Office of the State Comptroller Retirement Services Division

Hazardous Duty - Retirement Basics

Revised September 2013

• Introduction
• Eligibility Requirements
• Benefit Calculation
• Survivor Benefits
• Insurance: Health, Dental, and Life
• The Retirement Process
• Sources of Information

Introduction

Eligibility Requirements

•  Hazardous Duty Retirement requires a minimum of twenty years of service in hazardous duty position(s).
  • The following appendix lists all of the state job classifications which have been designated as covered under the hazardous duty provisions of the State Employees Retirement System:
    • State of Connecticut Hazardous Duty Position Appendix
       
• Hazardous Duty members are required to make mandatory retirement contributions.
   
• There is no minimum age requirement to retire under a Hazardous Duty Retirement.
   
• Hazardous duty members who leave state service prior to qualifying for a Hazardous Duty Retirement can apply for a full refund of the hazardous duty portion of their retirement contributions and awarded interest posted to their account. Hazardous duty members who leave state service before qualifying for hazardous duty retirement benefits may, if eligible to do so, receive early, normal, or vested rights retirement benefits. The differences between your membership in Tier I, Tier II, or IIA concern your eligibility and calculation for early, normal, or vested rights retirement benefits. If you are not retiring under a hazardous duty retirement and are interested in finding information on Early or Normal retirement, please choose from the links below:
  • Tier I Summary Plan Description (SPD)
  • Tier II Summary Plan Description (SPD)
  • Tier IIA Summary Plan Description (SPD)

Benefit Calculation

• Please refer to the following benefit estimator if you would like to obtain an estimate of your potential hazardous duty benefit under different scenarios: (HazDuty benefit estimator).

Hazardous Duty Benefit Formula and Factors:

• The amount of your monthly benefit is "defined" by a formula which takes into account your years of retirement service credit, your average salary, and your plan membership.
   
• Although Tier I Plan B members will be subject to a modest benefit reduction upon reaching their full Social Security age, the following benefit formula applies to all Hazardous duty members:

PLUS

* Which could include service for state jobs not classified as hazardous duty as well as other credited service.

• It is important to note that some state employees monthly retirement benefit may be limited by Internal Revenue Code (IRC) Section 415. The following memo provides additional information regarding the (IRC) benefit limitation.
• The following table lists the most recently available benefit limitations.
  
  

Retirement Service Credit:

• Generally, Service Credit ** Which Counts TOWARDS the 20-Year requirement:
  • Paid State Employment in Approved Hazardous Duty Positions for which required retirement contributions have been paid.
    • Tier II HD contributions were not required until January 12, 1990.
  • Periods of Qualifying Workers' Compensation, or Disability Compensation Under Section 5-142 (a) of the Connecticut General Statutes (While A Hazardous Duty Member)
  • If Preceded and Succeeded by Hazardous Duty Service:
    • Qualifying Military Leave of Absence Without Pay
    • Qualifying Personal Medical or Family Leave Without Pay
  • Properly documented voluntary leave taken after 6/9/94 counts as free retirement service credit.
     
• Generally, Service Credit ** Which Counts AFTER the 20-Year requirement:
  • Unused vacation accrued while a Hazardous Duty Member
  • State Employment in Non-Hazardous Duty Positions
  • Prior Military Service
  • Prior Full-time Service to Other States where Reciprocity Exists
  • Prior Eligible CT Municipal Service in the CT Municipal Employees Retirement System
     
• Retirement Service Credit EXCLUDES:
  • Any period of time for which you have not paid required retirement contributions including but not limited to:
    • Un-purchased leaves of absence without pay;
    • Periods for which you exclusively received non-creditable workers' compensation payments;
    • Periods for which you participated in a contributory plan but later refunded your retirement contributions.

** Service Credit for which retirement credit has been confirmed by the Retirement Services Division

Part-Time Service:

• If you have had part-time service, you should know that:
  • your part-time service will be treated as full-time service when determining your eligibility to retire.
     
  • your retirement income will be calculated to produce a benefit which reflects the portion of a full-time schedule that you worked throughout your state employment.
     
• Example:
  • Lets assume a member worked part-time at 50% of a full-time schedule for 20 years
    • For determining eligibility, we will use 20 years.
       
    • However, when calculating the benefit percentage, we will use 10 years (the full-time equivalent of working 50% of full-time for 20 years).

Average Salary

• Your average salary is the average of your 3 highest paid years of service.
   
