Code of Vermont Rules
Agency 03 - OFFICE OF THE STATE TREASURER
Sub-Agency 030 - STATE TEACHER'S RETIREMENT SYSTEM
Chapter 001 - ALLOWABLE ANNUAL EARNINGS FOR RETIRED TEACHERS
Section 03 030 001 - ALLOWABLE ANNUAL EARNINGS FOR RETIRED TEACHERS
Current through August, 2024
INFORMATION BULLETIN # 2 STATE TEACHERS' RETIREMENT SYSTEM
GROUP A
REGULAR SERVICE RETIREMENT refers to voluntary retirement from service as a teacher in Vermont on attainment of age 60, or in advance of age 60 on completion of 30 or more years of creditable service.
SPECIAL SERVICE (EARLY) RETIREMENT refers to voluntary retirement from service as a teacher in Vermont on attainment of age 55, regardless of years of creditable service, provided the applicant has notified the superintendent of schools in writing 30 calendar days prior to the effective date of the application.
GROUP B
REGULAR SERVICE RETIREMENT refers to voluntary retirement from service as a teacher in Vermont on attainment of age 62.
SPECIAL SERVICE (EARLY) RETIREMENT refers to voluntary retirement from service as a teacher in Vermont on attainment of age 55 and completion of 10 or more years of creditable service, provided the applicant has notified the superintendent of schools in writing 30 calendar days prior to the effective date of the application.
1. APPLICATION
To apply for a retirement benefit, a member must file with the Teachers' Retirement Office the official Form 11 APPLICATION FOR SERVICE RETIREMENT BENEFITS. Any inquiries concerning benefits and requests for Form 11 Application should be addressed to:
Mrs. Constance D. Graves, Assistant Executive Secretary
State Teachers' Retirement System
133 State Street, Montpelier, Vermont 05602
2. DATE EFFECTIVE
Retirement benefit-payment will be effective with the first day of the month following filing of the member's application, or termination of his teaching service, whichever date is later, provided that he has attained retirement age.
If his teaching service has terminated when a member attains retirement age, his benefit-payments will be effective the first of the month following filing of his Form 11 Retirement Application.
3. PAYMENT DATES
Retirement benefits are paid monthly at the end of each month, representing the amount due for the month then ending; for example, if your retirement is effective July 1, the first benefit-payment will be sent on July 31 in payment of the benefit due for the month of July 1-31. Thereafter, your benefit-payments will be sent regularly at the end of each month for as long as you live, unless you return to full-time active teaching service.
4. PAYMENT PLANS
Five payment plans for Group A members and four plans for Group B members are available for election at the time of his retirement: The Maximum Payment providing the largest possible benefit-payment as computed under the Standard Formula, with all payments ceasing at the member's death; OR one of the Option Payments which provide reduced benefit-payments to the member and further payments are governed by the member's age at retirement.
The Teachers' Retirement Office is glad to furnish each member, at his request, with a report providing estimates of his benefit-payments on retirement at a certain date, giving information concerning all plans if the member will furnish the name and date of birth of his proposed beneficiary. We urge members to consider carefully the payment plans available for their election at retirement; these are summarized as follows:
Provides the largest possible benefit-payment to the member for his lifetime, representing the full amount payable on the basis of his membership record. Under this Maximum Payment, all benefit-payments cease at the member's death, except for payment to his beneficiary of the proportionate balance due for the month in which the member's death occurred. The beneficiary designated by the member at retirement may be changed subsequently, if the member so wishes.
Provides a reduced payment to the member for his lifetime with guarantee of the return of the balance of his accumulated contributions, in the event of his death before receiving annuity payments equal to the amount of his accumulated contributions at retirement. At the member's death, monthly benefit-payments are discontinued and his beneficiary receives a cash lump sum payment representing the difference between the member's accumulated contributions at retirement and annuity payments received by the member from the date of his retirement to date of his death. The beneficiary designated by the member at retirement may be changed subsequently, if the member so wishes.
Provides a reduced payment to the member for his lifetime with 50% survivorship benefit-payments (one-half the amount of the member's benefit-payment) continued after the member's death to the beneficiary designated by the member at the time of his retirement, payable for the lifetime of the beneficiary. The beneficiary designated by the member at retirement cannot subsequently be changed if beneficiary dies during the lifetime of the retired member.
