H.8567 would shift oversight of OPEB assets to VPIC and temporarily redirect small unclaimed‑property transfers to Vermont Saves

Montpelier — Lawmakers on the Senate Committee on Government Operations took a first look Thursday at H.8567, a technical but wide‑ranging bill that would move fiduciary oversight of certain post‑employment benefit assets from the state treasurer to the Vermont Pension Investment Commission (VPIC), change how small unclaimed property is processed, and redirect limited unclaimed‑property transfers to the Vermont Saves retirement program.

Representative Nat Byram, the bill’s reporter and lead sponsor, told the committee the legislation grew from months of work with counsel and the treasurer’s office and is largely technical in nature. “It’s touching on a range of things from unclaimed property, increasing thresholds. It is reorganizing a lot of sections of law,” Byram said, adding that positions included in the bill would be funded from the affected funds rather than the general fund.

Legislative Council staff walked the committee through the most consequential pieces. The bill would raise the threshold that triggers certain unclaimed‑property procedures (for example, increasing a small automatic‑return threshold from $100 to $150) and, for certain long‑unclaimed items, redirect the annual transfer of up to $300,000 to the Vermont Retirement Security Fund (the fund that administers the Vermont Saves program) rather than to the Vermont Higher Education Endowment Trust Fund. That diversion would be temporary: the bill sunsets the change in 2040 and returns the transfers to the higher‑education trust fund after that date.

“The cap would allow the treasurer’s office to maintain money and then distribute it over future years rather than sweeping a large amount in the first year,” Cameron Wood of Legislative Council said, explaining the drafters’ rationale for a $300,000 annual cap.

The bill also proposes operational changes meant to speed claims processing: raising an administrative waiver threshold from $250 to $1,000 and increasing the estate‑distribution threshold from $5,000 to $10,000, among other adjustments. Albert Burrow of the treasurer’s office described those changes as consumer‑facing improvements that would reduce paperwork and make it easier to return money to individuals or a single heir.

Treasurer’s office officials also explained the Vermont Saves funding mechanics. Deputy Treasurer David said the treasurer’s office expects Vermont Saves to reach self‑sufficiency in fiscal 2033 and presented enrollment data: “It’s gone from $0 accounts to nearly 6,000, about 5,800,” he said, with roughly $6 million under management since the program opened. Under the proposal, unclaimed‑property transfers would supplement program revenue early on while the program builds scale.

A major structural change in H.8567 is moving statutory language that governs the fiduciary and administrative oversight of state employee and teacher post‑employment benefit (OPEB) trust funds into VPIC’s chapter so VPIC would serve as custodian and fiduciary for those assets. Legislative Council emphasized most of the language is being relocated rather than substantively rewritten; proponents said consolidating oversight with VPIC aligns investment strategies for OPEB assets and pension liabilities.

VPIC’s chief investment officer, Eric Henram, told the committee VPIC manages roughly $8 billion across statewide plans and supports H.8567 because aligning OPEB assets with pension liabilities can improve strategic investment decisions. “We received about $8,000,000,000 in investments for the 3 statewide pension plans and the supplemental teachers COLA plan,” Henram said, and cited a recent 10.7% net return in the past fiscal year as evidence of the commission’s recent performance.

Committee members pressed VPIC on accountability and policy limits for certain investments after a member cited a February purchase of roughly $826,000 in Israeli government bonds. A committee member asked how VPIC ensures investments do not run counter to state policy on human‑rights or genocide risks. Henram responded that VPIC has no absolute prohibition on such sovereign purchases, but said the commission relies on a stewardship committee, engagement with managers, and compliance checks (including lists maintained by federal authorities such as the Office of Foreign Assets Control) to surface and manage nonfinancial risks. He also said VPIC had requested an additional staff position to increase scrutiny of newly added assets and that the House has supported funding for that position.

Several senators sought clarity on what the transfer to Vermont Saves would mean for higher‑education scholarships. Deputy Treasurer David and Legislative Council materials showed a temporary dip in transfers to the higher‑education endowment in the near term but projected that, because of the $300,000 cap and the program’s growth, the higher‑education trust fund would receive more over the long term than under current law.

The bill creates a one‑year pension benefits funding task force to examine funding methodologies for state retirement systems; the bill’s text specifically prohibits that task force from making recommendations on member benefits, contribution levels or assumed rates of return.

No committee votes were taken on H.8567 at Thursday’s session. Sponsors and agency witnesses said they would return with more details as requested; the committee took a 10‑minute recess before moving to other agenda items.

Sources: Testimony and presentations from Representative Nat Byram (bill reporter), Cameron Wood (Legislative Council), Deputy Treasurer David (Treasurer’s Office), Albert Burrow (Treasurer’s Office Bank Property program) and Eric Henram (Chief Investment Officer, VPIC).