Vermont Public Employee Pension Survivor Benefits: VSERS, VSTRS, and VMERS

If your spouse worked for the State of Vermont, taught in a Vermont public school, or served in a Vermont municipal role, their death triggers specific survivor pension rights under one of three state retirement systems. These benefits can mean the difference between financial stability and crisis — but they require active steps to claim.

The three systems are:

• VSERS — Vermont State Employees' Retirement System (state government workers, including Vermont State Police)
• VSTRS — Vermont State Teachers' Retirement System (public school teachers)
• VMERS — Vermont Municipal Employees' Retirement System (town and city employees)

Each operates as a defined benefit plan funded through combined employer and employee contributions over the course of a career.

How Survivorship Works: The Option Your Spouse Chose at Retirement

The survivor benefit you receive depends almost entirely on which survivorship option the employee selected when they first retired. This election was made by your spouse — often years before their death — and it controls the amount you receive now.

The most common options across VSERS, VSTRS, and VMERS are:

100% Survivorship (Option 3 or equivalent): The employee accepted a slightly reduced pension during their lifetime so that you, as the surviving spouse, receive the full benefit amount after their death. This is the most protective option for surviving spouses.

70% Survivorship (Option 4 or equivalent): You receive 70% of the employee's benefit amount after their death. The employee's pension was higher than under the 100% option.

50% Survivorship (Option 5 or equivalent): You receive 50% of the employee's benefit. The employee's pension during their lifetime was the highest of the three options.

Pop-Up Provision (Options 3A, 4A, 5A): These variants contain a "pop-up" clause — if you predecease the retiree, the pension reverts to the maximum payable amount. If you have survived the retiree, this clause no longer applies.

To determine which option your spouse selected, contact the Vermont State Retirement Office directly. They maintain the election on file.

Dependent Children's Benefits

In addition to the spousal survivorship pension, VSERS, VSTRS, and VMERS all provide a separate benefit for dependent children. The standard provision is a pension equal to 10% of the deceased employee's Average Final Compensation (AFC), with a minimum floor of $50 per month per child.

This child benefit is payable to up to three dependent children concurrently. It continues until the child reaches age 18, or age 23 if the child is a full-time unmarried student.

If the deceased employee had no surviving spouse but left dependent children, the system directs the entire survivorship pension toward the children's benefit.

Health Insurance Continuation

One of the most significant and frequently overlooked benefits involves the continuation of state health insurance. Vermont's group health insurance plan covers active employees and retirees — and surviving spouses in some circumstances.

The mechanics work like this: the employee or retiree was paying approximately 20% of the premium while covered as a state employee or retiree. As a surviving spouse, you may continue this coverage, but your premium share typically shifts to 100% unless you meet specific age or Medicare thresholds.

Contact the Vermont State Retirement Office before making any decisions about alternative health coverage. Losing this connection is difficult or impossible to reverse.

How to Initiate the Claim

Survivor pension benefits do not transfer automatically at death. The process requires:

1. Contact the Vermont State Retirement Office immediately — the office is housed within the Office of the State Treasurer at vermonttreasurer.gov
2. Request the survivor beneficiary forms — these must be notarized and submitted by physical hard copy to the Retirement Office (electronic filing is not accepted for these initial beneficiary transfers)
3. Provide certified copies of the death certificate — have several on hand
4. Provide your own Social Security number and banking information for direct deposit setup

Delays in initiating this claim delay your benefit payments. The pension does not accrue during the application period and begin delivering retroactively — start the process as soon as possible.

Annual Cost-of-Living Adjustments

Most VSERS and VSTRS beneficiaries receive automatic annual cost-of-living adjustments (COLAs) tied to inflation. These COLAs preserve the purchasing power of the survivor pension over time and are applied automatically without any action required from you.

The VMERS COLA structure varies by group and should be confirmed with the retirement office for your specific plan.

The Level Income Option Complication

If the deceased employee chose the "Level Income Option" while alive, their pension was structured to be level across their working years — with a higher payout before age 62 and a reduced payout afterward, when Social Security was assumed to kick in.

If a survivorship option was elected alongside the Level Income Option, the survivor benefit is calculated based on the benefit prior to the Level Income Option adjustments, which can produce unexpected monthly amounts. The Vermont State Retirement Office can run the exact calculation for your situation.

What to Do If Your Spouse Died Before Retiring

If the employee died before retirement — while still actively working — different rules apply. Most systems provide a "pre-retirement death benefit" which may include a lump-sum payment of the employee's accumulated contributions plus interest, or a continuation benefit to the named beneficiary.

Contact the retirement system immediately. The form structure and benefit calculations differ from post-retirement survivor claims.

The pension notification process is just one piece of the full survivor benefits picture. Vermont families navigating a public employee death also need to address Social Security coordination, estate probate (if assets exceed $45,000), property tax declarations, and potentially Medicaid estate recovery. The Vermont Survivor Benefits Navigator covers all of these systems in a single sequenced guide — including the exact forms, contacts, and deadlines for VSERS, VSTRS, and VMERS claims.

See more Vermont guides →