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BILL AS PASSED HOUSE AND SENATE 2007-2008

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H.883

AN ACT RELATING TO MISCELLANEOUS AMENDMENTS TO VERMONT’S PUBLIC RETIREMENT SYSTEMS

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

Sec. 1.  3 V.S.A. § 455(a)(2) is amended to read:

(2 ) “Actuarial equivalent” shall mean a benefit of equal value when computed at regular interest upon the basis of the mortality tables under the actuarial assumptions last adopted by the retirement board under subsection 472a(h) of this title.

Sec. 2.  3 V.S.A. § 465 is amended to read:

§ 465.  TERMINATION OF SERVICE; ORDINARY DEATH BENEFIT

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(c)  If a group A, group D, or group F member dies in service after becoming eligible for early retirement or after completing 20 10 years of creditable service, a retirement allowance will be payable to the member’s designated dependent beneficiary during his or her life.  If the designated dependent beneficiary so elects, however, the return of the member’s accumulated contributions shall be made in lieu thereof.

(d)  If a group D member dies in service after reaching his or her normal retirement date or after completing 12 years of creditable service, a retirement allowance will be payable to the member’s dependent beneficiary during his or her life.  If the dependent beneficiary so elects, however, the return of the member’s accumulated contributions shall be made in lieu thereof.

(e)  If a group C member dies in service after reaching his or her normal retirement date or after completing 20 10 years of creditable service, a retirement allowance will be payable to the member’s dependent spouse during her or his life, or if there be no dependent spouse, or if the dependent spouse dies before the youngest child of the deceased member has attained age 18, age 23 in the case of a dependent student, then to the member’s child or children under said age until the youngest of such children attains such age, divided in such manner as the retirement board in its discretion shall determine provided that the total annual payments to all such children shall not exceed the retirement allowance which would have been payable to the dependent spouse. If a member leaves no dependent spouse or child under such age upon his or her death, then a retirement allowance may be payable at the discretion of the retirement board to his or her dependent parent or parents provided that the total allowance payable shall not exceed the retirement allowance which would have been payable to the dependent spouse.  In the case of the payment of a retirement allowance under this section to a child of a deceased group C member who is a dependent student, the retirement allowance shall continue while such child remains a dependent student until he or she attains age 23.

(f)(e)  Unless the designated dependent beneficiary elects to receive payment of a deceased member’s accumulated contributions as provided under subsection (c) of this section, the retirement allowance payable to the designated dependent beneficiary of a deceased group A, group D, or group F member under this section shall be equal to the retirement allowance that would have been payable had the member elected option 3 and retired on the member’s date of death.  In the case of a member who has not attained the normal retirement date as of his or her date of death, the retirement allowance shall be computed on the basis of a disability retirement allowance or an early retirement allowance, whichever provides the greater benefit to the dependent beneficiary.  If the deceased member has no eligible dependent beneficiary, the member’s accumulated contributions shall be payable in accordance with the provisions of subsection (b) of this section.

(g)(f)  The retirement allowance payable under this section to a dependent spouse of a group C member who dies prior to normal retirement date shall be an allowance which will, when added to his or her survivor’s insurance benefit, be equal to 70 percent of the retirement allowance which would have been payable to the deceased member had he or she retired on a normal or early retirement allowance, as the case may be, but without actuarial equivalent modification, on the date of the member’s death plus ten percent of his or her average final compensation for each dependent child of the deceased member, not in excess of three, who has not attained age 18 or, if a dependent student, has not attained age 23.  Where, pursuant to this section, a retirement allowance is payable to a child or parent eligible for a survivor’s insurance benefit, the allowance payable under this subsection shall be inclusive of such person’s survivor’s insurance benefit.

(h)(g)  The provisions of subsections (b), (c), (d), (e), (f), and (g) of this section shall not apply if benefits are payable under section 464 of this title.

(i)(h)  The provisions of subsections (e) and (g) of this section shall be retroactive to November 5, 1969 only for the account of George R. Dearborn, deceased.

