MEDICAL EXAMINING BOARD
For DISABILITY RETIREMENT
|55 ELM STREET
Telephone (860) 702-3480
Facsimile (860) 702-3489
|STATE OF CONNECTICUT|
RETIREMENT SERVICES DIVISION
OFFICE OF THE STATE COMPTROLLER
|Attention:||Human Resource Officers and Payroll Officers|
|Subject:||General Provisions to Purchase Retirement Credit in Tier III of the State Employees Retirement System|
Most State employees first hired on and after July 1, 2011 join Tier III, one of the State Employees Retirement System's (SERS) newest defined benefit plan. Employee contributions are required in Tier III at a rate of 5% of salary for hazardous duty members and 2% of salary for all other Tier III members. Generally, retirement credit accrues for Connecticut state service while the Tier III member is actively employed and making the required retirement contributions to SERS.
Tier III members may also obtain additional retirement credit or reinstate retirement credit. The additional retirement credit provisions resemble those contained in Tier IIA, the contributory plan that covers the majority of employees hired from July 1, 1997 to June 30, 2011. However, in order for Tier III members to obtain additional retirement credit, they must purchase the retirement credit by paying in most cases required contributions and statutory interest.
The intent of this memorandum is to provide:
There are three types of prior service that may be purchased for retirement credit assuming all requirements are met. Each request for a calculation is non-binding.
1.) Prior active duty military service: A Tier III member is eligible
to purchase vesting and credited service for active duty military service during
war-time or national emergency in the Armed Forces (United States Army, Navy,
Marine Corps, Coast Guard or Air Force) for which they received an Honorable
Discharge, provided the member has not or will not receive any retirement
allowance/pension from another source other then the federal government for the
same service. However, the member must apply to purchase prior military service
within one year of commencement in Connecticut state service as a Tier III
member or December 31, 2012, whichever is later. The purchase must then be
completed by remitting the sum due within the time frame provided on the payment
The cost to the Tier III member to purchase each year of qualifying military service will equal four percent (4%) of the annual full-time rate of compensation when first hired into Connecticut state service. (The Tier III member may elect payroll deductions at five percent (5%) interest per annum).
A Tier III member is limited to receiving retirement credit for military service equal to war-time service plus three years national emergency service. In any event, a Tier III member may not obtain more than ten years credit in the aggregate for all military service.
2.) Prior full-time employment with another state: A Tier III member is eligible to purchase vesting and credited service for active full-time employment with another state, provided the member has not received and will not receive a pension from another source for the same service, and the other state makes similar retirement credit provisions for former Connecticut state employees. A questionnaire will be sent to the out-of-state retirement system to which the member belonged to determine retirement plan similarity.
The cost to the Tier III member to purchase each year of qualifying service with another state shall be six percent (6%) of the annual full-time rate of compensation when first hired into Connecticut state service plus a five percent (5%) interest charge per year from the date such service was rendered to date of purchase.
A Tier III member is limited to receiving ten years credit in the aggregate for all service to other states, and not more than one year of this type of service shall be counted for each two years of credited Connecticut state service.
3.) Prior Connecticut Municipal Employment: A Tier III member is eligible to purchase credited service for a prior period of municipal service during which he/she was a member of the Connecticut Municipal Employees Retirement System (CMERS), provided the member has not received and will not receive a pension from another source for the same service.
The cost to the Tier III member to purchase each year of qualifying municipal service will equal the employee's contributions to CMERS plus five percent (5%) interest charge per year from the date such service was rendered to date of purchase.
Purchased municipal service cannot be added to the Tier III member's credited service until said member has at least ten years of vesting credit, exclusive of such municipal service.
Tier III members may elect payroll deductions not in excess of 24 months.
Such installment payments include interest of five percent (5%) per annum.
III. Restoration of prior Tier III vesting and credited service
A former member of Tier III who is reemployed before a permanent break has occurred may restore retirement credit for their prior Tier III vesting and credited service for which retirement contributions and interest were refunded. A permanent break in service occurs if there is a break in service; the individual is not vested; and the period from severance from service date to reemployment commencement date equals or exceeds the Tier III vesting service prior to that severance, or five years, whichever is greater.
Usually, the cost to the Tier III member to restore retirement credit shall equal the full amount of the refund plus interest at the rate of five percent (5%) per annum calculated from the date of refund to date of restoration. In the event that a Tier III member contributing at the non-hazardous duty rate of two percent (2%) is restoring retirement credit for prior hazardous duty service five percent (5%), the cost of the restoration is adjusted.
Tier III members may elect payroll deductions. Such installment payments include interest of five percent (5%) per annum.
IV. Leaves of absence without pay (LAW)
As a general rule, leaves of absences without pay will diminish the Tier III member's vesting and credited service unless it is the type of leave that can be purchased for retirement credit provided the employee completes such purchase. There are two exceptions to this rule: retirement credit is awarded "free" to the employee for leaves during which the individual is receiving qualifying temporary Workers' Compensation, Disability Compensation or leaves taken in accordance with Connecticut General Statutes, Section 5-248c entitled "Voluntary schedule reduction program".
