§ 455. Definitions

(a) As used in this subchapter:

(1) “Accumulated contributions” shall mean the sum of all the amounts deducted from the compensation of a member together with any amount transferred to the account of the member established pursuant to this system from the respective account of said member under one or both of the predecessor systems, with interest thereon, as provided in section 473 of this title.

(2) “Actuarial equivalent” shall mean a benefit of equal value under the actuarial assumptions last adopted by the Retirement Board under subsection 472a(h) of this title.

(3) “Annuity” shall mean annual payments for life derived from the accumulated contributions of a member.

(4) “Average final compensation” shall mean:

(A) For a Group A, Group F, or Group G member, the average annual earnable compensation of a member during the three consecutive fiscal years beginning July 1 and ending June 30 of creditable service affording the highest average, or during all of the years of creditable service if fewer than three years. If the member’s highest three years of earnable compensation are the three years prior to separation of service and the member separates prior to the end of a fiscal year, average final compensation shall be determined by adding:

(i) The actual earnable compensation earned in the fiscal year of separation through the date of separation and the service credit to correspond with the last pay date.

(ii) The earnable compensation and service credit earned in the preceding two fiscal years.

(iii) The remaining service credit that is needed to complete the three full years, which shall be factored from the fiscal year preceding the two fiscal years described in subdivision (ii) of this subdivision (A). The earnable compensation associated with this remaining service credit shall be calculated by multiplying the annual earnable compensation reported by the remaining service credit that is needed.

(B) For a Group C member, the average annual earnable compensation of a member during the two consecutive fiscal years beginning July 1 and ending June 30 of creditable service affording the highest such average, or during all of the years in the member’s creditable service if fewer than two years. If the member’s highest two years of earnable compensation are the two years prior to separation of service and the member separates prior to the end of a fiscal year, average final compensation shall be determined by adding:

(i) The actual earnable compensation earned in the fiscal year of separation through the date of separation and the service credit to correspond with the last pay date.

(ii) The earnable compensation and service credit earned in the preceding fiscal year.

(iii) The remaining service credit that is needed to complete the two full years, which shall be factored from the fiscal year preceding the fiscal year described in subdivision (ii) of this subdivision (B). The earnable compensation associated with this remaining service credit shall be calculated by multiplying the annual earnable compensation reported by the remaining service credit that is needed.

(C) For purposes of determining average final compensation for Group A or Group C members, a member who has accumulated unused sick leave at retirement shall be deemed to have worked the full normal working time for the member’s position for 50 percent of such leave, at the member’s full rate of compensation in effect at the date of the member’s retirement. For purposes of determining average final compensation for Group F or Group G members, unused annual or sick leave, termination bonuses, and any other compensation for service not actually performed shall be excluded. The average final compensation for a State‘s Attorney and the Defender General shall be determined by the State’s Attorney’s or the Defender General’s highest annual compensation earned during the member’s creditable service.

(D) For purposes of determining average final compensation for a member who has accrued service in more than one group plan within the System, the highest consecutive years of earnings shall be based on the formulas set forth in subdivision (A) or (B) of this subdivision (4) using the earnable compensation received while a member of the System.

(E) For Group A, C, F, or G members who retire on or after July 1, 2012, an increase in compensable hours in any year used to calculate average final compensation that exceeds 120 percent of average compensable hours shall be excluded from that year when calculating average final compensation.

(F) For a Group D member:

(i) Who retires on or before June 30, 2022, the member’s final salary.

(ii) Who retires on or after July 1, 2022, but who, on or before June 30, 2022, has five years or more of service as a Supreme Court Justice, a Superior judge, an Environmental judge, a District judge, or a Probate judge, or any combination thereof, and has attained 57 years of age or older, or is a Group D member on or before June 30, 2022 and has 15 years or more of creditable service, the member’s final salary.

(iii) Who retires on or after July 1, 2022 and who does not meet the requirements set forth in subdivisions (i) and (ii) of this subdivision (F), the average annual earnable compensation of a member during the two consecutive fiscal years beginning on July 1 and ending on June 30 of creditable service affording the highest such average, or during all of the years in the member’s creditable service if fewer than two years. If the member separates prior to the end of a fiscal year, average final compensation shall be determined by adding:

(I) The actual earnable compensation earned in the fiscal year of separation through the date of separation and the service credit to correspond with the last pay date.

