What Types of Connecticut State Pensions are offered?
The state of Connecticut administers the pension plans offered for state employees. The three largest pension plans offered are:
- The State Employees’ Retirement System (SERS) is offered for all employees of state public service organizations who do not fit into any other offered pension plans.
- The Teachers’ Retirement System (TRS) is offered to all state employees currently employed by a public education institution. This includes public school teachers and university professors.
- The Judicial Retirement System (JRS) is offered to all state justices, both appointed and elected.
In addition to these three main pension plans, the state also administers pension plans for judges of the Connecticut probate court system and for municipal transportation employees. More information about these pension plans is available through the state comptroller’s office.
As of 2013, the Connecticut pension plans were only funded at a level of 55%, which is far below the recommended federal level of 80%. However, the Connecticut state government has recently began to take measures to address the state budgetary crisis in regard to pension plans. The 55% ratio is actually a 3 point increase from the previous year, and optimism is high that this trend will continue in a positive direction.
Benefits of the SERS Pension Plan
Members of the SERS program are first divided into several different tiers, depending on their hiring date. Employees hired on or before July 1, 1984 are considered to be Tier One. Tier Two employees were hired between July 1, 1984 and June 30, 1997. There is also a Tier Two A option for employees who were hired between 1997 and 2011. Lastly, Tier Three is any employee hired on or after July 1, 2011.
- The standard rate of contribution for these programs is 2% of an employee’s annual income. The only difference is for Tier One employees who may opt to contribute up to 5% of their annual income. The remainder of an employee’s retirement fund is matched by the state.
- Service is calculated in terms of creditable years. For any Tier, members become vested after accumulating 10 years of creditable service. There are also options for members to purchase additional service credit. Circumstances that count for additional purchase include past military service, out-of-state government service, qualifying leaves of absence, and restored credit earned at past state employment. Breaks in employment that cannot be explained under these categories do not count towards service years. The SERS administration can provide more information about any specific circumstance in question.
- The normal retirement age for the SERS program is 65 with at least 10 years of vested service. The exception is for Tier Two members, who may retire at age 62 with 10 years of vested service. Early retirement is available at age 55 for Tier One and Two members who have at least 10 years of vested service or at age 58 for Tier Three members with 10 years of service.
- Any Tier member may retire at age 70 with only 5 years of required creditable service.
There are some additional special circumstances for early retirement. Members who are employed in a hazardous line of work may retire at any age when they have accumulated at least 20 years of service.
Additionally, SERS members may receive disability benefits after achieving 5 years of creditable service if they become disabled during their government service. If a member becomes disabled as a result of work, there is no minimum service requirement to retire.
The SERS program offers the following benefit to survivors and beneficiaries of members, in the event of a member’s untimely death.
- If a member was eligible for normal retirement, the spouse or beneficiary is eligible to receive a monthly benefit, calculated based on the member’s age and years of service.
- If a member had at least 25 years of vesting service at the time of their death, their spouse is eligible to receive a monthly retirement benefit, as well.
- In the event of a job-related death, the state will may $100,000 to the member’s surviving family, paid out in installments over a 10 year period. In the event that the member is only survived by a spouse, the state will pay out $50,000 in installment payments.
SERS employees with at least 10 years of creditable service are eligible to receive a Cost of Living Adjustment, paid out annually after the first 9 months of retirement. This COLA is calculated annually and ranges from 2% to 7.5%.
Employees who terminate employment prior to retirement are still eligible to receive their normal monthly benefit if they have attained vesting status. If an employee is not vested, they will instead receive compensation for their contributions, including 5% compounded interest.
Basic TRS Requirements and Benefits
The Teacher’s Retirement System is the other main state-offered pension plan. Under this plan, all employees are required to contribute 7.25% of their annual salary. The following requirements and benefits also apply.
- Service years are calculated based on school months worked. A service year is considered to be 10 months worked.
- Members may purchase additional service credit. Qualifying circumstances include military duty, out-of-state teaching, leave of absence due to pregnancy, substitute teaching, and qualifying social work.
- Normal retirement age is at age 60 with 25 years of creditable service. Members may also retire at any age with 35 years of creditable service.
- The TRS provides monthly survivor benefits to spouses and surviving children. These benefits are calculated, based on years of service, and range from $300 to $600. A lesser lump sum benefit payment option is also available.
- TRS members are eligible for a Cost of Living Adjustment once they have retired. This COLA is based on the Consumer Price Index and varies from year to year. It is paid out annually once a member has declared retirement.
More details on specific benefits provided by the TRS may be obtained through the member handbook. The pension plan is administered by the Teacher’s Retirement Board.