The following types of leaves without pay can be purchased for vesting and credited service:
1. For personal illness, maternity or qualifying family or parental leave: A Tier III member may purchase vesting and credited service for leaves granted for the protection or improvement of the member's health, leaves granted pursuant to C.G.S., Section 5-248a, entitled: "Family and medical leave from employment"; or leaves granted for family illness or eligible parental leave as provided in an applicable collective bargaining agreement.
The length of such leaves is an important factor in determining a Tier III member's right to obtain retirement credit as well as the cost to the individual.
Qualifying leaves of thirty (30) calendar days or more are purchasable in one
month increments. As an example, if a member is on a leave without pay for a
period of sixty three (63) consecutive ca1endar days, sixty (60) days of such
leave are purchasable. In the case of such leaves without pay of a month or
more, the contributions required from the member will be two percent (2%) or
five percent (5%), whichever is applicable, of the member's monthly salary at
the time such leave was taken with five percent (5%) interest per year from the
period of the leave to the date of the purchase.
Members may also purchase qualifying leaves of absences without pay, each of which is less than thirty (30) consecutive calendar days in duration, if the cumulative total of individual working days equals one month. In such case, one month is considered to be a total of twenty-two (22) working days. If the purchase is composed of several leaves totaling one month, the cost to the member will be two percent (2%) or five percent (5%), whichever is applicable, of the daily rate of salary at the date of application to receive credit, multiplied by twenty-two (22) without an accompanying interest charge.
Not more than fifteen (15) months of vesting and credited service in any five (5) year period may be obtained in combination for personal illness, family leave and parental leave.
2. For military leave of absence without pay: A Tier III member may purchase vesting and credited service for a leave without pay during which said member served in the Armed Forces as described above in Section II-1 of this memorandum provided there is a return to state service within ninety (90) days of honorable release from active duty.
The cost to the Tier III member to obtain the retirement credit will equal two percent (2%) or five percent (5%), whichever is the applicable contribution level. For retirement purposes, not more than the war-time service plus three (3) years shall be counted as vesting and credited service for military leave without pay.
V. Introduction of Tier III Purchase Request Forms and Instructions
There are three (3) Tier III Purchase Request Forms, each designed to address retirement credit issues that may arise at different stages in the Tier III member's career. As described in Section I of this Memorandum these forms are available on the OSC website at www.osc.ct.gov/agencies/forms/retire/index.html.
1. Form CO-991 entitled "Retirement Credit Purchase Request for Prior Miscellaneous Service for prior military service, prior employment with another state, and prior Connecticut Municipal Employee's Retirement System Service (CMERS) - Tier III Members Only". Every Tier III member of SERS hired on or after February 1, 2012 must complete a Form CO-991 and the form should be processed in accordance with the instructions indicated. The Tier III member must apply to purchase miscellaneous service which was rendered prior to the commencement of Connecticut state service, complete the "Member Request" section or sign the "Member Statement and Acknowledgement".
2. Form CO-992 entitled "Retirement Credit Restoration Request - Reemployed Tier III Members Only". The reemployed Tier III member must make application on Form CO-992 to restore retirement credit for prior service for which the member received a refund of Tier III retirement contributions.
3. Form CO-993 entitled "Retirement Credit Purchase Request for Qualifying Leaves without Pay - Tier III Members Only". The Tier III member must make application on Form CO-993 to obtain retirement credit for all eligible leaves of absence without pay (LAW) such as: 1) For personal illness, maternity or qualifying family or parental leave or 2) for military leave of absence without pay.
It is imperative that all retirement credit purchase request forms be
submitted to the Retirement Services Division with the required documentation
listed on said form(s) otherwise, the application will not be processed and it
will be returned to the Tier III member.
When the purchase application is completed for submission to the Retirement Services Division, the agency should retain a copy of the form in the individual's personnel file. Assuming that the eligibility to obtain credit is established, a payment notice will be sent to the member reflecting the cost to obtain the retirement credit. Any available payment options will be presented along with instructions to the member on how to complete the purchase.
Purchase opportunities are available only to active and vested members of Tier III; it is not available to retirees or any other payees.
In the processing of requests from active Tier III members, agency personnel
may call the Retirement Credit Purchasing Unit at (860) 702-3511 or through the
central Retirement Services Division email address
questions that may arise.
Very truly yours,
STATE EMPLOYEES RETIREMENT COMMISSION KEVIN LEMBO, SECRETARY EX OFFICIO
Brenda K. Halpin, Director
Retirement Services Division
CO-991 - Retirement Credit Purchase Request for Prior Miscellaneous Service
CO-992 - Retirement Credit Restoration Request
CO-993 - Retirement Credit Purchase Request for Qualifying Leaves Without Pay
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