(a)General. The Vermont Pension Investment Commission shall be responsible for the investment of the assets of the Vermont State Teachers’ Retirement System, the Vermont State Employees’ Retirement System, and the Vermont Municipal Employees’ Retirement System pursuant to section 472 of this title, 16 V.S.A. § 1943, and 24 V.S.A. § 5063. The Commission shall strive to maximize total return on investment, within acceptable levels of risk for public retirement systems, in accordance with the standards of care established by the prudent investor rule under 14A V.S.A. § 902. The Commission may, in its discretion, subject to approval by the Attorney General, also enter into agreements with municipalities administering their own retirement systems to invest retirement funds for those municipal
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(a) General. The Vermont Pension Investment Commission shall be responsible for the investment of the assets of the Vermont State Teachers’ Retirement System, the Vermont State Employees’ Retirement System, and the Vermont Municipal Employees’ Retirement System pursuant to section 472 of this title, 16 V.S.A. § 1943, and 24 V.S.A. § 5063. The Commission shall strive to maximize total return on investment, within acceptable levels of risk for public retirement systems, in accordance with the standards of care established by the prudent investor rule under 14A V.S.A. § 902. The Commission may, in its discretion, subject to approval by the Attorney General, also enter into agreements with municipalities administering their own retirement systems to invest retirement funds for those municipal pension plans. The State Treasurer shall serve as the custodian of the funds of all three retirement systems. The Commission may, in its discretion, also enter into agreements with the State Treasurer to invest the State Employees’ Postemployment Benefits Trust Fund, established in section 479a of this title, and the Retired Teachers’ Health and Medical Benefits Fund, established in 16 V.S.A. § 1944b.
(b) Powers and duties. The Commission shall have the following duties:
(1) Set the following actuarial assumptions:
(A) the investment rate of return;
(B) the inflation rate; and
(C) the smoothing rate method used for the actuarial valuation of assets and returns.
(2) Not more than 180 days after the end of each fiscal year, conduct an asset allocation study that reviews the expected return of each fund, including a risk analysis using best practices methodologies to estimate potential risks to the fund’s asset values over a five-, 10-, and 20-year period and the remainder of the statutory amortization period. The study shall be submitted to the House Committee on Government Operations and Military Affairs and the Senate Committee on Government Operations and the Office of the Governor and made publicly available within 10 days of completion.
(c) Recordkeeping. The Commission shall keep a record of all its proceedings, which shall be open for public inspection.
(d) Policies. The Commission shall formulate policies and procedures deemed necessary and appropriate to carry out its functions, including a written statement of the responsibilities of and expectations for the Chair of the Commission and standards of conduct for members and employees of the Commission in order to maintain and promote public confidence in the integrity of the Commission. The standard of conduct policies shall prohibit members and employees from receiving or soliciting any gift, including meals, alcoholic beverages, travel fare, room and board, or any other thing of value, tangible or intangible, from any vendor or potential vendor of investment services, management services, brokerage services, and other services to the Commission.
(e) Contracts. Contracts approved by the Commission and related documents may be executed by the Chair or, in the Chair’s absence, the Vice Chair.
(f) Asset and liability study. Beginning on July 1, 2023, and every three years thereafter, based on the most recent actuarial valuations of each Plan, the Commission shall study the assets and liabilities of each Plan over a 20-year period. The study shall:
(1) project the expected path of the key indicators of each Plan’s financial health based on all current actuarial and investment assumptions; current contribution and benefit policies, including the Plans’ mark-to-market funded ratio; actuarially required contributions by source; payout ratio; and related liquidity obligations; and
(2) project the effect on each Plan’s financial health resulting from:
(A) possible material deviations from Plan assumptions in investment assumptions, including returns versus those expected and embedded in the actuary’s estimate of actuarially required contributions and any material changes in capital markets volatility; and
(B) possible material deviations from key plan actuarial assumptions, including retiree longevity, potential benefit increases, and inflation.
(g) Changes to actuarial rate of return. Any changes to the actuarial rate of return shall be made by the Commission.
(h) Annual reports.
(1) Beginning on January 15, 2022, and every year thereafter, the Commission shall submit to the House Committee on Government Operations and Military Affairs and the Senate Committee on Government Operations:
(A) a report on the performance of each Plan versus its demographic investment and other actuarial assumptions over a three-, five-, seven-, and 10-year period and the funding ratio of each Plan to each Plan beneficiary at the end of each fiscal year; and
(B) a report on the status of the funding and investment performance of each Plan and any relevant information from the asset liability and scenario testing completed during the prior fiscal year.
(2) The Commission shall send to each participant or beneficiary of each Plan a written or electronic copy of the report described in subdivision (1) of this subsection, in the format authorized by the participant or beneficiary. The report shall be consolidated with any other reports required to be sent by the Commission to the participants or beneficiaries of each Plan. (Added 2005, No. 50, § 2; amended 2005, No. 215 (Adj. Sess.), § 277b; 2007, No. 100 (Adj. Sess.), § 3; 2007, No. 176 (Adj. Sess.), § 18, May 28, 2008; 2009, No. 139 (Adj. Sess.), § 4; 2019, No. 120 (Adj. Sess.), § A.13, eff. June 30, 2020; 2021, No. 75, § 1, eff. June 8, 2021; 2021, No. 114 (Adj. Sess.), § 16, eff. July 1, 2022.)