Overview of State Administered Pension Plans

State Employee Retirement System (SERS)

SERS is a single-employer defined-benefit pension plan covering most of the State’s full-time employees. The plan also covers members of the General Assembly, constitutional officers and the Governor. SERS is provided largely in accordance with the collective bargaining agreement negotiated between the State and the State Employee Bargaining Agent Coalition (SEBAC). SEBAC is comprised of thirteen unions, and was recognized in 1986 by Public Act 86-411 to negotiate with the State on health benefits and retirement issues. According to the most recent actuarial valuation as of June 30, 2012, there were 43,887 retirees and beneficiaries receiving benefits, 1,561 deferred plan members entitled to, but not yet receiving benefits, and 47,868 active employee plan members.

Judges, Family Support Magistrates and Compensation Commissioners Retirement System

The Judicial Retirement System (JRS) is a single-employer defined-benefit pension plan covering any appointed judge, family support magistrate or compensation commissioner in the state. The plan provides retirement, disability and death benefits and annual cost-of-living adjustments to plan members and their beneficiaries. As of June 30, 2012, there were 239 retirees and beneficiaries receiving benefits, 2 deferred plan members entitled to, but not yet receiving benefits, and 204 active plan members.

Alternate Retirement Program (ARP)

The State also sponsors the Alternate Retirement Program (ARP), a defined-contribution plan available to unclassified employees at any units of the Connecticut State System of Higher Education. Plan members are required to contribute 5 percent of their annual salaries, with the State contributing 8 percent of covered salary.

The following table outlines the plan detail for the three retirement programs mentioned above:

Plan Component SERS Tier I SERS Tier II SERS Tier IIA SERS Tier III ARP JRS
Members State employees hired before July 1, 1984. State employees hired between July 1, 1984 and June 30, 1997. State employees hired between June 30, 1997 and July 1, 2011 State employees hired after July 1, 2011 Unclassified employees of the constituent units of the state system of higher education and central office staff of the Dept. of Higher Ed Any appointed Judge, Family Support Magistrate, or Compensation Commissioner
Social Security Coverage Yes Yes Yes Yes Yes Yes
Vesting Period 5 years 5 years 5 years 5 years N/A 10 years
Employee Contribution (% of Salary) Regular – 2% Hazardous duty - 4% (5% if not paying into Social Security) Regular - 0% Hazardous duty - 4% Regular – 2% Hazardous duty – 5% Regular – 2% Hazardous duty – 5% 5% 5%
State Normal Cost Contribution (% of Member) Regular –8.9 to 12.5%
Hazardous duty - 0%
Regular – 8.0%
Hazardous duty – 13.9%
Regular – 4. 2%
Hazardous duty – 7.8%
Regular – 3.1%
Hazardous duty – 2.2%
8%
Hazardous duty - 0%
20.1%
Types of Retirement & Qualifications
(Age/Years of Service)
Normal: 55/25, or 60/10;
Age 70: 70/5;
Early: 55/10;
Hazardous duty: any/20
Normal: 63/25 vesting; 65/10 vesting***
Age 70: 70/5 vesting
Early: 55/10 vesting
Hazardous Duty: Any/20
Normal: 63/25 vesting; 65/10 vesting***
Age 70: 70/5 vesting
Early: 55/10
Hazardous Duty: Any/20
Normal: 63/25 vesting; 65/10 vesting;
Age 70: 70/5 vesting
Early: 58/10
Hazardous Duty: 50/20 or Any/25
N/A Normal: Hired Before July 1, 2011: Age 65 or 20 years of service or 30 years of state service with 10 years as a Judge, Magistrate or Compensation Commissioner. Hired After July 1, 2011: Age 65/10 vesting, 63/25 vesting or 30 years/any.Mandatory retirement age 70.
Final Average Salary (FAS) 3 highest-paid years 3 highest-paid years 3 highest-paid years 5 highest-paid years N/A Members hired before July 1, 2011: Base salary plus percentage of longevity payments based on years of service. Members hired after July 1, 2011: FAS of 5 years preceding retirement.
Annual COLA Yes Yes Yes Yes No Yes
Normal Benefit Formula 2% x FAS x years 35 years or less: 1.33% x FAS + . 5% x FAS above annual breakpoint** x years More than 35 years: add 1.625% x FAS x years over 35 35 years or less: 1.33% x FAS + . 5% x FAS above annual breakpoint** x years. More than 35 years: add 1.625% x FAS x years over 35 35 years or less: 1.33% x FAS + . 5% x FAS above annual breakpoint** x years. More than 35 years: add 1.625% x FAS x years over 35 Depends upon the individual account balance at the time an employee is looking to use the assets. 66-2/3% of final compensation reduced for less than 10 years of service by a ratio of service to actual retirement divided by service to age 70, or 10 years, whichever is less.
**If an employee's salary is above the annual breakpoint number, the difference between the salary and the breakpoint becomes an additional part of the retirement formula.
***The 2011 SEBAC Agreement included a one time election for employees in Tier II and Tier IIA to retain normal retirement age of 60/25 or 62/10, at the full actuarial cost to the employee. In addition, pre-SEBAC 2011 eligibility applies to those employees who retire prior to July 1, 2022.

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