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Introduced by   Committee on Government Operations


Subject:  Municipal government; municipal employees; retirement

Statement of purpose:  This bill proposes to make adjustments to the municipal employees’ retirement system of Vermont by maintaining the municipal employee contribution rate for an additional five years and by providing the retirement board greater flexibility to provide health care coverage for municipal retirees.


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

Sec. 1.  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.  Notwithstanding the provisions of this subsection, for the period July 1, 2000 through June 30, 2005 June 30, 2010, contributions shall be made by group A members at the rate of two and one-half percent of earnable compensation, by group B members at the rate of four and one-half percent of earnable compensation, and by group C members at the rate of nine percent of earnable compensation.

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Sec. 2.  24 V.S.A. § 5069 is amended to read:


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(b)  The board may establish an uninsured program for the reimbursement of certain health care costs of retired members and their dependents pursuant to the following:

(1)  Benefits under an uninsured program shall be funded by contributions from employers at a rate established by the board.  The board may establish a trust to hold and invest employer contributions and to pay the benefits and administrative expenses of the program.  The benefits or administrative expenses of this program shall not be paid from the annuity fund, the pension fund, or the expense fund.  

(2)  The board shall have the discretion to determine the method for allocating the fund balance to retired members; provided, however, that the aggregate benefits payable under this program may not exceed the aggregate contributions made by employers, and earnings, if any, on those contributions.  Prior to July 1 of each year, the board shall notify each retired member of the amount available for reimbursement over the succeeding 12 months, and the procedures by which the retired member or dependent may request reimbursement.

(3)  Retired members and their dependents shall be required to provide substantiation of their health care expense claims to the extent required by the Internal Revenue Service for tax-favored treatment of their reimbursements.  The board may enter into an agreement with a third party administrator to process the expense claims of retired members and their dependents.

(4)  The board may terminate this program at any time.  Any assets that remain after the satisfaction of all benefit claims and expenses shall be distributed in accordance with the terms of the trust, or if there is no trust, shall be returned to the employers.

(b)(c)  As an alternative to providing health care insurance, the board, in its discretion, may assist retired members of the system with the cost of health care by authorizing payment of a health care stipend to retired members in an amount to be determined by the board.  In the event the board determines to provide such a stipend, it shall annually review the stipend, in consultation with the actuary designated pursuant to subsection 5052(j) of this title, and determine whether to continue to provide the stipend and the amount to be paid.  If authorized by the board, a stipend shall be paid in 12 monthly installments commencing on July 1 of that year.

Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont