Retirement Benefits

Retirement Benefits

Recent Development: Arbitration Decision Regarding ARP/SERS

  1. Arbitration Decision by Roberta Golick
  2. Q and A from SEBAC
  3. Information from the State Comptroller’s Office
  4. The Agreement has been extended to cover non-union employees
  5. Implementation of the agreement is delayed pending Private Letter Ruling by IRS
  6. Impact on Employees without FICA
    1. Windfall Elimination Provision (WEP)
    2. Government Pension Offset (GPO)
  7. SEBAC 2011 ARP to SERS Hybrid Transfer Plan

As an employee of the University, you are eligible to participate in one of three retirement plans, subject to eligibility requirements. The three plans are: State Employees Retirement System, Alternate Retirement Program and the Teacher’s Retirement System.

Form CO-931: Designation of Retirement System-Tier-Plan-Beneficiary
Retirement PLan Comparison Chart

1. New Employees With No Prior State Services

Classified employees – Classified employees automatically become members of SERS.

Full-Time unclassified employees – Full-Time unclassified employees must make an irrevocable election of membership in State Employees Retirement System (SERS) Tier III, the Alternate Retirement Program (ARP), the SERS Hybrid Plan or, if eligible, the Teachers Retirement System (TRS) within 60 days of your employment. If you do not make an election within this 60 day period you will automatically become a member of SERS Tier III.

Your election is irrevocable: no change to an employee’s retirement plan membership is permitted after initial election or following 60 day default. However, if you elect ARP, the SERS Hybrid Plan or TRS membership and are subsequently employed in a position not eligible for ARP, the SERS Hybrid Plan or TRS participation, you must be enrolled in SERS Tier III.

The following is a summary of the retirement systems provided by the State of Connecticut.

State Employees Retirement System (SERS)
SERS is composed of five retirement plans known as Tier III, SERS Hybrid Plan, Tier IIA, Tier II, and Tier 1. All these plans are defined benefits plans. The Hybrid Plan has a cash-out option. Tier III requires you to contribute 2% or 5% of your salary. The Hybrid Plan requires a 5% contribution. TierII is a non-contributory plan. Tier IIA and Tier I are also contributory plans, with contributions of 2% or 5%. Retirement benefits are calculated based on a formula which uses the number of years of services and the average salary of three or five highest paid years.

Tier III Plan
If you were first hired into state service on or after July 1, 2011, you are automatically covered under the Tier III Plan as of your date of employment, unless you are eligible for and elect to participate in another retirement plan or system.

As a Tier III member you contribute 2% of your total annual salary or 5% if you are in a hazardous duty position, In both cases, the contributions are made on a pretax basis.

The average salary used in the calculation of your benefits is based on your five highest paid years of credited service.

For detailed information, please check http://www.osc.ct.gov/empret/tier3spd/index.html

Hybrid Plan
Any unclassified employee first hired into state service on or after July 1, 2011 has the option to elect membership in the Hybrid Plan. ARP members hired before July 1, 2011 has a one-time, irrevocable opportunity to elect to transfer their membership the Hybrid Plan and purchase credit in the Hybrid Plan for their prior service at the full actuarial cost.

The “window” for active ARP participants choosing to transfer from ARP to the SERS Hybrid Plan is open from July 1, 2012 until 90 days following a ruling by the Internal Revenue Service (IRS) on the SEBAC ARP Grievance (SAG) Award. The benefit which such participant will receive from the Hybrid Plan will be the same as that payable under SERS Tier II or Tier IIA depending on your first hire date.

As a Hybrid Plan member you contribute 5% of your salary on a pretax basis.

This plan offers a cash-out option.

For detailed information, please check http://www.osc.ct.gov/empret/hybridspd/hybridplan.htm

Tier IIA Plan
If you were first hired by the University on or after July 1, 1997, but before July 1, 2011, you are a member of the contributory Tier IIA Plan, unless you were eligible to elect membership in another plan.
For detailed information, please check http://www.osc.ct.gov/empret/tier3spd/tier2asumm/index.html

Tier II Plan
If you were first hired by the University (or the state) on or after July 1, 1984, but before July 1, 1997, you are a member of the non-contributory Tier II Plan, unless you were eligible to elect membership in another retirement plan.
For detailed information, please check http://www.osc.state.ct.us/empret/tier2summ/index.html

