H 448

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1H.448
2 Introduced by Representatives Morris of Springfield, Cina of Burlington,
3Galfetti of Barre Town, Goslant of Northfield, Greer of
4Bennington, Hooper of Randolph, Krasnow of South
5Burlington, Logan of Burlington, Minier of South Burlington,
6and Oliver of Sheldon
7 Referred to Committee on
8 Date:
9 Subject: Executive; retirement; Vermont State Employees’ Retirement System
10 Statement of purpose of bill as introduced: This bill proposes to amend the
11 membership, normal retirement allowance, and contribution rates for Group G
12 in the Vermont State Employees’ Retirement System. This bill also proposes
13 to allow a member of the State Employees’ Retirement System to earn
14 creditable service for employment in a temporary or seasonal position with the
15 State and expands the circumstances where a member may receive creditable
16 service for prior military service without the need to make contributions. In
17 addition, this bill proposes to create a statutory contractual right for members
18 of the State Employees’ Retirement System.
19    An act relating to miscellaneous amendments to the Vermont State
20    Employees’ Retirement System
                                                                    VT LEG #380858 v.1
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1 It is hereby enacted by the General Assembly of the State of Vermont:
2 Sec. 1. 3 V.S.A. § 455 is amended to read:
3 § 455. DEFINITIONS
4    (a) As used in this subchapter:
5***
6(4) “Average final compensation” shall mean:
7***
8(E) For Group A, C, F, or G members who retire on or after July 1,
9 2012, an increase in compensable hours in any year used to calculate average
10 final compensation that exceeds 120 percent of average compensable hours,
11 except for compensable hours resulting from mandatory overtime, shall be
12 excluded from that year when calculating average final compensation.
13***
14(11) “Member” means any employee included in the membership of the
15 Retirement System under section 457 of this title.
16***
17(F) “Group G member” means:
18(i) the following employees who are first employed in the
19 positions listed in this subdivision (F)(i) on or after July 1, 2023, or who are
20 members of the System as of June 30, 2022 and make an irrevocable election
21 to prospectively join Group G on or before June 30, 2023, pursuant to the
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1 terms set by the Board: facility employees of the Department of Corrections, as
2 Department of Corrections employees who provide direct security and
3 treatment services to offenders under supervision in the community, employees
4 of a facility for justice-involved youth, and employees of the Vermont
5 Psychiatric Care Hospital or its successor in interest, who provide direct
6 patient care, and classified employees of the public safety answering points,
7 the Family Services Division of the Department for Children and Families, the
8 Vermont Veterans’ Home, and the Department of State’s Attorneys and
9 Sheriffs; and
10***
11 Sec. 2. 3 V.S.A. § 458 is amended to read:
12 § 458. CREDITABLE SERVICE; MILITARY SERVICE
13    (a) With respect to service rendered prior to the date of membership, each
14 employee who, pursuant to subsection 457(a) of this title, became a member of
15 the retirement system shall have included as prior service hereunder all service
16 credited to him or her the employee as creditable service under the terms of
17 one or both of the predecessor systems, provided his or her the employee’s
18 membership continues unbroken until his or her the employee’s retirement.
19***
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1    (j) Credit shall also be granted for any member who, prior to becoming a
2 member of the System, was employed in a temporary or seasonal position for
3 the State as defined in section 331 of this title.
4 Sec. 3. 3 V.S.A. § 459 is amended to read:
5 § 459. NORMAL AND EARLY RETIREMENT
6***
7    (b) Normal retirement allowance.
8***
9(2)(A) Upon normal retirement, a Group C member shall receive a
10 normal retirement allowance that shall be equal to 50 percent of the member’s
11 average final compensation; provided, however, that if the member has not
12 completed 20 years of creditable service at retirement, or, if earlier, the date of
13 attainment of such age as may be applicable under the provisions of
14 subdivision (a)(4) of this section, the member’s allowance shall be multiplied
15 by the ratio that the number of the member’s years of creditable service at
16 retirement, or such earlier date, bears to 20.
