The formula
Yearly benefit = average final compensation × benefit percent. Your benefit percent adds up, year by year:
- 1.25% for each year of Group B service before July 1, 1990
- 1.67% for each year of Group C service from July 1, 1990
- Group C #2 only: 2% for each year after July 1, 2010 once you have 20 years in total
The most you can get is 60% (Group C #2) or 53.34% (Group C #1, with service through June 30, 2010 counting toward at most 50%). Group C #2 handout, p. 3 (maximum benefit cannot exceed 60% of AFC); Group C #1 handout, p. 3 (cannot exceed 53.34% of AFC); 16 V.S.A. § 1937(c)(1)(B)-(C), (c)(2)(C); 2025 valuation, p. 58, Exhibit H
This full amount, for your life only, is called Option 1 or the maximum benefit. Group C #2 handout, p. 4, Retirement Options; 16 V.S.A. § 1941(a)(1)(A), (a)(2)
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.
Group C #1 handout, pp. 2-3; Group C #2 handout, pp. 2-3; 16 V.S.A. § 1937(c)Two worked examples from the Treasurer
Group C #1, 30 years
Salaries $39,000, $42,000, $45,000 → average final compensation $42,000. 20 years of Group B and 10 of Group C.
20 × 1.25% + 10 × 1.67% = 41.7% × $42,000 = $17,514 a year, $1,460 a month
Matches Handout: $17,514 a year, about $1,460 a month.
Group C #1 handout, pp. 2-3, Calculating Your Retirement Benefits, Normal RetirementGroup C #2 formula, 30 years at age 60
Average final compensation $42,000. 20 years of Group B, 8 of Group C, and 2 after July 1, 2010 (past 20 years, so at 2%). Age 60 + 30 years = 90: no reduction.
20 × 1.25% + 8 × 1.67% + 2 × 2% = 42.36% × $42,000 = $17,791 a year, $1,483 a month
Matches Handout: $17,791 a year, about $1,483 a month.
Group C #2 handout, pp. 2-3, Calculating Your Retirement Benefits, Normal RetirementThe 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 handout, pp. 1-3Benefit percent by years of service
| Years | Group C #2 (joined after June 30, 2010) | Group C #1 (all service by June 30, 2010) |
|---|---|---|
| 10 | 16.7% | 16.7% |
| 15 | 25.05% | 25.05% |
| 20 | 33.4% | 33.4% |
| 25 | 43.4% | 41.75% |
| 30 | 53.4% | 50% (max) |
| 33 | 59.4% | 50% (max) |
| 35 | 60% (max) | 50% (max) |
Computed with this site's engine from the formula above. A Group C #1 member with service after June 30, 2010 can go above 50%, up to 53.34%. Group C #2 handout, pp. 2-3, Calculating Your Retirement Benefits; Group C #1 handout, pp. 2-3; 16 V.S.A. § 1937(c)(1)-(2); 2025 valuation, p. 58, Exhibit H
Average final compensation
Average annual earnable compensation over the three consecutive fiscal years (July 1-June 30) of creditable service with the highest average (all years if fewer than three). A partial final fiscal year is completed with service from the earlier year. Part-time pay is annualized. Any increase of more than 10% in a year used is excluded. Payments in lieu of benefits are excluded, and for Group C so are unused annual or sick leave, termination bonuses and other pay for service not actually performed. Picked-up member contributions are not deducted from pay for this purpose. 16 V.S.A. § 1931(4) (average final compensation), (8) (earnable compensation); 16 V.S.A. § 1944(h); 2025 valuation, p. 57, Exhibit H; Treasurer, Pension Group Plan Comparison (Mar. 16, 2021), p. 5
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.
16 V.S.A. § 1931(4)(B)What the sources say
- Your yearly benefit is a percent of your average final compensation (AFC) for each year of service: 1.25% for any Group B service before July 1, 1990, and 1.67% for Group C service from July 1, 1990.Group C #2 handout, p. 2, Calculating Your Retirement Benefits; Group C #1 handout, p. 2; 16 V.S.A. § 1937(c)
- Group C #2: from July 1, 2010, each year of service after your 20th earns 2% instead of 1.67%. Your benefit cannot be more than 60% of AFC.Group C #2 handout, pp. 2-3; 16 V.S.A. § 1937(c)(2)
- Group C #1: your benefit cannot be more than 53.34% of AFC, and service through June 30, 2010 counts toward at most 50%.Group C #1 handout, p. 3; 16 V.S.A. § 1937(c)(1)
- Handout example (Group C #1): AFC $42,000 with 20 years of Group B and 10 years of Group C service: 20 x .0125 x $42,000 + 10 x .0167 x $42,000 = $17,514 a year, about $1,460 a month.Group C #1 handout, pp. 2-3
- Handout example (Group C #2): AFC $42,000 with 20 years of Group B, 8 years of Group C and 2 years after July 1, 2010 at 2%: $17,791 a year, about $1,483 a month.Group C #2 handout, pp. 2-3
- The full benefit for your life is called Option 1, or the maximum benefit. You can take less to provide for a survivor.Group C #2 handout, p. 3
- Group A: 1/60 (1.67%) of AFC per year of creditable service, with a minimum benefit set in the statute.2025 valuation, p. 58, Exhibit H; 16 V.S.A. § 1937(b)(2)
- Average final compensation (AFC) is the average of your three highest consecutive years of earnings. Salaries of $39,000, $42,000 and $45,000 give an AFC of $42,000.Group C #2 handout, p. 2; 16 V.S.A. § 1931(4)(A)
- The years are fiscal years (July to June). Any raise of more than 10% in one of those years is not counted. For Group C, payouts for unused sick or annual leave, termination bonuses and other pay for work not actually done are also left out. Part-time pay is annualized.16 V.S.A. § 1931(4)(A)-(C)
Your group decides which rate and cap apply: see which group am I? The formula gives the unreduced Option 1 amount; retiring early and a survivor payment option reduce it, and one more year adds to it.
Questions
What percent of my salary will my VSTRS pension be?
About 1.67% of your average final compensation for each year of Group C service. With 30 years that is 53.4% for a Group C #2 teacher who joined after June 30, 2010 (because years past 20 earn 2%), up to a 60% maximum.
What is average final compensation?
The average of your three highest consecutive years of earnings. For example, salaries of $39,000, $42,000 and $45,000 give $42,000.
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. 2, 3; Group C #1 handout pp. 2, 3; 2025 valuation pp. 57, 58; 16 V.S.A. §§ 1931, 1937, 1944. Last reviewed .