§ 500 - Defined contribution retirement plan - Vermont Statutes

§ 500. Defined contribution retirement plan TITLE 3ExecutivePART IGenerallyCHAPTER 16A. DEFINED CONTRIBUTION RETIREMENT PLAN

§ 500. Defined contribution retirement plan

(a) The state treasurer shall offer a retirement plan for state employees who are not members of the classified system. The plan shall qualify as a defined contribution plan under the United States Internal Revenue Code, as amended. Participation in such plan shall be in lieu of the retirement plans established under chapter 16 of this title.

(b) Employees who are not members of the classified system who are first employed by the state on and after January 1, 1999 and would otherwise be members of group A, B, C, D or F of the Vermont state retirement system shall be eligible to participate in the defined contribution retirement plan.

(c) Employees who elect to participate in the defined contribution retirement plan shall contribute at the rate of 2.85 percent of the employee's compensation for each payroll period. The state shall contribute to each employee's account at the rate of seven percent of the employee's compensation for each payroll period. Employees may make additional contributions to the plan, provided that total annual contributions by an employee in any calendar year shall not exceed the maximum permitted for such plans under the United States Internal Revenue Code. Contributions shall not be subject to taxation until distribution is actually made or made available to the employee.

(d) Election to participate in the defined contribution retirement plan is irrevocable, unless:

(1) the employee becomes a classified employee and elects to transfer his or her membership and the full actuarial value of the accrued benefit calculated on a cost neutral basis to the Vermont state retirement system; or

(2) the employee is appointed to a position that is eligible for membership in the group D plan. Within 60 days of appointment, the employee may choose to participate in the group D plan and cease participation in the defined contribution plan. Upon an election to participate in the group D plan, the state treasurer shall apply the funds accumulated in the employee's defined contribution account toward purchasing retirement credit in the group D plan by first applying the funds toward purchasing any group D eligible credit earned from the date of the judicial appointment and then applying the funds toward purchasing credit in the retirement group plan or plans for which the employee would have formerly been eligible.

(e) An employee who elects to participate in the defined contribution retirement plan shall become vested in the plan after completion of one year and 11 months of creditable service as a state employee.

(f) An employee who has elected to participate in the defined contribution plan and, after having accrued a minimum of five years of service, becomes disabled as determined by the Social Security Administration or by a state-purchased disability insurance policy while currently employed by the state, shall be entitled to continue the same health and dental benefits that are available to members of the Vermont state retirement system who qualify for disability retirement benefits.

(g) Upon retirement, employees who elect to participate in the defined contribution retirement plan shall be entitled to the same life, dental, and health insurance benefits available to members of the Vermont state retirement system.

(h) The state treasurer shall certify to the governor or governor-elect a statement of the percentage of the payroll of all participating employees sufficient to fund all operating expenses of the defined contribution retirement plan and all contributions of the state which will become due and payable during the next biennium. Contributions by the state shall be charged to the departmental appropriation from which the employees' salaries are paid and shall be included in each departmental budgetary request.

(i) The plan shall be administered by the state treasurer who shall adopt rules necessary to implement and administer the provisions of this chapter. (Added 1997, No. 129 (Adj. Sess.), § 1; amended 1999, No. 158 (Adj. Sess.), § 20; 2005, No. 151 (Adj. Sess.), § 1; No. 163 (Adj. Sess.), § 4; 2007, No. 146 (Adj. Sess.), § 2.)