(II) The earnable compensation and service credit earned in the preceding fiscal year.

(III) The remaining service credit that is needed to complete the two full years, which shall be factored from the fiscal year preceding the fiscal year described in subdivision (II) of this subdivision (F)(iii). The earnable compensation associated with this remaining service credit shall be calculated by multiplying the annual earnable compensation reported by the remaining service credit that is needed.

(5) “Beneficiary” shall mean any person in receipt of a pension, an annuity, a retirement allowance, or other benefit as provided by this subchapter.

(6) “Creditable service” shall mean service for which credit is allowed under section 458 of this title, plus service transferred under section 495 of this title.

(7) “Department” shall mean any department, institution, or agency of this State government.

(8) “Earnable compensation” shall mean the full rate of compensation that would be payable to an employee if the employee worked the full normal working time for the employee’s position. In cases where compensation includes maintenance, the Retirement Board shall fix the value of that part of the compensation not paid in money.

(9) “Employee” shall mean:

(A) Any regular officer or employee of the Vermont Historical Society or a department other than a person included under subdivision (B) of this subdivision (9), who is employed for not less than 40 calendar weeks in a year. “Employee” includes deputy State’s Attorneys, victim advocates employed by a State’s Attorney pursuant to 13 V.S.A. § 5306, secretaries employed by a State’s Attorney pursuant to 32 V.S.A. § 1185, and other positions created within the State’s Attorneys’ offices that meet the eligibility requirements for membership in the Retirement System.

(B) Any regular officer or employee of the Department of Public Safety assigned to police and law enforcement duties, including the Commissioner of Public Safety appointed before July 1, 2001; but, irrespective of the member’s classification, shall not include any member of the General Assembly as such, any person who is covered by the Vermont Teachers’ Retirement System, any person engaged under retainer or special agreement or Group C beneficiary employed by the Department of Public Safety for not more than 208 hours per year, or any person whose principal source of income is other than State employment. In all cases of doubt, the Retirement Board shall determine whether any person is an employee as defined in this subchapter. Also included under this subdivision are employees of the Department of Liquor and Lottery who exercise law enforcement powers, employees of the Department of Fish and Wildlife assigned to law enforcement duties, motor vehicle inspectors, full-time deputy sheriffs compensated by the State of Vermont whose primary function is transports, full-time members of the Capitol Police force, investigators employed by the Criminal Division of the Office of the Attorney General, Department of State’s Attorneys, Department of Health, or Office of the Secretary of State, who have attained Level III law enforcement officer certification from the Vermont Criminal Justice Council, who are required to perform law enforcement duties as the primary function of their employment, and who may be subject to mandatory retirement permissible under 29 U.S.C. § 623(j), who are first included in membership of the system on or after July 1, 2000. Also included under this subdivision are full-time firefighters employed by the State of Vermont and the Defender General.

(10) “Medical Board” shall mean the board of physicians provided for in section 471 of this title.

(11) “Member” means any employee included in the membership of the Retirement System under section 457 of this title.

(A) “Group A members” means employees classified under subdivision (A) of subdivision (9) of this subsection (a).

(B) [Repealed.]

(C) “Group C members” means employees classified under subdivision (B) of subdivision (9) of this subsection (a) who become members as of the date of establishment, any person who is first included in the membership of the System on or after July 1, 1998, any person who was a Group B member on June 30, 1998, who was in service on that date, and any person who was a Group B member on June 30, 1998, who was absent from service on that date who returns to service on or after July 1, 1998.

(D) “Group D members” means Justices of the Supreme Court, Superior judges, district judges, environmental judges, and probate judges.

(E) “Group F member” means any person who is first included in the membership of the System on or after January 1, 1991, any person who was a Group E member on December 31, 1990, who was in service on that date, and any person who was a Group E member on December 31, 1990, who was absent from service on that date who returns to service on or after January 1, 1991.

(F) “Group G member” means the following employees who are first employed in the positions listed in this subdivision (F) on or after July 1, 2023, or who are members of the System as of June 30, 2022 and make an irrevocable election to prospectively join Group G on or before June 30, 2023, pursuant to the terms set by the Board: facility employees of the Department of Corrections, as Department of Corrections employees who provide direct security and treatment services to offenders under supervision in the community, as employees of a facility for justice-involved youth, or as Vermont State Hospital employees or as employees of its successor in interest, who provide direct patient care.

