§ 5064. Funds

(a) Fund. All of the assets of the Retirement System shall be credited to the Vermont Municipal Retirement Fund.

(b) Member savings. Contributions deducted from the compensation of members together with any member contributions transferred from a predecessor system shall be accumulated in the Fund and separately recorded for each member. 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 5068(f) of this title, the rate established in this subsection 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.

(1) The deductions provided for in this section shall be made notwithstanding that the minimum compensation provided for by law for any member shall be reduced thereby. Every member shall be deemed to consent and agree to the deductions made and provided pursuant to this section and shall receipt for the member’s full compensation, and payment of compensation less such deduction shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the services rendered by such person during the period covered by such payment, except as to the benefits provided under this chapter.

(2) The contributions of a member and interest as may be allowed thereon which are withdrawn by the member or paid to the member’s estate or to the designated beneficiary in event of the member’s death, shall be paid from the Fund.

(3) The employer shall make one of the following elections:

(A) To make, on behalf of the members, all or any part of contributions required to be made by members under this section. Each of the amounts shall be deducted until the member retires or otherwise withdraws from service, and when deducted shall be paid into the Fund and credited to the individual account of the member from whose compensation the deduction was made.

(B) Pursuant to the provisions of Section 414(h) of the Internal Revenue Code, to pick up and pay the contributions required to be paid by members with respect to service rendered on and after July 1, 1999. Contributions picked up by the municipality under this election shall be designated for all purposes as member contributions, except that they shall be treated as employer contributions in determining tax treatment of a distribution. Each member’s compensation shall be reduced by an amount equal to the amount picked up by the municipality. This reduction, however, shall not be used to determine annual earnable compensation for purposes of determining average final compensation. Contributions picked up under this subdivision shall be credited to the Fund.

(c) Employer contributions, earnings, and payments. All employer contributions and all reserves for the payment of all pensions and other benefits, including all interest and dividends earned on the assets of the Retirement System shall be accumulated in the Fund, and all benefits payable under the System and expenses of the System shall be paid from the Fund.

(1) On account of each member, an employer shall report earnable compensation and pay annually, in installments as determined by the Board, into the Fund an amount equal to the certain percentage of the annual earnable compensation of such member. Such contribution percentage shall be separately determined for each group of membership within the Retirement System as the sum of “normal contribution rate” for such membership group and its “accrued liability contribution rate,” such sum to be reduced by the member contribution rate provided for in subsection (b) of this section.

(2) On the basis of the actuarial assumptions and methodology as shall be adopted by the Retirement Board, immediately after making each actuarial valuation, the actuary shall determine the “normal contribution rate” for each group of membership. The product of a membership group’s normal contribution rate and its total earnable compensation shall be referred to as that membership group’s “normal contribution.”

(3) In each actuarial valuation, the actuary shall, based on methodology adopted by the Retirement Board, determine the amount of the Fund attributable to each membership group within the Retirement System for valuation purposes. The difference between each membership group’s accrued liability and its allocated share of Fund assets as of any valuation date shall be referred to as such membership group’s “unfunded accrued liability.”

(4) For each actuarial valuation completed on or after July 1, 2009, the accrued liability contribution rate shall be computed for each membership group based on the actuarial assumptions and methodology adopted by the Retirement Board as the rate percent of the earnable compensation of the employees in such membership group which, if applied to expected future earnings of current and future employees of such membership group, would be expected to liquidate the membership group’s unfunded accrued liability on or before June 30, 2038. The product of a membership group’s accrued liability rate and its total earnable compensation shall be referred to as that membership group’s “accrued liability contribution.”

(5) The accrued liability contribution for a separate membership group shall be discontinued, and the unfunded accrued liability for such membership group shall be set equal to zero in the event the assets attributable to such membership group should exceed the accrued liability as determined under the assumptions and methodology approved by the Retirement Board.

(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 pay for that liability, and the amount of increased rate of contribution required to pay for 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 subdivision (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 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 (4) of this subsection.

(d) Operation expenses. As provided by law, the Board shall certify to the Governor or Governor-Elect an estimated amount required for operation expenses of the System in the next annual or biennial period. The amount so certified shall be included in the budget, with the revenue derived from the Vermont Municipal Retirement Fund, and submitted to the General Assembly.

(e) Remittance of member contributions and employer contributions. Each employer shall remit its employer contributions and the member contributions applicable to its employees in installments as determined by the Board to the State Treasurer.

(1) Any payments due which are not received within 30 days after the installment due date set by the Board shall result in a penalty assessment against the employer at the rate of one percent of the amount due for each month calculated from the installment due date, provided that the Board may, in its discretion, waive part or all of said penalty assessment if good cause is shown. The delinquent payments and penalties thereon may be recovered by action in a court of competent jurisdiction against the employer liable therefor or may be deducted by, or at the request of, the State Treasurer from any other monies payable to such employer by the State or any department or agency thereof.

(2) All employers shall provide accurate reports. Employers providing inaccurate reports shall be responsible for correcting any deficiencies and shall reimburse the System for any costs incurred by the System as a result of inaccuracy.

(3) In the event that an employer willfully files an inaccurate report, in addition to any other penalties provided by law, the employer shall pay the System an administrative penalty of up to 50 percent of the amount that was not accurately reported.

(4) The System may enforce the provisions of this section in Washington Superior Court.

(5) The Board may, in its discretion, waive part or all of a penalty assessment for good cause shown.

(f) [Repealed.] (Added 1973, No. 251 (Adj. Sess.), § 3; amended 1975, No. 254 (Adj. Sess.), §§ 149-151; 1977, No. 205 (Adj. Sess.), § 4; 1983, No. 128 (Adj. Sess.), § 2; 1985, No. 74, § 302; 1987, No. 39, §§ 7, 8, 11; 1989, No. 11, § 8a; 1991, No. 233 (Adj. Sess.), § 6; 1995, No. 25, §§ 2, 3; 1999, No. 53, § 13; 1999, No. 61, § 4; 1999, No. 158 (Adj. Sess.), §§ 14, 16; 2001, No. 29, § 11; 2005, No. 44, § 1; 2005, No. 197 (Adj. Sess.), § 7; 2007, No. 13, § 47; 2009, No. 24, § 12a; 2009, No. 139 (Adj. Sess.), § 9.)