Tier I Plan
If you were hired on or before July 1, 1984 and elected to participate in the State Employees Retirement System you are a member of Plan A, Plan B or Plan C of the Tier I plan. Membership was elected between October 1, 1973 and December 31, 1973 if you were hired prior to April 1, 1973; mandated thereafter by statute if you were hired prior to July 2, 1984, or elected by you in lieu of membership, if eligible, from TIER II or another state system, through October 1, 1985, the last date on which a transfer membership was allowed.
For detailed information, please check http://www.osc.state.ct.us/empret/tier1summ/index.html

Alternate Retirement Program
Unclassified employees of the University are eligible to participate in the Alternate Retirement Program. Full time eligible employees must make a written election to participate in the plan within 60 days of employment. Those who fail to make a selection within the time period will be defaulted into Tier III. Eligible part time employees also have 60 days from the date of employment to make a selection. Those who do not wish to join a retirement plan must sign an irrevocable waiver.
Currently ING Life Insurance and Annuity Company (ING) is the third-party administrator for the State of Connecticut Alternate Retirement Program. ING is responsible for counseling participants on asset allocations, financial education, and record keeping for the retirement account.

The Alternate Retirement Program (ARP) is a defined contribution plan. Participants in ARP must contribute 5% of their gross salary and the State will match 8% based on the employee’s gross salary.

The ING investment menu offers participants 24 different options to invest in. These 24 investment options fall into four categories.

  • A Stable Value Option: provides a periodically declared rate and a guaranteed minimum rate of 3.00%.
  • Target Date Life Cycle Funds: a portfolio of investment options that track to a certain date for retirement.
  • Passively Managed Index Funds: designed to mirror a specific market index.
  • Actively Managed Funds: receive the attention of a portfolio or team manager who monitors the individual stock positions in their fund on a daily basis.

The State of Connecticut Retirement and Benefits Services Division is responsible for the ongoing review of the Plan to make available developments in plan services, technology, education and investments.
An ING representative visits Eastern Connecticut State University periodically and newly hired employees are encouraged to review their asset allocations with the representative.

Contact Information for ING:
Toll-free telephone: 1-800-584-6001
Via Internet: www.CTdcp.com
Check the link for complete information about ARP.

Teachers Retirements System (TRS)
The Teachers Retirement System is available to AAUP members at the time of hire at ECSU. As part of membership in the TRS, state law requires that contributions of 7.25% of your annual salary be paid into the retirement fund. You contribute 6% of your annual salary to your personal retirement account and 1.25% of your annual salary to the Health Insurance Account used to fund health insurance benefits for retired members and their spouses.
For details, please check the Teacher’s Retirement Board web site.

2. Employees with Prior State Services (Rehires)

Rehired employees with prior state service must rejoin the retirement plan (SERS Tier I, II, IIA or III, TRS, ARP or the SERS Hybrid Plan) in which they previously participated unless:

  • The employee has experienced a permanent break in service.
  • The employee is hired in a position not eligible for participation in their prior retirement plan.
  • The employee is hired in a position which affords them the opportunity to elect participation in a retirement plan not previously available to them.

Employees with prior state service as part-time faculty during which they were eligible to and elected to waive membership in a retirement plan are ineligible for retirement plan membership during any subsequent part-time faculty employment.

Employees with prior state service as part-time faculty during which they were eligible to and elected to waive membership in a retirement plan who are subsequently rehired in full-time positions will be treated as new employees and offered the retirement plan election options appropriate to a new hire in their present position.

Retirement Information for Lecturers
Part time lecturers must make a one-time irrevocable election of membership in SERS Tier III, ARP, the SERS Hybrid Plan or if eligible, TRS. All elections must be made within 60 days of your employment or you will automatically default into SERS Tier III.. You may also elect not to participate in a retirement plan. If you previously waived membership and later become employed in a full-time position you must make an irrevocable election to join SERS Tier III or, if eligible, ARP, the SERS Hybrid Plan or TRS. If you elect ARP membership and are subsequently employed in a position not eligible for ARP participation, you must be enrolled in SERS.

Upon employment, part time lecturers must complete one or more of the forms listed below:

Waiver of Retirement Plan Participation
Adjunct Faculty Retirement Election Form
Form CO-931: Designation of Retirement System-Tier-Plan-Beneficiary
Form CO-1088: Retirement Credit Purchase Request for Prior Miscellaneous Service (Tier IIA members only)

Links for More Retirement Information
Employee Handbook
State Retirement and Benefits Services
Social Security Administration
ING
ING Retirement Workshop Library
TIAA-CREF

Comments Off

Comments are closed.