(12) “Membership service” means service rendered while a member of the Retirement System.

(13) “Normal retirement date” means:

(A) with respect to a Group A member, the first day of the calendar month next following (i) attainment of 65 years of age, and following completion of five years of creditable service for those members hired on or after July 1, 2004, or (ii) attainment of age 62 and completion of 20 years of creditable service, whichever is earlier;

(B) with respect to a Group C member, the first day of the calendar month next following attainment of 55 years of age, and following completion of five years of creditable service for those members hired on or after July 1, 2004, or completion of 30 years of service, whichever is earlier;

(C) with respect to a Group D member:

(i) for those members first appointed or elected on or before June 30, 2022, the first day of the calendar month next following attainment of 62 years of age and completion of five years of creditable service; or

(ii) for those members first appointed or elected on or after July 1, 2022, the first day of the calendar month next following attainment of 65 years of age and completion of five years of creditable service; and

(D) with respect to a Group F member, the first day of the calendar month next following attainment of 62 years of age, and following completion of five years of creditable service for those members hired on or after July 1, 2004, or completion of 30 years of creditable service, whichever is earlier; and with respect to a Group F member first included in the membership of the system on or after July 1, 2008, the first day of the calendar month next following attainment of 65 years of age and following completion of five years of creditable service, or attainment of 87 points reflecting a combination of the age of the member and number of years of service, whichever is earlier.

(E) with respect to a Group G member:

(i) for facility employees of the Department of Corrections, Department of Corrections employees who provide direct security and treatment services to offenders under supervision in the community, employees of a facility for justice-involved youth, or employees of the Vermont State Hospital or its successor in interest, who provide direct patient care, who were first included in the membership of the System on or before June 30, 2008, who were employed as of June 30, 2022, and who made an irrevocable election to prospectively join Group G on or before July 1, 2023, pursuant to the terms set by the Board, the first day of the calendar month next following the earlier of:

(I) 62 years of age and following completion of five years of creditable service;

(II) completion of 30 years of creditable service; or

(III) 55 years of age and following completion of 20 years of creditable service; or

(ii) for facility employees of the Department of Corrections, Department of Corrections employees who provide direct security and treatment services to offenders under supervision in the community, as employees of a facility for justice-involved youth, or employees of the Vermont State Hospital or its successor in interest, who provide direct patient care, who were first included in the membership of the System on or after July 1, 2008, who were employed as of June 30, 2022, and who made an irrevocable election to prospectively join Group G on or before July 1, 2023, pursuant to the terms set by the Board, the first day of the calendar month next following the earlier of:

(I) 65 years of age and following completion of five years of creditable service;

(II) attainment of 87 points reflecting a combination of the age of the member and number of years of service; or

(III) 55 years of age and following completion of 20 years of creditable service; or

(iii) for facility employees of the Department of Corrections, Department of Corrections employees who provide direct security and treatment services to offenders under supervision in the community, employees of a facility for justice-involved youth, or employees of the Vermont State Hospital or its successor in interest, who provide direct patient care, who first become a Group G member on or after July 1, 2023, the first day of the calendar month next following the earlier of:

(I) attainment of 55 years of age and following completion of 20 years of creditable service; or

(II) 65 years of age and following completion of five years of creditable service.

(14) “Pension” shall mean annual payments for life derived from contributions by the State.

(15) “Predecessor system” shall mean, where applicable, the Vermont Employees’ Retirement System and the Vermont State Police and Motor Vehicle Inspectors’ Retirement System, either one of them, or a combination thereof.

(16) “Prior service” shall mean service rendered prior to the date of membership in the Retirement System for which credit was given under the terms of one or both of the predecessor systems as set forth in section 458 of this title.

(17) “Regular interest” shall mean interest at such rate or rates as may be set from time to time by the Retirement Board in accordance with subsection 472(b) of this title.

(18) “Retirement allowance” or “maximum allowance” shall mean the sum of the annuity and the pension. All retirement allowances shall be payable in equal monthly installments except that when the retirement allowance is less than $20.00 per month it shall be payable on such basis as the Board may direct.

(19) “Retirement Board” or “Board” shall mean the board provided for in section 471 of this title to administer the Retirement System.

