STATE EMPLOYEES
RETIREMENT COMMISSION
COMPTROLLER'S SEAL STATE OF CONNECTICUT 55 ELM STREET
HARTFORD, CONNECTICUT
06106-1775
TELEPHONE: (860) 702-3480
TELEFAX:(860) 702-3489
MEDICAL EXAMINING BOARD
for DISABILITY RETIREMENT
HEALTH CARE COST
CONTAINMENT COMMITTEE
STATE OF CONNECTICUT
RETIREMENT SERVICES DIVISION
OFFICE OF THE STATE COMPTROLLER

RETIREMENT SERVICES DIVISION MEMORANDUM 2009-05

May 26, 2009

TO THE HEADS OF ALL STATE AGENCIES

ATTENTION:   All Human Resources and Payroll Officers
SUBJECT:   2009 RETIREMENT INCENTIVE PROGRAM FOR MEMBERS OF THE ALTERNATE RETIREMENT PROGRAM

I. INTRODUCTION

On May 15, 2009 the general assembly ratified an agreement between the State Employees Bargaining Agent Coalition (SEBAC) and the State which provides for changes in employee health care and a Retirement Incentive Program (RIP) for certain members of the Alternate Retirement Program (ARP) who retire during a limited window of opportunity as well as legislation extending the health care provisions of the SEBAC agreement to employees not included in any prevailing bargaining unit contract and also providing such employees with the RIP.

In that connection, the purpose of this memorandum is to provide agencies with (1) eligibility requirements for ARP members' participation in the RIP, (2) administration and implementation of the RIP provisions for ARP members and (3) general ARP retirement information.

II. ELIGIBILITY REQUIREMENTS FOR ARP MEMBERS

ARP members who meet the following requirements are eligible for the 2009 RIP:

If these eligibility requirements are met, a full-time ARP member will receive the sum of six thousand dollars ($6,000) in three equal annual installments of two thousand dollars ($2,000) each - one in July, 2012; one in July, 2013; and one in July, 2014.

Part-time ARP members who meet the eligibility requirements for participation in the RIP will receive a prorated amount which reflects the portion of time that they worked compared to the full-time assignment for that position also payable in three equal annual installments each - in July, 2012, July, 2013 and July, 2014.

III. ADMINISTRATION AND IMPLEMENTATION OF ARP RIP PROVISIONS

Following notification by the ARP member of his or her intention to retire under the RIP, the agency and the member must complete the following for submission to the Retirement Services Division, Miscellaneous Systems Unit, 55 Elm Street, Hartford, CT 06106:

  1. Form CO-898, entitled "Application for Retirement Benefits"
     
  2. Form CO-744, entitled "Choice of Health Services after Retirement"
     
  3. A copy of the birth certificates of all who are to be covered under the retiree health plan.
     
  4. If applicable, a copy of a marriage certificate.
     
  5. If applicable, a copy of the Medicare card(s) of all who are to be covered under the retiree health plan.

Upon receipt of properly completed retirement application forms (Form CO-898 and Form CO-744) and all required documentation, the Division will verify applicants' eligibility for the RIP and provide applicants with written verification of their eligibility.

ARP incentive payments represent taxable retirement income and will be reported as such to the State of Connecticut Department of Revenue Services and the Internal Revenue Service (IRS). Form 1099-R will be issued to the member in each of the affected years. ARP members should address any questions they have concerning the taxable nature of these payments to the IRS or their tax advisor.

Approximately three months prior to members' receipt of the first incentive payment in July 2012, the Division will contact the member at the address on file to request their completion of a Federal W-4P withholding tax form and a State CT-W4P withholding tax form.

IV. GENERAL ARP RETIREMENT INFORMATION

Agency human resources/payroll officers should also advise ARP members retiring under the RIP of the following:

1. Payment for accrued sick and vacation days (if any) will be made in three installments; one-third of the amount owed an employee shall be paid in July 2012, one-third in July 2013 and one-third in July 2014. The State may, at its option, make the payment in one installment on or before July 1, 2012 if the amount of the payment is less than $2,000. A higher education unit may, at its option and from its own funds, on a case-by-case basis, make the payment in one installment at any time.
 
2. Retirees must notify the Division of any change to their address in order to ensure proper receipt of the annual incentive payments and IRS 1099R forms.
 
3. In the event the retiree becomes deceased prior to the completion of all installment payments, following receipt of the appropriate documentation, the remainder will be paid in a lump sum to such retiree's estate.
 
4. If a member participates in the RIP and subsequently reenters state service for more than one hundred and twenty days in any calendar year between their retirement date and June, 2014, any incentive payments remaining at the time of their reemployment will be forfeited.
 
5. Members must make arrangements directly with ING, the State's third party administrator of ARP to access their ARP funds or, if the member has retained their funds on deposit with the former ARP administrator, TIAA-CREF, TIAA-CREF must be contacted to make such arrangements. Information concerning ARP is available at the following link: http://www6.ingretirementplans.com/SponsorExtranet/CTARP/ For funds on deposit with TIAA-CREF, members can call 1-800-842-2733 for information.

V. COUNSELING SESSIONS

The Division is conducting group counseling sessions for all affected SERS Tier I, Tier II, Tier IIA and Hazardous Duty members from now until June 19, 2009. The Division has invited representatives from Retiree Health and ING to speak to potential retirees after the general presentation. While these sessions are primarily for SERS members, ARP members may wish to attend sessions to talk to the representative from ING concerning options and choices relating to their ING account(s) as well as for information relating to retiree health insurance.

Sign up for these sessions can only be made through the agency - an individual will not be able to sign up on his or her own for RIP related sessions. If an ARP member wishes to attend such a session, he or he must sign up for the session through the agency's Human Resource Department. Spouses and significant others generally cannot be accommodated at these counseling sessions except in isolated cases where the Agency determines that a special need exists for such attendance.

VI. CONCLUSION

Please do not direct employees with inquiries concerning the RIP to this Division; instead, share with employees the information contained in this memorandum. General questions which agencies are unable to answer may be addressed to James Schnell, Coordinator of the ARP, at 860-702-3508.

Very truly yours,

STATE EMPLOYEES RETIREMENT COMMISSION
NANCY WYMAN, SECRETARY EX OFFICIO

BY:

Mark E. Ojakian, Deputy Comptroller and Retirement Services Division Director
Retirement Services Division

MEO/JAK

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