Accumulated contributions
What you paid in, plus the regular interest credited to your account. The Board sets the rate between 3% and 5%.
Annuity and pension
The two parts of your benefit. The annuity comes from your own contributions; the pension is paid by the System.
Average final compensation (AFC)
The average of your three highest consecutive years of earnings.
COLA
The yearly cost-of-living adjustment each January (the law calls it a postretirement adjustment).
Creditable service
Membership service plus purchased, military and other service the law allows, and service transferred under 3 V.S.A. § 495.
Earnings cap
The most a retired teacher can earn teaching in Vermont in a fiscal year without freezing the pension.
Exclusion ratio
The share of each payment not taxed because it returns after-tax contributions.
Group C #1
A Group C member who was age 57 or had 25 full years of service on June 30, 2010 (also called grandfathered).
Group C #2
A Group C member who was under 57 with less than 25 years of service on June 30, 2010, or who joined later.
Level Income Option
More from VSTRS before 62 and less after, to even out your income around Social Security.
Option 1
The basic or maximum benefit, paid for your life only.
Pop-up
A feature of Options 3, 4 and 5 that raises your payment to the Option 1 amount if your beneficiary dies first.
Rule of 90
For Group C #2, unreduced retirement when your age plus your years of service equal 90.
Vested
Having 5 years of service, so you keep the right to a benefit if you leave.
No terms match. Try a shorter word.
Plain English, not the official wordingThese definitions put the Treasurer's VSTRS handouts and Vermont law into everyday words. They aren't official definitions, and they aren't legal or financial advice. VSTRS decides your benefit.
Source: VSTRS Eligibility for Retirement: Group C #2 handout (Office of the State Treasurer), undated (PDF of Sept. 21, 2012), with 16 V.S.A. chapter 55 as of the 2026 session, pp. 1, 2, 3, 4, 5, 6; Sept. 2023 newsletter p. 1; Group C #1 handout p. 1; 16 V.S.A. §§ 1931, 1943, 1949. Last reviewed .