(20) “Retirement System” shall mean the Vermont State Retirement System as defined in section 456 of this title.

(21) “Service” shall mean service as an employee for which compensation is paid by the State.

(22) “Social Security benefit” shall mean the amount of the member’s primary insurance benefit or disability insurance benefit under Title II of the Social Security Act and such other benefit or benefits as may be payable on the member’s account under said title, computed on the basis of such act as in effect at the time of retirement and limited to the portion of such benefit or benefits that is attributable to service for which the member receives credit under section 458 of this title, to which a member or other person on his or her account is or would upon proper application be entitled, irrespective of earnings the member or members may be receiving in excess of any limit on earnings for full entitlement to such benefit or benefits.

(23) “Survivor’s insurance benefit” shall mean the amount paid or payable under Title II of the Social Security Act, computed on the basis of such act as in effect at the time of the member’s death and limited to the portion of such amount that is attributable to service for which he or she receives credit under section 458 of this title, to any person or persons on account of the death of a member, even though such amount or any part thereof is not actually received by such person because of his or her failure to make proper application therefor, or because of his or her receipt of earnings that would make him or her ineligible for such benefit.

(24) “Commission” shall mean the Vermont Pension Investment Commission.

(25) “Fund” or “Vermont State Retirement Fund” shall mean the fund created by section 473 of this title, which shall contain the assets of the Retirement System and from which shall be paid the benefits due to beneficiaries and the expenses of the Retirement System.

(26) “Average compensable hours” shall mean average annual compensable hours for a period of five full years immediately preceding the years used to determine average final compensation for any member who terminates his or her position after July 1, 2002. If a member’s compensable hours in any year used to calculate average final compensation exceeds 120 percent of average compensable hours, the compensation for hours worked in excess of 120 percent shall be excluded from average final compensation for that particular year. Average compensable hours form the benchmark to preclude abuses by implementing a 20-percent limit on increases in compensable hours in any year used to calculate average final compensation.

(27) “Compensable hours” shall mean all hours worked during a fiscal year and shall include the following types of paid time: regular hours worked, overtime hours worked, and paid leave.

(28) “Successor in interest” means the mental health hospital owned and operated by the State that provides acute inpatient care and replaces the Vermont State Hospital.

(b) [Repealed.] (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1973, No. 37, § 1; 1977, No. 153 (Adj. Sess.), § 1; No. 222 (Adj. Sess.), § 3, eff. July 2, 1978; 1981, No. 41, §§ 1-3; 1987, No. 121, § 14; 1989, No. 78, §§ 1, 3, 10; 1989, No. 277 (Adj. Sess.), §§ 17d-17f, eff. Jan. 1, 1991; 1997, No. 68 (Adj. Sess.), § 3, eff. March 1, 1998; No. 89 (Adj. Sess.), § 2; 1999, No. 158 (Adj. Sess.), § 22; 2001, No. 57, § 1; 2001, No. 116 (Adj. Sess.), § 5, eff. May 28, 2002; 2003, No. 66, § 302a, eff. July 1, 2004; 2003, No. 115 (Adj. Sess.), § 1; No. 122 (Adj. Sess.), § 297; 2005, No. 50, § 3; 2005, No. 165 (Adj. Sess.), § 1; 2007, No. 13, § 1; No. 47, § 13; 2007, No. 116 (Adj. Sess.), § 1; No. 137 (Adj. Sess.), § 1; No. 146 (Adj. Sess.), § 3; 2009, No. 139 (Adj. Sess.), §§ 1, 2, 13(a); 2011, No. 79 (Adj. Sess.), § 11, eff. April 4, 2012; 2013, No. 22, § 1; 2013, No. 115 (Adj. Sess.), § 1; 2013, No. 141 (Adj. Sess.), § 12, eff. July 1, 2015; 2015, No. 58, § E.203.2; 2015, No. 97 (Adj. Sess.), § 3; 2017, No. 81, § 1, eff. June 15, 2017; 2017, No. 165 (Adj. Sess.), § 1; 2019, No. 73, § 19; 2019, No. 131 (Adj. Sess.), § 1; 2021, No. 114 (Adj. Sess.), § 2, eff. July 1, 2022; 2023, No. 3, § 96, eff. March 20, 2023.)