(j)(i)  Any reduced retirement allowance payable during the life of the retired member, with a provision that it shall continue after his or her death for the life of the member’s beneficiary, shall be determined as actuarial equivalents of the retirement allowance under subdivision (a)(1) of this section.  Any member who elects to receive such a retirement allowance may elect to receive a benefit further reduced actuarially as prescribed by the board with the added provision that, should the retired member survive his or her nominated beneficiary, the retirement allowance which would have been payable under subdivision (a)(1) shall be paid to the retired member during the remainder of his or her lifetime.  If a member does not make an election as to the form of his or her retirement allowance, he or she shall receive his or her retirement allowance under the provisions of subdivision (a)(1).

Sec. 3.  3 V.S.A. § 495(c) and (d) are amended to read:

(c)  Any such person desiring so to transfer membership shall notify the board of trustees of the retirement system of which the person is a member and the board of trustees of the retirement system to which the person wishes to transfer of such intention and shall request a transfer of the total amount of the accumulated contributions standing to his or her credit in the fund of the system of which he or she is a member from said system to the retirement system to which he or she wishes to transfer his or her membership and shall request the deposit of such accumulated contributions in the fund of the system he or she intends to join.  The amount to be transferred shall equal five percent of be the member’s compensation multiplied by the actual fiscal year employer contribution rate that was in effect for each year of creditable service being transferred, plus any amount of contributions made by the member, if any.  Upon transfer of membership and funds in accordance with the provisions of this section he or she shall receive credit in the system to which he or she has transferred for all accrued benefit rights based on service rendered prior to such transfer for which he or she was entitled to credit in the system from which he or she transferred.

(d)  Upon becoming a member of the retirement system to which he or she has transferred, such person shall thereafter be eligible for such benefits or annuities as are provided by law in such retirement system, including the credits for previous service in the retirement system from which the person has transferred as provided in subsection (e) of this section.  The average final compensation used to calculate the benefit payable at retirement shall be determined by using the earnable compensation which affords the highest consecutive years of earnings under either the system from which or to which he or she transferred, provided, however, that if he or she retires on a retirement allowance in the system to which he or she transferred within five years after said transfer, the benefits or annuities payable with respect to the service credit in the system from which he or she transferred shall not be greater than those which would have been payable with respect to such service had he or she remained in said system.  Except for the determination of the average final compensation as set forth in this subsection, the benefits for a member who transferred from one retirement system to another shall be calculated as follows:

(1)  a member who transfers after July 1, 2007 and before June 30, 2008 shall have the option to have the service from the first system calculated according to the provisions of either the first or the second system at the time of retirement;

(2)  a member who transfers on or before June 30, 2007 or on or after July 1, 2008 shall have his or her benefits calculated according to the provisions of the system or systems under which the benefits were accrued;

(3)  when benefits calculated according to the provisions of two or more retirement systems are combined under this subsection, they may exceed the maximum percentage of average final compensation established for each plan.

Sec. 4.  16 V.S.A. § 1931(2) is amended to read:

(2)  “Actuarial equivalent” shall mean a benefit of equal value when computed at regular interest on the basis of the tables under the actuarial assumptions last adopted by the retirement board under subsection 1943a(h) of this title.

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

(b)(1)  A retirement allowance shall be payable to the eligible surviving beneficiary, if any, following the death of a:

(1)(A)  group A member who had attained age 60 or had completed 30 years of creditable service; or had not attained age 60 and had completed 20 10 years (but less than 30 years) of creditable service and was in service at the time of the member’s death.

