|55 ELM STREET
TELEPHONE: (860) 702-3480
|MEDICAL EXAMINING BOARD
for DISABILITY RETIREMENT
|HEALTH CARE COST
|STATE OF CONNECTICUT
RETIREMENT AND BENEFIT SERVICES DIVISION
OFFICE OF THE STATE COMPTROLLER
RETIREMENT & BENEFIT SERVICES DIVISION MEMORANDUM
|To:||Human Resources and Payroll Officers, Connecticut State Universities|
|Re:||Retirement Plan Eligibility for Teachers and Professional Staff Members|
|Date:||March 5, 2008|
This memorandum provides interim guidance pending the resolution of ongoing efforts to coordinate collective bargaining provisions on retirement plan enrollment for part-time faculty members at all state colleges and universities.
The State Employees Retirement Act requires that all state employees participate in a retirement plan. Teachers or professional staff members who are first employed after July 1, 1997, are currently covered under the State Employees Retirement System ("SERS") Tier IIA retirement plan unless they elect to participate in either the Teachers Retirement System (TRS) or the Alternate Retirement Program (ARP) within six months after commencing employment.
The collective bargaining agreement between the Connecticut State Universities and the American Association of University Professors, Inc. provides: "Part-time members shall have the right to join or refuse to join the State Employees Retirement System (SERS) or Teachers Retirement System (TRS) (for current employees in the Teachers Retirement System) or the Alternate Retirement Plan (ARP) for Higher Education. Failure to elect participation in the above retirement systems shall be deemed full waiver of rights to participate for the semester of employment."
This provision is inconsistent with current Internal Revenue Service (IRS) regulations applicable to qualified plans like SERS and the ARP. Under Section 414(h)(2) of the Internal Revenue Code in order for amounts deducted from an employee's compensation to be "picked up" by the employer (and excluded from the employee's taxable income) participation in the retirement plan must be a mandatory condition of employment. While IRS rules allow an employee to waive participation in a mandatory retirement program, that choice can only be offered on a one-time, irrevocable basis. Under IRS rules an employee who fails to "opt out" within a designated period, must automatically be enrolled in a mandatory retirement plan.
For IRS compliance purposes, the State (rather than individual colleges or
universities) is considered the employer. This means that individual
institutions cannot treat each semester of part-time employment as a separate
opportunity for retirement plan election or waiver. This memorandum outlines the
procedures to be followed for retirement plan elections by the State University
teachers, professional staff and part-time faculty members.
NEW EMPLOYEES - NO PRIOR STATE SERVICE
(a) Full-timeTeachers or Professional Staff Members can elect
to participate in either SERS, ARP or, if eligible, TRS within six months of
commencing employment. The election is made by completing Form CO-931
"Designation of Retirement System-Tier-Plan-Beneficiary".
If Form CO-931 is not completed within that six-month period and subsequently forwarded to the Division's Data Base Unit, the employee will automatically be enrolled in SERS pursuant to the following procedures:
(b) Part-time Faculty have a 90-day period after the commencement of employment to enroll in a retirement plan by completing Form CO-931 or to decline retirement plan participation by signing a Waiver of Retirement Plan Participation (attached). Your agency is responsible for forwarding to the Division's Data Base Unit a signed copy of each part-time faculty member's employment contract, containing an acknowledgment of the one-time, irrevocable nature of the retirement plan decision (sample language attached), and either a completed Form CO-931 or signed waiver.
Employees who fail to act within 90 days will be automatically enrolled in
the SERS pursuant to the following procedures:
(c) No change permitted after initial selection - Except as set
forth below, once an employee has made a retirement plan election (or has waived
participation) that decision cannot be changed.
EMPLOYEES WITH PRIOR STATE SERVICE (REHIRES)
(a) Employees with prior state service must rejoin the retirement plan (SERS, TRS or ARP) to which they were previously assigned. Employees rejoining SERS must be placed in the appropriate tier and plan as required by current SERS plan provisions.
(b) Employees with prior SERS membership rehired after a permanent break in service should be treated as new employees and offered the retirement plan election options appropriate to their present position. A "permanent break in service" occurs when an employee who was not vested separates from state service and the elapsed time between such separation and date of reemployment exceeds the greater of five years or the duration of prior service.
(c) Part-time Lecturers who previously waived retirement plan membership pursuant to any collective bargaining agreement covering part-time faculty members within the CT higher education system are ineligible for retirement plan membership during subsequent employment as a part-time Lecturer at the State Universities.
(d) Employees whose only prior service consists of public school teaching should be treated as new hires for State retirement plan selection purposes.
Individuals who already work for another state agency and currently participate in SERS, ARP or TRS are not entitled to change retirement plan participation as a result of accepting supplemental employment with the State Universities. Such employees must remain in the retirement plan to which they are assigned at the time of commencing any dual employment.
Part-time lecturers who also work for the University of Connecticut and have
waived retirement plan membership are ineligible for retirement plan membership
during any part-time employment with one of the four State Universities.
If you have questions about completion of the CO-931 form, contact the Division's Data Base Unit (860-702-3515; email email@example.com) or refer to "Instructions for Completion of Form CO-931, Designation of Retirement System-Tier-Plan-Beneficiary", which were issued with the Retirement & Benefit Services Division memorandum dated August 13, 1998, (http://www.osc.state.ct.us/memoarchives2/98retire/2TIER2A.HTM.)
Any questions regarding these procedures or the appropriate retirement system enrollment for reemployed or dually employed individuals should be addressed to Jeanne Kopek, Assistant Division Director at 860-702-3487, or Elizabeth Hendrickson, Supervisor of the Division's Data Base Unit, at 860-702-3515. Specific questions regarding ARP membership should be referred to Jim Schnell, the Division's ARP Coordinator, at 860-702-3508.
Very truly yours,
STATE EMPLOYEES RETIREMENT COMMISSION
NANCY WYMAN, SECRETARY EX OFFICIO
Thomas C. Woodruff, Ph.D., Director
Retirement & Benefit Services Division
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