§ 495. Transfer of memberships

(a) The words "retirement system" as used in this section shall mean and include the following:

(1) Vermont State Retirement System as established by subchapter 1 of this chapter, and including employees of certain political subdivisions under the provisions of subchapter 2 of this chapter;

(2) State Teachers' Retirement System of Vermont as established by 16 V.S.A. chapter 55; and

(3) Municipal Employees' Retirement System as established by 24 V.S.A. chapter 125.

(b) Any person who is a member of a Retirement System as defined in subsection (a) of this section may transfer his or her membership to another Retirement System, as defined in subsection (a) of this section, within one year after acceptance of office or employment which makes it possible or mandatory for him or her to participate in such other Retirement System if such acceptance of office or employment would make it impossible for him or her to continue as a contributing member of the Retirement System of which he or she has been a member.

(c) Any such person desiring so to transfer membership shall notify the board of trustees of the retirement system of which the person is a member and the board of trustees of the retirement system to which the person wishes to transfer of such intention and shall request a transfer of the total amount of the accumulated contributions standing to his or her credit in the fund of the system of which he or she is a member from said system to the retirement system to which he or she wishes to transfer his or her membership and shall request the deposit of such accumulated contributions in the fund of the system he or she intends to join. The amount to be transferred shall be the member's compensation multiplied by the actual fiscal year employer contribution rate that was in effect for each year of creditable service being transferred, plus any amount of contributions made by the member, if any. Upon transfer of membership and funds in accordance with the provisions of this section he or she shall receive credit in the system to which he or she has transferred for all accrued benefit rights based on service rendered prior to such transfer for which he or she was entitled to credit in the system from which he or she transferred.

(d) Upon becoming a member of the retirement system to which he or she has transferred, such person shall thereafter be eligible for such benefits or annuities as are provided by law in such retirement system, including the credits for previous service in the retirement system from which the person has transferred as provided in subsection (e) of this section. The average final compensation used to calculate the benefit payable at retirement shall be determined by using the earnable compensation which affords the highest consecutive years of earnings under either the system from which or to which he or she transferred. Except for the determination of the average final compensation as set forth in this subsection, the benefits for a member who transferred from one retirement system to another shall be calculated as follows:

(1) a member who transfers after July 1, 2007, and before June 30, 2008, shall have the option to have the service from the first system calculated according to the provisions of either the first or the second system at the time of retirement;

(2) a member who transfers on or before June 30, 2007, or on or after July 1, 2008, shall have his or her benefits calculated according to the provisions of the system or systems under which the benefits were accrued;

(3) when benefits calculated according to the provisions of two or more retirement systems are combined under this subsection, they may exceed the maximum percentage of average final compensation established for each plan.

(e) The Board of Trustees of the Vermont State Retirement System, the State Teachers' Retirement System of Vermont and the Municipal Employees' Retirement System are severally authorized to make such rules and regulations as may be necessary to carry out the provisions of this section.

(f) Such provisions of subchapter 1 of this chapter, 16 V.S.A. chapter 55 and 24 V.S.A. chapter 125 as are inconsistent with the provisions hereof are hereby repealed to the extent of such inconsistency.

(g) If any provision of this section, or the application thereof to any person or circumstance, is held invalid, such invalidity shall not affect other provisions or applications of this section, nor provisions or applications of the statutes to which this section is in addition which can be given effect without the invalid provision or application, and to this end the provisions of this section are declared to be severable. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1981, No. 41, § 21; 2007, No. 13, § 20; 2007, No. 137 (Adj. Sess.), § 3.)