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

(2)  In order to be eligible to receive the retirement allowance, the surviving beneficiary must be nominated by the member by written designation duly acknowledged and filed with the board and if the beneficiary is other than the spouse of the member, the beneficiary must be dependent upon the member at the time of the member’s death, provided that no person entitled to a pension under subsection (b) of section 1940 of this title may be eligible for a retirement allowance under this section.  The board shall from time to time adopt uniform rules for determining whether a designated beneficiary was dependent upon a member; if, in the judgment of the board, a surviving beneficiary in receipt of a retirement allowance would have ceased to be dependent upon the member had the member survived, the board may discontinue the retirement allowance payable to such surviving beneficiary.  The retirement allowance payable to the surviving beneficiary shall be equal to the benefit which would have been payable had the member elected option 5 and retired on the member’s date of death, computed in the case of a member who has not attained age 60 on the basis of a disability retirement allowance or an early retirement allowance, as provided in subsection (c) of section 1937 of this title, without regard to whether the member has completed the eligibility requirements for early retirement, whichever provides the greater benefit to the surviving beneficiary.  Such retirement allowance to the surviving beneficiary shall be in lieu of the payment of the member’s accumulated contributions provided under subsection (b) of section 1940 of this title, provided, however, that the surviving beneficiary may elect to receive payment of the member’s accumulated contributions in lieu of such retirement allowance or may elect to convert the retirement allowance otherwise payable to the member into an actuarial equivalent under the provisions of option 2 of this section.  Failing an eligible surviving beneficiary, the member’s accumulated contributions shall be payable in accordance with the provisions of subsection (b) of section 1940 of this title.

Sec. 6.  16 V.S.A. § 1942 is amended to read:

§ 1942.  BOARD OF TRUSTEES; MEDICAL BOARD; ACTUARY; RATE OF CONTRIBUTION; SAFEKEEPING OF SECURITIES

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(b)  The board shall consist of six trustees, as follows:

(1)  The commissioner of education, ex-officio;

(2)  The state treasurer, ex-officio;

(3)  The commissioner of banking, insurance, securities, and health care administration, ex-officio;

(4)  Two trustees and one alternate, who shall be members of the system and who shall be elected by the members of the system for a term of four years according to such rules and regulations as the board shall adopt to govern such election; and

(5)  One trustee and one alternate, who shall be elected by the board of directors, Association of Retired Teachers of Vermont, who shall be a retired member of the system receiving retirement benefits, for a term of four years beginning July 1, 1972.

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(e)  Each trustee shall be entitled to one vote on the board.  Four concurring votes shall be necessary for a decision by the trustees at any meeting of the board, and four trustees shall constitute a quorum of the board.  Any ex officio trustee may designate in writing a person within the trustee’s department or office to attend a meeting or meetings of the board of trustees in the trustee’s place.  The designation shall be filed with the secretary of the board.  A person so designated and an alternate attending on behalf of an elected or appointed trustee under this section shall have the same voting rights and responsibilities as the ex officio absent trustee at such meeting or meetings, except that the designee or alternate shall not automatically assume the trustee’s place as an officer of the board.

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Sec. 7.  16 V.S.A. § 1944(b)(16) is amended to read:

(16)  Except as provided in subdivision (5) of this subsection, 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 three five years in installments of equal value or apply contributions previously made under subdivision (5) of this subsection 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 (b)(2) of this section.  Any member who retires before completing payment as approved by the board for the purchase of service under subdivisions (6) through (13) 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.

Sec. 8.  24 V.S.A. § 5051 is amended to read:

§ 5051.  DEFINITIONS

As used in this chapter:

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(2)  “Actuarial equivalent” means a benefit of equal value when computed at regular interest upon the basis of the mortality tables under actuarial assumptions last adopted by the retirement board under subsection 5063a(h) of this title.

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(8)  “Creditable service” means that period of continuous service subsequent to an employee joining the system and prior to his or her normal retirement date or earlier termination of service, during which an employee makes contributions.  For those employees who join when first eligible, and whose employer joins on the effective date of this system, there shall be included as creditable service that period of continuous service as an employee prior to such effective date up to a maximum of twenty 20 years with such employer.  For those employees of employers who join on the effective date of the system, and who elect to join the system subsequent to the effective date, only the three years of continuous service immediately prior to joining the system shall be included as credited service.  For those employees of employers who elect to purchase prior service credit in accordance with subsection 5054(e) of this title, there shall be included as creditable service that period of continuous service as an employee prior to the effective date of participation and allowed in accordance with the prior service purchase agreement but not in excess of 20 years.

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Sec. 9.  24 V.S.A. § 5055(b) is amended to read:

(b)(1)  Normal retirement allowance.  Upon normal retirement, 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.

(2)  The average final compensation used to calculate the retirement allowance under all plans shall be based on the definition of the average final compensation for the member’s group plan immediately preceding retirement.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us