• Any 12 consecutive month period equals one year.
   
• Although for the majority of retirees the average salary is the average of the last 36 months of employment, when calculating your average salary the three years don't have to be consecutive years or calendar years.
   
• A small percentage of retirees may find themselves subject to the 130% Cap provision:
  • When calculating your average salary, no one year's earnings can be greater than 130% of the average of the two preceding years.
     
  • Mandatory overtime earnings are not subject to this limitation.

Cost of Living Adjustment

• Your pension is subject to an annual Cost of Living Adjustment (COLA).
   
• These cumulative raises will be paid each year on either January 1st or July 1st depending on your date of retirement (DOR).
   
• You must be retired at least 9 full months in order to qualify for your first raise.
   
• Thereafter, your annual cost of living adjustment will be paid on the COLA anniversary date, which corresponds with your DOR.
   
• Your COLA will range from a minimum of 2% to a maximum of 7.5% based on the following formula which takes into account a portion of the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the 12 months immediately preceding your COLA anniversary date:

60% of the annual CPI-W increase up to 6%

PLUS

75% of the annual CPI-W above 6%

Survivor Benefits

Overview

• The survivor option dictates what benefits, if any, are payable after your death.
  • This choice will determine whether the state will continue to pay pension checks or continue health insurance coverage for your eligible dependents after your death.
     
• When you retire you must select one of 4 different income payment options (Survivor Options).
  • Option D - Straight Life Annuity
  • Option A - 50% Spouse
  • Option B - 50% or 100% Contingent Annuitant
  • Option C - 10 Year or 20 Year Period Certain
     
• This choice is irrevocable.
  • You will not be able to switch to another option once your pension goes into pay status.
     
• Regardless of the option you choose, you will receive a monthly pension for the rest of your life, and, if you qualify for health insurance as a benefit, the health insurance coverage will extend to your eligible dependents so long as you are alive.
   
• The cost of selecting a survivor option varies according to the option you choose; your age; and, in some cases, the age of the person you are protecting. For an estimate of the cost under any of the different survivor options please refer to the following benefit estimator: (Hazardous Duty estimator)

Option D - Straight Life Annuity

• This option pays you the maximum monthly benefit for your lifetime only.
  • All benefits will end upon your death, including state-sponsored health insurance for any surviving eligible dependents.

Option A - 50% Spouse

• This benefit guarantees a monthly benefit and,if eligible, state-sponsored health insurance (assuming you and your spouse are still married when you die) for you and your spouse.
   
• This option will pay you a reduced benefit for your lifetime in exchange for the protection that, should you pre-decease your spouse, the State will continue to pay 50% of your reduced benefit for your spouse's lifetime.
   
• Your benefit will be reduced by a factor that accounts for both your age and your spouse's age.
   
• If eligibility requirements are met, this option applies to retirees who have been married for at least one year.
   
• Under no circumstances can you change options or replace your spouse with another annuitant.

Option B - 50% or 100% Contingent Annuitant

• This option provides you a reduced monthly benefit for your life and allows you to guarantee lifetime payments after your death to any one person. After your death, a percentage of your reduced benefit, either 50% or 100%, whichever you choose, will continue for your contingent annuitant's life.
  • Your benefit will be reduced by a factor that takes into account the level of protection you are guaranteeing (50% or 100%) along with your age and the age of your contingent annuitant.
     
• Your contingent annuitant can be any one person. This person does not need to be a spouse or a family member, although you are free to name a spouse under this option.
   
• This option will also provide health insurance to any contingent annuitant who qualifies as your eligible dependent at the time of your death as long as they maintain eligibility status.
   
• Under no circumstances can you change options or substitute your contingent annuitant.
  
  

Option C - 10 Year or 20 Year Period Certain

• This option provides you a reduced monthly benefit for your lifetime in exchange for the guarantee that monthly benefits will be paid for at least 10 or 20 years from your retirement date (whichever you choose).
   
• If you should die within 10 years (120 payments) or 20 years (240 payments) from your date of retirement, the remaining payments, in accordance with your selection, will be made to your contingent annuitant(s).
  • This is the only option that allows you to name more than one contingent annuitant, each of whom would receive any remaining monthly payment in equal shares.
     
• Your benefit will be reduced by a factor that takes into account the period of time for which you are providing protection and your age. Under this option, the age of your contingent annuitant(s) does not impact the amount of your monthly benefit.
   
