How we calculate VSTRS estimates

Grandfathered Group C maximum: the statute and the valuation say 53.34% of AFC (50% for service through June 30, 2010), as did the 2021 Treasurer chart. The Apr. 2026 comparison chart prints 55.34%. The engine uses 53.34% (statute).

Group A: the statute defines the pension as 1/120 of AFC per year of membership service plus an annuity from contributions. The valuation and the 2021 chart give the combined benefit as 1/60 (1.67%) of AFC per year. The engine uses 1/60.

Group A COLA: the statute pays the full net CPI increase only if it is at least 1% (otherwise nothing). The 2021 chart says 'minimum of 1%', and the valuation says only 'less than 0%: no increase'. The engine follows the statute.

Pre-2022 Group C: the statute says an adjustment of less than 1% is assigned 1%. The valuation's plan summary gives no floor ('less than 0%: no increase'). The engine uses the statute's 1% floor when the net CPI is positive.

The valuation's assumptions start COLAs for reduced early retirees after age 62 (p. 49), but its plan summary (p. 61) says age 65 for non-grandfathered members. The statute says normal retirement age. The engine uses 62 (grandfathered) and 65 (non-grandfathered).

The JFO memo's footnote credits the 4% maximum to 'Act 114 (2016) and Act 173 (2022)'. The 2022 enacted text puts it in Act 114 of 2022 (Sec. 23). Act 173 made technical changes.

Act 114 as enacted set a marginal-rate schedule from FY2025. Current statute and the valuation show eight flat brackets (6.15%-7.35%) applied to total pay. The later amendment controls.

Group A early retirement: the statute requires only age 55; the plan charts say age 55 with 5 years. The engine uses age 55 (statute). In practice every Group A member has far more than 5 years.

Group C rate: the handouts print .0167 and all four worked examples match 1.67% to the dollar (Group C #1 normal: $17,514; with 1-2/3% it would be $17,500). The statute and the Treasurer's 2021 chart say 1-2/3%. Handouts are primary, so the engine uses 1.67%. The difference is about 0.2% of the benefit.

The Group C #2 handout's normal-retirement example has 20 years of Group B and 8 of Group C service before July 1, 2010, i.e. 28 years on June 30, 2010. By the handout's own definition (p. 1) that member would be Group C #1, not #2. The arithmetic follows the Group C #2 formula (2% for the years after July 1, 2010, past 20). The test checks that formula directly; the calculator would classify such a member as Group C #1.

Group C #2 early reduction: the handout says the actuarial reduction is applied for each month under age 65. The valuation says 'from normal retirement age', which for a rule-of-90 member could be earlier than 65. Handout followed: the engine counts months under 65.

Taxes: the handouts say most of the benefit is taxable, with an exclusion only for after-tax contributions, and the 2021 newsletter shows Vermont state tax withheld on the 1099-R. The statute (16 V.S.A. § 1946) says VSTRS allowances are 'exempt from taxation, including income tax'. Handout followed; the site does not say the benefit is tax-exempt.

Vested benefit for Group C #2: the handout says it is payable at 65, or from 55 with a penalty. The statute also lets it start when age plus service equals 90. Not a contradiction (the handout omits it); the guides mention both.

Group C #1 normal retirement: the handout says age 62 or 30 years, with no service condition. The statute requires five years for the age-62 rule only for members hired on or after July 1, 2004. The engine keeps the statute's narrower condition.

COLA: the 2012 handouts give one Group C rule (12 checks, 5% ceiling, 1% minimum). Act 114 of 2022 added a 24-month wait and a 4% maximum with no minimum for members first eligible and leaving on or after July 1, 2022. The later law controls for that cohort; the handouts still match the statute for everyone else.

The pre-2022 Group C 1% COLA minimum appears in the statute and in both handouts, and the calendar 2021 COLA (Groups B and C 1.00%, Group A 0.0%) fits it. Only the valuation's plan summary omits it. The engine uses the 1% minimum.

VSTRS doesn't publish a member handbook. Our main sources are the Treasurer's Group C retirement handouts (from 2012), newer Treasurer notices, and Vermont law.

We use the handouts where they speak, and the law where they don't or where a later law changed the rule.

For Group C #2, VSTRS cuts an early benefit by an actuarial amount for each month you are under 65. It publishes only one example factor: .555434 at age 58 and 3 months.

We show your unreduced amount. We compute the reduced amount only at that published age, or with a factor you type in from your VSTRS estimate.

Group A early benefits use an actuarial reduction VSTRS doesn't publish.

We show the unreduced amount, or a reduced one if you enter a factor from VSTRS.

The rule of 90 adds your age and your service. VSTRS doesn't say whether it counts part-years of age.

We count your age in whole months (60 years 6 months = 60.5).

The Group C #1 handout doesn't say you need 5 years to retire at 62. The law says so for members hired on or after July 1, 2004.

We require 5 years at 62 only if you joined on or after July 1, 2004.

Your group depends on your age and service on June 30, 2010.

If you don't enter your service on that date, we assume you worked without a break from the date you joined.

Since Act 114 of 2022, Group C members first eligible to retire, who leave on or after July 1, 2022, wait 24 months for a COLA and have a 4% maximum.

We estimate whether you were eligible by June 30, 2022 by counting your service back from your retirement date.

The most recent earnings cap we have is for fiscal 2024: $41,200. It is reset every year.

We show the fiscal 2024 figure as an example only. Ask VSTRS for this year's cap before you go back to work.

The program that let retirees work as interim educators and keep their benefit ended June 30, 2026, as far as the sources show.

We describe it as ended.

VSTRS doesn't publish the factors for Options 2-5. The handouts give one example for each group and typical ranges.

We show your Option 1 amount and the handout example scaled to it as an illustration, clearly labeled. Your real factors depend on both ages.

VSTRS doesn't publish what buying a year of service costs.

We explain the rules and show what a year adds to your benefit, not the price.

The interest VSTRS credits (set between 3% and 5%) and how much of it you lose on a refund aren't published.

We show the legal limits: you get at least two-thirds of the interest.

VSTRS says most of your benefit is taxable, and it can withhold Vermont state tax. No source we have says how Vermont taxes it, or whether any Vermont exemption applies.

We say only what VSTRS says. Ask the Vermont Department of Taxes or a tax adviser about Vermont tax.

No VSTRS source says outright whether your teaching job pays into Social Security. The handouts assume you'll probably have a Social Security benefit at 62.

We don't say either way. Check your Social Security statement at ssa.gov.

The law sets the share VSTRS pays toward retiree health coverage, but the premiums aren't in our sources.

We show the percentages only.

Group A has a minimum benefit in the law that we don't calculate.

We use the regular Group A formula.

Raises over 10% in a year don't count toward your average final compensation, but VSTRS doesn't explain exactly how it applies this.

You enter your own average final compensation.