§ 5062. Retirement Board; Medical Board; actuary; rates of contribution; safekeeping of securities

(a)(1) The general administration and responsibility for the proper operation of the Retirement System and for making effective the provisions of this chapter are hereby vested in a board of five trustees, known as the Retirement Board. The Board shall consist of:

(A) the State Treasurer;

(B) two employee representatives who shall at all times during their term of office both be contributing members of the System and have completed five years of creditable service, elected by the membership of the System;

(C) one employer representative who shall at all times during their term of office be a member of a governing body, the chief executive officer, or a supervisor as defined in 21 V.S.A. § 1502(13), of an employer participating in the System, elected by the governing bodies of the System employers; and

(D) one employer representative who shall at all times during their term of office be a member of a governing body, the chief executive officer, or a supervisor as defined in 21 V.S.A. § 1502(13), of an employer participating in the System, appointed by the Governor from a list of not less than three nominations jointly submitted by the Vermont League of Cities and Towns and the Vermont School Boards Association.

(2) An individual shall not be eligible to serve as an employee representative if the individual is eligible to serve as an employer representative.

(b) All trustees shall be entitled to the necessary expenses, including traveling expenses, incurred in the discharge of their duties. All trustees shall be entitled to receive a per diem as provided in 32 V.S.A. § 1010 except a trustee who is a State or municipal employee; provided that a trustee who is a municipal employee shall be entitled to the per diem when the trustee's compensation from the municipality is reduced as result of the performance of his or her official duties, or the trustee's official duties are performed on his or her personal time. Compensation or reimbursements under this subsection shall be from the Fund of the Retirement System.

(c) Each trustee shall be entitled to one vote in the Retirement Board. Three trustees shall constitute a quorum for the transaction of any business. A majority vote of those present and voting shall be necessary for any resolution or action by the Retirement Board at any meeting of the Board. All trustees shall be notified of any meeting of the Board. The State Treasurer may designate in writing a person within the State Treasurer's Office to attend a meeting or meetings of the Retirement Board in the State Treasurer's place. The designation shall be filed with the Secretary of the Board. A person so designated shall have the same voting rights and responsibilities as the State Treasurer at such meeting or meetings except that the designee shall not automatically assume the Treasurer's place as an officer of the Board.

(d) Subject to the limitations of this chapter, the Retirement Board shall, from time to time, establish rules and regulations for the administration of the Fund of the Retirement System and for the transaction of its business.

(e) The Retirement Board shall elect from its membership a chair and shall appoint a secretary who may be, but need not be, one of the trustees. It shall engage such medical, actuarial, and other services as shall be required to transact the business of the Retirement System. The compensation of all persons engaged by the Retirement Board, and all other expenses of the Board necessary for the operation of the Retirement System, shall be paid at such rates and in such amounts as the Board shall approve.

(f) The Retirement Board shall keep in convenient form such data as shall be necessary for actuarial valuation of the Fund of the Retirement System, and for checking the experience of the System.

(g) The Retirement Board shall keep a record of all its proceedings, which shall be open to public inspection. It shall publish annually a report showing the fiscal transactions of the Retirement System for the preceding fiscal year, the amount of the accumulated cash and securities of the System, and the last balance sheet showing the financial condition of the Retirement System by means of an actuarial valuation of the assets and liabilities of the System.

(h) The Attorney General of the State shall be legal advisor to the Retirement Board.

(i) The Retirement Board shall designate a Medical Board to be composed of three physicians not eligible to participate in the Retirement System. If required, other physicians may be employed to report on special cases. The Medical Board shall arrange for and pass upon all medical examinations required under the provisions of this chapter, shall investigate all essential statements and certificates by or on behalf of a member in connection with an application for disability retirement, and shall report in writing to the Retirement Board of its conclusions and recommendations upon all matters referred to it.

(j) The Retirement Board shall designate an actuary who shall be the technical advisor of the Board on matters regarding the operation of the Fund of the Retirement System, and shall perform such other duties as are required in connection therewith.

(k) Immediately after the establishment of the Retirement System, the Retirement Board shall adopt for the Retirement System such mortality and service tables as shall be deemed necessary and shall certify the rates of contribution payable under the provisions of this chapter. At least once in each five-year period following the establishment of the System, the actuary shall make an actuarial investigation into the mortality, service, and compensation experience of the members and beneficiaries of the Retirement System, and taking into account the results of such investigation, the Retirement Board shall adopt for the Retirement System such mortality, service, and other tables as shall be deemed necessary and shall certify the rates of contribution payable under the provisions of this chapter.

(l) On the basis of such mortality and service tables as the Retirement Board shall adopt, the actuary shall make annual valuations of the assets and liabilities of the Fund of the Retirement System.

(m) The Vermont Pension Investment Committee shall designate from time to time a depository for the securities and evidences of indebtedness held in the Fund of the System and may contract for the safekeeping of securities and evidences of indebtedness within and without the State of Vermont in such banks, trust companies, and safe-deposit facilities as it shall from time to time determine. The necessary and incidental expenses of such safekeeping and for service rendered, including advisory services in investment matters shall be paid from the operation expenses of the System as hereinafter provided. Any agreement for the safekeeping of securities or evidences of indebtedness shall provide for the access to such securities and evidences of indebtedness, except securities loaned pursuant to a securities lending agreement as authorized by subsection (o) of this section, at any time by the custodian or any authorized agent of the State for audit or other purposes.

(n) The Board shall determine the election procedures by which the two employee representatives and employer representative elected by the governing bodies of the System employers who are members of the Board are elected. Elections shall be held to take effect on July 1, 2010, for the first employee representative and employer representative elected by the governing bodies of the System employers and every four years thereafter; and on July 1, 2012, for the second employee representative and employer representative appointed by the Governor and every four years thereafter. The term in office for each elected member of the Board shall be four years. Vacancies of an elected Board member's seat in midterm shall be filled by an individual eligible for election to that seat designated by the remaining members of the Board.

(o) The Vermont Pension Investment Committee may authorize the loan of its securities pursuant to securities lending agreements that provide for collateral consisting of cash or securities issued or guaranteed by the U.S. government or its agencies equal to 100 percent or more of the market value of the loaned securities. Cash collateral may be invested by the lending institution in investments approved by the State Treasurer. Approval of investments shall be made in accordance with the standard of care established by the prudent investor rule under 9 V.S.A. chapter 147. (Added 1973, No. 251 (Adj. Sess.), § 3; amended 1977, No. 205 (Adj. Sess.), § 3; 1985, No. 223 (Adj. Sess.); 1987, No. 92, § 5, eff. June 23, 1987; 1991, No. 151 (Adj. Sess.), §§ 5, 6; 1995, No. 36, § 9; 1999, No. 158 (Adj. Sess.), § 25; 2005, No. 50, § 8; 2007, No. 13, § 44; 2009, No. 139 (Adj. Sess.), § 8, eff. June 30, 2010; 2013, No. 161 (Adj. Sess.), § 72.)