17(B) For a Group C member, for each year of service that is completed
18 on or after July 1, 2022 after attaining the later of 50 years of age or
19 completing 20 years of service, a member’s maximum normal retirement
20 allowance shall increase by an amount equal to one and one-half percent of the
21 member’s average final compensation.
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1***
2(6)(A) Upon normal retirement pursuant to subdivisions
3 455(a)(13)(E)(i), (iii), (iv), and (vi) of this chapter, a Group G member shall
4 receive a normal retirement allowance equal to two and one-half of a percent
5 of the member’s average final compensation times years of membership
6 service in Group G. The maximum retirement allowance shall be 50 percent of
7 average final compensation.
8(B) Upon normal retirement pursuant to subdivisions
9 455(a)(13)(E)(ii) and (v) of this chapter, a Group G member shall receive a
10 normal retirement allowance equal to two and one-half of a percent of the
11 member’s average final compensation times years of membership service in
12 Group G. The maximum retirement allowance shall be 60 percent of average
13 final compensation one and one-half percent of the member’s average final
14 compensation.
15***
16 Sec. 4. 3 V.S.A. § 473 is amended to read:
17 § 473. FUNDS
18    (a) Assets. All of the assets of the Retirement System shall be credited to
19 the Vermont State Retirement Fund.
20    (b) Member contributions.
21***
                                                                    VT LEG #380858 v.1
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1(2) Groups A, C, D, F, and G members.
2(A) Group A members. Commencing on July 1, 2016, contributions
3 shall be 6.55 percent of compensation for Group A members.
4***
5(E) Group G members. Commencing on July 1, 2023, the
6 contribution rate for Group G members shall be based on the quartile in which
7 a member’s hourly rate of pay falls. Quartiles shall be determined annually in
8 the first full pay period of each fiscal year by the Department of Human
9 Resources based on the combined hourly rate of pay of all Group F and Group
10 G members. The contribution rates shall be based on the schedule set forth
11 below:
12(i) Based on the quartiles for the first full pay period of each fiscal
13 year and effective the first full pay period in that fiscal year, for members who
14 have an hourly rate of pay in any pay period below the 25th percentile of
15 Group F and Group G member hourly rates of pay, the contribution rate shall
16 be 11.23 percent of compensation Commencing the first full pay period in
17 fiscal year 2026, the contribution rate for Group G members shall be 8.93
18 percent of compensation.
19(ii) Based on the quartiles for the first full pay period of each
20 fiscal year and effective the first full pay period in that fiscal year, for members
21 who have an hourly rate of pay in any pay period at the 25th percentile and
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1 below the 50th percentile of Group F and Group G member hourly rates of
2 pay, the contribution rate shall be as follows:
3(I) commencing in fiscal year 2024, 12.23 percent of
4 compensation; and
5(II) commencing in fiscal year 2025 and annually thereafter,
6 12.73 percent of compensation Commencing the first full pay period in fiscal
7 year 2026, the contribution rate for Group G members shall be 9.43 percent of
8 compensation.
9(iii) Based on the quartiles for the first full pay period of each
10 fiscal year and effective the first full pay period in that fiscal year, for members
11 who have an hourly rate of pay in any pay period at the 50th percentile and
12 below the 75th percentile of Group F and Group G member hourly rates of
13 pay, the contribution rate shall be as follows:
14(I) commencing in fiscal year 2024, 12.23 percent of
15 compensation;
16(II) commencing in fiscal year 2025, 12.73 percent of
17 compensation; and
18(III) commencing in fiscal year 2026 and annually thereafter,
19 13.23 percent of compensation Commencing the first full pay period in fiscal
20 year 2026 and annually thereafter, the contribution rate for Group G members
21 shall be 9.93 percent of compensation.
