a member of group B, if any, up to a maximum of 60 percent of average final compensation, 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 B member who is hired on or after July 1, 1999 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 normal retirement allowance earned as a member of group B. 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, up to a maximum of 60 percent of average final compensation, 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, up to a maximum of 60 percent of average final compensation, 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.

Sec. 11. 24 V.S.A. § 5064(c)(6) is amended to read:

(6) The retirement board shall have performed a separate actuarial valuation for each group entering the system under the provisions of subsection 5054(e) of this title to determine the amount of liability, the deposit required to fund that liability, and the amount of increased rate of contribution required to fund the liability not covered by any lump sum deposit, such rate to be calculated by the actuary as the excess, if any, of the accrued liability contribution rate of subsection (c)(3) of this section determined separately for the group entering the system over such rate for the system, calculated excluding such group. Such additional rate shall be paid by the entering group *[over the remaining accrued liability period for the system as established by subdivision (c)(3)]* over a specified period as determined by the board, not to exceed 30 years. The rate determined as a result of the actuarial calculation under this subdivision shall be paid by each employer entering the system under subsection 5054(e) in addition to the amount paid in accordance with subdivision (c)(4) of this section.

Sec. 12. ONE-TIME STIPEND FOR MILITARY SERVICE

(a) Upon application to, and approval by, the board of trustees of the Vermont State Retirement System, beneficiaries of the state retirement system who retired prior to July 1, 1999 shall be entitled to a one-time stipend of $500.00 for each year, up to a maximum of three years, of military service during the periods June 25, 1950 through January 31, 1955 and August 5, 1964 through May 7, 1975, provided the beneficiary had rendered 15 years of creditable service at the time of retirement and, prior to becoming a member, served a minimum of one full year of full-time service in the military for which the beneficiary has derived no military pension benefits.

(b) Upon application to, and approval by, the board of trustees of the State Teachers’ Retirement System of Vermont, beneficiaries of the teachers’ retirement system shall be entitled to a one-time stipend of $500.00 for each year, up to a maximum of three years, of military service, provided the beneficiary had rendered 15 years of creditable service at the time of retirement and, prior to becoming a member, served a minimum of one full year of full-time service in the military for which the beneficiary has derived no military pension benefits, and was:

(1) a member of Group A and retired prior to July 1, 1995, and served in the military between June 25, 1950 and January 31, 1955 or between August 5, 1964 and May 7, 1975; or

(2) a member of Group B and retired prior to July 1, 1983, and served in the military between August 5, 1964 and May 7, 1975; or

(3) a member of Group B or Group C and retired prior to July 1, 1992, and served in the military between June 25, 1950 and January 31, 1955.

(c) Upon application to, and approval by, the board of trustees of the Vermont State Retirement System or the board of trustees of the State Teachers’ Retirement System of Vermont, beneficiaries of the state retirement system or beneficiaries of the teachers’ retirement system shall be entitled to a one-time stipend of $500.00 for each year, up to a maximum of three years, of military service during the periods December 7, 1941 through December 31, 1946, provided the beneficiary had rendered 15 years of creditable service at the time of retirement and, prior to becoming a member, served a minimum of one full year of full-time service in the military for which the beneficiary has derived no military pension benefits.

(d) 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 United States Code shall control. For purposes of determining the amount of the stipend available to each eligible beneficiary, partial years of military service shall be prorated as a proportionate amount of the value of a full year of service.

(e) Stipends payable under this section shall be payable from the respective pension accumulation funds of the Vermont State Retirement System and the State Teachers’ Retirement System of Vermont.

(f) Applications under this section must be received by the respective board of trustees no later than June 30, 2002. On or before July 15, 2002, the state treasurer shall distribute stipends as approved by the respective boards of trustees.

Approved: May 21, 2001