STATE OF CONNECTICUT Comprehensive Annual Financial Report - Notes to the Financial Statements - Note 9

The State sponsors three major public employee retirement systems: the State Employees' Retirement System (SERS) - consisting of Tier I (contributory) and Tier II (noncontributory), the Teachers' Retirement System (TRS), and the Judicial Retirement System (JRS).

SERS and JRS are administered by the State Comptroller's Retirement Division under the direction of the Connecticut State Employees Retirement Division. TRS is administered by the Teachers' Retirement Board. None of the above mentioned plans issue stand alone financial reports.

Plan Descriptions, Funding Policy, and Annual Pension Cost and Net Pension Obligation

Membership of each plan consisted of the following at the date of the latest actuarial evaluation:

	SERS	TRS	JRS
	6/30/96	6/30/96	9/30/96
Retirees and beneficiaries receiving benefits	27,835	17,950	189
Terminated plan members entitled to but not yet receiving benefits	662	5,950	-
Active plan members	54,929	41,370	190
Total	83,426	65,270	379

Plan Description
SERS is a single-employer defined-benefit pension plan covering substantially all of the State full-time employees who are not eligible for another State sponsored retirement plan. Plan benefits, cost-of-living adjustments, contributions requirements of plan members and the State, and other plan provisions are described in Sections 5-152 to 5-192 of the General Statutes. The plan provides retirement, disability, and death benefits, and annual cost-of-living adjustments to plan members and their beneficiaries.

Funding Policy
Tier I Plan B and Hazardous Duty members are required to contribute 2% and 4% respectively, of their salary up to the Social Security Taxable Wage Base plus 5% above that level; Tier I Plan C members are required to contribute 5% of their annual salary. The State is required to contribute at an actuarially determined rate, which may be reduced by an act of the state legislature. For fiscal year 1997, the annual required contribution (ARC) was $542,781, however, in accordance with the provisions of collectively negotiated agreements, the State only contributed $349,231 to the plan. Administrative costs of the plan are funded by the State.

Plan Description
TRS is a single-employer defined-benefit pension plan covering any teacher, principal, superintendent or supervisor engaged in service of public schools in the State. Plan benefits, cost-of-living allowances, required contributions of plan members and the State and other plan provisions are described in Sections 10-183b to 10-183nn of the General Statutes. The plan provides retirement, disability, and death benefits, and annual cost-of-living adjustments to plan members and their beneficiaries.

Funding Policy
Plan members are required to contribute 6% of their annual salary. The State is required to contribute at an actuarially determined rate, which may be reduced by an act of the State legislature. For fiscal year 1997, the ARC was $173,982, however, the State contributed $147,885 to the plan, reflecting a reduction of $26.1 million by the legislature to the State's TRS appropriation. Administrative costs of the plan are funded by the State.

Plan Description
JRS is a single-employer defined-benefit pension plan covering any appointed judge or compensation commissioner in the State. Plan benefits, cost-of-living allowances, required contributions of plan members and the State, and other plan provisions are described in Sections 51-49 to 51-51 of the General Statutes. The plan provides retirement disability, and death benefits, and annual cost-of-living adjust-ments to plan members and their beneficiaries.

Annual Pension Cost, Net Pension Obligation, and Related Information
The State's annual pension cost and net pension obligation to SERS, TRS, and JRS for the current year were as follows:

	SERS	TRS	JRS
Annual required contribution	$542,781	$173,982	$9,342
Interest on net pension obligation	106,585	62,831	3
Adjustment to annual required contribution	(48,253)	(30,703)	(2)

Annual pension cost	601,113	206,110	9,343
Contributions made	349,231	147,885	9,342

Increase (decrease) in net pension obligation	251,882	58,225	1
Net pension obligation beginning of year	1,253,940	739,191	32

Net pension obligation end of year	$1,505,822	$797,416	$33

Actuarial information related to the calculation of the annual required contribution for SERS, TRS, and JRS is as follows:

	SERS	TRS	JRS

Actuarial valuation date	6/30/96	6/30/96	9/30/96

Actuarial cost method	Projected	Entry age	Projected
	unit credit		unit credit

Amortization method	Level percent of pay	Level percent of pay	Level percent of pay
Remaining amortization period	36 years	17-36 years	35 years

Asset valuation method	5-year smoothed market	4-year smoothed market	4-year smoothed market
Actuarial assumptions:

Investment rate of return*	8.50%	8.50%	8.50%

Projected salary increases*	3.3%-14.0%	5.0% - 8.1%	5.50%

*Includes inflation at	N/A	5.00%	5.50%

Cost-of-living adjustments	3.0%-4.5%	4.00%	3.0%-5.5%

	Fiscal Year	Annual Pension Cost (APC)	Percentage of APC Contributed	Net Pension Obligation
SERS	1995	$573,325	50.70%	$1,038,241
	1996	550,811	60.8	1,253,940
	1997	601,113	58.1	1,505,822

TRS	1995	$182,486	72.60%	$684,264
	1996	194,880	71.8	739,191
	1997	206,110	71.8	797,416

JRS	1995	$8,971	100%	$31
	1996	9,209	100	32
	1997	9,343	100	33

In accordance with GASB Statement 27, Accounting for Pensions by State and Local Governmental Employers, the net pension obligation (NPO) at transition and the difference between the NPO and the prior pension liability are disclosed below.

	SERS	TRS	JRS
Prior Pension Liability at Transition	$1,851,998	$3,618,088	$14,014
Pension Liability at Transition	1,253,940	739,191	32
Difference	$ 598,058	$2,878,897	$13,982

Defined Contribution Plan
The State also sponsors the Connecticut Alternate Retirement Program (CARP), a defined contribution plan. CARP is administered by the State Comp-troller's Retirement Office under the direction of the Connecticut State Employees Retirement Division. Plan provisions, including contributions require-ments of plan members and the State, are described in Section 5-156 of the General Statutes.

Unclassified employees at any of the units of the Connecticut State System of Higher Education are eligible to participate in the plan. Plan members are required to contribute 5% of their annual salaries. The State is required to contribute 8% of covered salary. During the year, plan members and the State contributed $12,582 and $20,144, respectively.