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1(iv) Based on the quartiles for the first full pay period of each
2 fiscal year and effective the first full pay period in that fiscal year, for members
3 who have an hourly rate of pay in any pay period at or above the 75th
4 percentile of Group F and Group G member hourly rates of pay, the
5 contribution rate shall be as follows:
6(I) commencing in fiscal year 2024, 12.23 percent of
7 compensation;
8(II) commencing in fiscal year 2025, 12.73 percent of
9 compensation;
10(III) commencing in fiscal year 2026, 13.23 percent of
11 compensation; and
12(IV) commencing in fiscal year 2027 and annually thereafter,
13 13.73 percent of compensation. [Repealed.]
14***
15 Sec. 5. 3 V.S.A. § 477a is amended to read:
16 § 477a. ELECTIONS
17    (a)(1) Any member who has rendered 15 years of creditable service and
18 who has, prior to becoming a member of the System, served a minimum of one
19 full year of full-time service in the military or one full year of full-time service
20 as a member of the Cadet Nurse Corps in World War II, the Peace Corps,
21 VISTA, or AmeriCorps for which the member has derived no military pension
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1 benefits, may elect to have included in the member’s creditable service all or
2 any part of the member’s military, Cadet Nurse Corps, Peace Corps, VISTA,
3 or AmeriCorps service not exceeding five years. Any member who so elects
4 shall deposit in the Fund by a single contribution the amount or amounts
5 determined by the System’s actuary to be cost neutral to the System.
6(2)(A) Notwithstanding the provisions of this subsection (a), any
7 member shall, upon application, be granted up to three years of credit for
8 military service during the following conflicts or periods:
9(i) June 25, 1950, through January 31, 1955,; February 28, 1961,
10 through August 4, 1964, if service was performed in what is now the Republic
11 of Vietnam,; and August 5, 1964, through May 7, 1975,;
12(ii) Operation Urgent Fury;
13(iii) Operation Desert Shield;
14(iv) Operation Desert Storm;
15(v) Operation Desert Sabre;
16(vi) Operation Gothic Serpent;
17(vii) Operation Deliberate Force;
18(viii) Operation Joint Endeavor;
19(ix) Operation Allied Force;
20(x) Operation Enduring Freedom;
21(xi) Operation Freedom Sentinel;
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1(xii) Operation Iraqi Freedom; and
2(xiii) Operation Odyssey Dawn.
3(B) A member granted credit under this subdivision (a)(2) shall not
4 be required to make a contribution, provided the member has rendered 15 years
5 of creditable service and, prior to becoming a member, served a minimum of
6 one full year of full-time service in the military for which he or she the
7 member has derived no military pension benefits.
8(3) The provisions of this subsection shall also be available to State
9 employees who are not members of the classified system and who elect to
10 participate in the defined Contribution Retirement Plan under chapter 16A of
11 this title.
12(4) Notwithstanding the foregoing, in the event of a conflict between the
13 provisions of this subsection and the provisions of 10 U.S.C. § 12736
14 concerning the counting of the same full-time military service toward both
15 military and State pensions, the provisions of the U. S. Code shall control.
16***
17 Sec. 6. 3 V.S.A. § 480c is added to read:
18 § 480c. CONTRACTUAL RIGHTS; EFFECT OF AMENDMENT
19    The provisions of this chapter shall be deemed to establish a contractual
20 relationship between a member and the Retirement System, provided that the
21 contractual relationship is established following a member’s initial
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1 contribution to the Retirement System. No amendments shall be made that
2 shall diminish or impair a member’s rights or benefits provided under this
3 contractual relationship.
4 Sec. 7. MILITARY CONFLICTS AS CREDITABLE SERVICE IMPACTS
5STUDY
6    The State Treasurer shall study the fiscal impacts of including the military
7 conflicts listed in Sec. 5 of this act for eligible creditable service under 3
8 V.S.A. § 477a and report findings and recommendations to the House
9 Committee on Government Operations and Military Affairs and the Senate
10 Committee on Government Operations on or before January 15, 2026.
11 Sec. 8. EFFECTIVE DATES
12    This act shall take effect on July 1, 2025, except that Sec. 5 (elections) shall
13 take effect on July 1, 2026.
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