(a) The general administration and responsibility for the proper operation of the Retirement System and for making effective the provisions of this subchapter are hereby vested in a board of eight trustees, known as the Retirement Board. The Board shall consist of the Governor or his or her designated representative, the State Treasurer, the Commissioner of Human Resources, the Commissioner of Finance and Management, three members of the Vermont State Employees' Association who are members of the System, each to be chosen by such Association in accordance with its articles of association and bylaws or policies for a term of two years, and one retired State employee who is a beneficiary of the System, to be elected by the Vermont Retired State Employees' Association for a term of two years. If a vacancy occurs in the office of a chosen member, the vacancy shall be filled for the unexpired term in accordance with the articles of association and bylaws or policies of the association affected by the vacancy. In the absence of a member of the State Employees' Association or the Retired State Employees' Association, the respective association may designate a person who is a member of the Association to attend a meeting or meetings of the Retirement Board in place of the absent member. A person so designated shall have the same voting rights and responsibilities as the absent member he or she is representing at such meeting or meetings, except that the person shall not automatically assume the trustee's place as an officer of the Board.

(b) The trustees as such shall serve without compensation, but they shall be reimbursed from the funds of the Retirement System for all necessary expenses that they may incur through service on the Retirement Board.

(c) Each trustee shall be entitled to one vote in the Retirement Board. Five 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, the Commissioner of Finance and Management, and the Commissioner of Human Resources each may designate in writing a person within the trustee's office or department to attend a meeting or meetings of the Retirement Board in the Treasurer's or the Commissioner'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 ex officio trustee at such meeting or meetings except that the designee shall not automatically assume the trustee's place as an officer of the Board.

(d) Subject to the limitations of this subchapter, 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 and distribute to the General Assembly 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. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection.

(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 subchapter, shall investigate all essential medical statements and certificates by or on behalf of a member in connection with a claim of disability or accidental and occupationally-related death, and shall report in writing to the Retirement Board of its conclusions and recommendations upon all such matters.

(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. 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 subchapter. 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 subchapter.

(k) 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.

(l) The Committee shall designate from time to time a depositary 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 (m) of this section, at any time by the custodian or any authorized agent of the State for audit or other purposes.

(m) The 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.

(n) The Board shall review annually the amount of State contribution recommended by the actuary of the Retirement System as necessary to achieve and preserve the financial integrity of the fund established pursuant to section 473 of this title. Based on this review, the Board shall recommend the amount of State contribution that should be appropriated for the next fiscal year to achieve and preserve the financial integrity of the fund. On or before November 1 of each year, the Board shall submit this recommendation to the Governor and the House and Senate Committees on Government Operations and on Appropriations. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1987, No. 92, § 2, eff. June 23, 1987; 1991, No. 151 (Adj. Sess.), §§ 1, 2; 191, No. 265 (Adj. Sess.), § 1; 1995, No. 36, § 1; 1999, No. 158 (Adj. Sess.), § 23; 2001, No. 116 (Adj. Sess.), § 5b, eff. May 28, 2002; 2003, No. 38, § 4; 2003, No. 122 (Adj. Sess.), § 294g; 2003, No. 156 (Adj. Sess.), § 15; 2005, No. 48, § 1; No. 50, § 4; 2007, No. 13, § 8; 2013, No. 142 (Adj. Sess.), § 8; 2013, No. 161 (Adj. Sess.), § 72.)