(a)Intent. It is the intent of the General Assembly to recognize members who are in active service on or before June 30, 2022 and made contributions for the duration of fiscal year 2023 and members who are in active service on or after July 1, 2022 and made contributions for at least one year, as part of a broader effort to improve the health of the System. As an acknowledgment of these additional contributions, once the System is in a healthier financial position, it is the intent of the General Assembly that these members should receive postretirement adjustment allowances that will more fully reflect the net percentage increase in the Consumer Price Index. It is also the intent of the General Assembly that the postretirement adjustment allowance formula should be incrementally increase
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(a) Intent. It is the intent of the General Assembly to recognize members who are in active service on or before June 30, 2022 and made contributions for the duration of fiscal year 2023 and members who are in active service on or after July 1, 2022 and made contributions for at least one year, as part of a broader effort to improve the health of the System. As an acknowledgment of these additional contributions, once the System is in a healthier financial position, it is the intent of the General Assembly that these members should receive postretirement adjustment allowances that will more fully reflect the net percentage increase in the Consumer Price Index. It is also the intent of the General Assembly that the postretirement adjustment allowance formula should be incrementally increased to 100 percent of the net percentage increase in the Consumer Price Index, but that no increase should occur to the formula unless the funded ratio of the System is at least 80 percent funded on an actuarial value basis and the accumulated assets of the Account are equal to or exceed the present value of the benefits to accrue to members.
(b) Creation. There is established the Postretirement Adjustment Allowance Account, to be maintained under the Retirement System, which shall be used to provide funding for postretirement adjustment formula enhancements or other benefits that may accrue to eligible members pursuant to the requirements of subsection (d) of this section.
(c) Funds. The Account shall consist of:
(1) any amounts transferred to it from the General Fund Balance Reserve established in 32 V.S.A. § 308c;
(2) any amounts transferred or appropriated to it by the General Assembly; and
(3) interest earned pursuant to subsection (d) of this section.
(d) Account administration. The Postretirement Adjustment Allowance Account shall be subordinate to the retirement benefits provided by the Retirement System. Contributions to the Account shall be irrevocable, and it shall be impossible at any time before satisfaction of all liabilities to provide funding for postretirement adjustment formula enhancements or other benefits that may accrue to eligible members for any part of the corpus or income of the Account to be used for, or diverted to, any purpose other than providing funding for postretirement adjustment formula enhancements or other benefits that may accrue to eligible members. All balances in the Account at the end of the fiscal year shall be carried forward, and interest earned shall remain in the Account.
(e) Recommendation of Board. In any fiscal year, the Board may recommend to the General Assembly that the monies in the Account be used to provide for postretirement adjustment formula enhancements or other benefits that may accrue to eligible members in the System, provided that:
(1) an evaluation has been conducted pursuant to section 1949b of this chapter;
(2) the actuary has certified that the System has a funded ratio of at least 80 percent in the most recent fiscal year; and
(3) the actuary has certified that the Account has sufficient assets to pay for the present value of any benefit being recommended.
(f) Use of funds. In the event that the General Assembly approves of the Board’s recommended postretirement adjustment formula enhancements or other benefit change pursuant to subsection (e) of this section, the Board may direct that funds sufficient to pay the present value of change be charged from the Account for that purpose.
(g) Account charges. In no event shall the funds charged from the Account exceed the outstanding Account balance.
(h) Account assets.
(1) For funding purposes, any asset value utilized in the calculation of the actuarial value of assets of a system shall exclude the Account as of the asset determination date for such calculation.
(2) For all purposes other than funding, the funds in the Account shall be considered assets of the System.
(i) Definition. As used in this section, “eligible member” means:
(1) a member of the System who is in active service on or before June 30, 2022 and made contributions for the duration of fiscal year 2023; or
(2) a member of the System who is in active service on or after July 1, 2022 and made contributions for at least one year. (Added 2021, No. 114 (Adj. Sess.), § 21, eff. July 1, 2022.)