OPTION 3-A (50% Survivorship with modification; see * Page 3)
Provides a reduced payment to the member for his lifetime, with 75% Survivorship benefit-payment (three-fourths the amount of the member's benefit payment) continued after the member's death to the beneficiary designated by the member at retirement, payable for the lifetime of the beneficiary. The beneficiary designated by the member at retirement cannot be changed if beneficiary dies during the lifetime of the retired member.
OPTION 4-A (75% Survivorship with modification; see below) *
Provides a reduced payment to the member for his lifetime, with 100% Survivorship benefit-payments (the same amount as the member's benefit payment) continued after the member's death to the beneficiary designated by the member at retirement, payable for the lifetime of the beneficiary. The beneficiary designated by the member at retirement cannot subsequently be changed if beneficiary dies during the lifetime of the retired member.
OPTION 5-A (100% Survivorship with modification; see below) *
* OPTIONS 3-A, 4-A, and 5-A
A modification of survivorship options to provide 50%, 75%, and 100% continuation of benefits to surviving beneficiary; but with the provision that if the beneficiary pre-deceases the member, the benefits to the member shall increase to the amount of the retirement allowance which would have been payable under Option 1. If the beneficiary pre-deceases the member, all benefit payments cease upon the member's death.
LEVEL INCOME PLAN (for members who retire before age 62)
Provides, insofar as possible, the same amount each year before and after age 62 when you would apply for Social Security benefit payable on your earnings record. You elect to convert your retirement allowance normally payable into an actuarially adjusted allowance which, combined with the Social Security benefit you will receive at age 62, will provide approximately the same income before and after age 62. The retirement system pays you a higher amount to age 62, then the amount is reduced to offset the benefit it is estimated you will receive from Social Security. YOU must obtain and send to our office official Social Security Benefit estimate for calculation of allowance under this plan.
5. GROUP HEALTH INSURANCE
The retirement system provides a group health insurance plan through Blue Cross-Blue Sheild. The Retirement Board believes the program offers more complete coverage at lower premiums than most other plans available to retired teachers. The retirement system also pays a flat dollar amount per month towards cost of member's monthly premium; the amount varies as premium costs are adjusted annually but it represents 50% of the lowest monthly premium which would be for one person over age 65 with Medicare.
6. EMPLOYMENT AFTER RETIREMENT
You may be employed after retirement in any work except regular full-time employment as a teacher in Vermont in school systems participating under the State Teachers' Retirement System (and still continue to receive your benefit-payment). By Board regulation, you may, without effect upon receipt of your benefit-payments and without payment of teacher-retirement contributions, be regularly employed as a part-time or substitute teacher provided that your salary for such combined service does not exceed one-half of the average salary per member as recorded for the preceding year. The law provides for suspension of retirement allowance if a retired member exceeds limitations. The suspension will be for the period necessary to equal excess compensation earned.
If you wish to return to regular employment as a full-time teacher in Vermont in a school system covered under the System, you may do so by suspending your retirement benefit-payments and re-enrolling as an active member with credit for previous service. At the time of your later retirement, the benefit-payment is recomputed to include additional service.
7. PREPARATION OF INCOME TAX RETURNS
Retirement allowance payments are subject to State Income Tax based on Federal Income Tax provisions; necessary information is furnished on our Form 25 sent to each member with his Certificate of Retirement.
- Group B (non-contributory) retirement payments are fully taxable.
- Group A (contributory) retirement payments are in one of two categories:
Our office is unable to assist or advise in preparation of member's tax returns; we recommend you consult your accountant or attorney or Federal and State authorities, for any other information desired concerning taxation of allowance you receive from the State Teachers' Retirement System.
Each January you will receive a Form W-2P advising you of the amount of pension/annuity paid during the previous calendar year; copies are furnished by the employer to Internal Revenue Service. It should be remembered that the check dated December 31 will be included in that calendar year total, even though you did not receive it until January.
You may request withholding of money from your monthly check for Federal and/or Vermont taxes. A signed statement stating amount to be withheld received before the 15th of any month can reduce amount payable at the end of the current month and thereafter until notice of change is received.
8. ELECTRONIC AND DIRECT DEPOSIT BANKING OF PENSION
The retirement office has the capability of electronically or manually depositing your monthly pension check to your savings or checking account. If you are interested in using this service, please send written notice at the time your retirement application (Form 11) is submitted to this office.