• Your named contingent annuitant(s) will only receive benefits under this option if you die within the protected period.
  • This option provides no guarantee of benefits to anyone other than the retiree beyond the protection period.
     
  • Although your pension (including health insurance for any eligible dependents) will continue for your lifetime, if you die after the State has paid all of the guaranteed payments, all benefits will end upon your death (including health insurance for any eligible dependents).
     
• If your contingent annuitant dies before you, and the protection period has not expired, you may name a new contingent annuitant.
   
• Under no circumstances can you change your option.

Spousal Waiver

• If you have been married for at least 1 year prior to your date of retirement, in order for you to select an option which does not provide your spouse with lifetime protection, your spouse must consent by completing a spousal waiver form.

Benefit Payment Options and Health Insurance

• Regardless of the option you choose, if you qualify for health insurance as a benefit, the health insurance coverage will extend to your eligible dependents so long as you are alive.
   
• Your option choice will determine whether health insurance continues for any eligible dependents after your death. In order to qualify for the continuation of health insurance benefits after your death, your surviving contingent annuitant must:
  • Be your eligible dependent at the time of your death, AND
     
  • Must be entitled to continued monthly payments

Insurance: Health, Dental, and Life

General Eligibility Requirements for Health and Dental Insurance:

• Generally, hazardous duty members who qualify for health and dental insurance as an active employee will qualify for health and dental insurance in retirement.
   
• The eligibility extends to the retiree and any of the retiree's qualifying dependents.

Open Enrollment

• When you retire you will have your own open enrollment period during which you can choose among any of the available plans and add or drop dependents.
   
• Thereafter, each year there will be an annual open enrollment during which you can switch between plans and add or drop dependents.
   
• However, you may make changes to your insurance coverage at any point if there is a qualifying event, such as getting married, having a child, or moving outside the geographic coverage area of your existing plan.

Available Health Insurance Plans - In-State Retirees

• In-state retirees choose among the same health insurance plans they had access to as active employees. In most cases these plans will be offered at a lower cost (possibly at no cost) in retirement.
   
• Anthem and UnitedHealthcare Oxford offer three levels of coverage:
  • Point of Service (POS)
  • Point of Enrollment (POE)
  • Point of Enrolment Gatekeeper (POE-G)
     
• Currently, in-state retirees must pay for any of the POS plans, while the POE plans are offered at no cost for in-state retirees and their dependents.
   
  • Current year POS retiree premium shares are available by following this link.
     
  • Current health insurance plan options with no retiree premium share include:
     

Point of Enrollment - Gatekeeper Plans	Point of Enrollment Plans	Out-of-Area Plans UnitedHealthcare
Anthem State BlueCare POE Plus UnitedHealthcare Oxford HMO	Anthem State BlueCare POE UnitedHealthcare Oxford HMO Select	Oxford USA Out of Area plan Anthem Out-of-Area plan




• For specific information regarding the plans currently offered, please refer to the retiree's health insurance planner: 
  • Health Care Options for Retirees   (PDF)

Available Health Insurance Plans - Out-of-Area Retirees:

• As a general rule, retirees who are not Connecticut residents may choose from the following Out-of-Area plans:
  • Anthem Out of Area
  • UnitedHealthcare Oxford USA Out of Area
     
• Currently, there is no premium charge for those enrolled in an Out-of-Area plan.

Health Enhancement Program (HEP)

• The SEBAC 2011 agreement introduced a new program to enhance your ability to
  make the most informed decisions regarding your health
• Your participation in this program is voluntary. Your election as to whether to
  participate is made on the HEP Enrollment Form.
• Retirees not participating in the HEP are subject to an additional $100 monthly
  insurance premium and an annual deductible of $350 per person for the first four
  family members they insure.
• Your agency Human Resource area or the Healthcare Policy and Benefit Services
  Division can answer specific questions regarding this program.

Medicare's Impact on Retiree Health Insurance:

• As a state retiree, once you become eligible for Medicare (which typically occurs at the age of 65 but may occur earlier under certain circumstances), your Medicare must serve as your primary health insurance coverage. From that point forward, your state-sponsored medical insurance will supplement your Medicare coverage.
   
• In order to maintain full health insurance coverage as a Medicare eligible retiree, you will need to enroll in Medicare Parts A and B.
   
• The State currently reimburses 100% of the normal cost of Medicare Part B for the retiree and eligible dependents.
   
• Currently, you only need to enroll in Medicare Parts A and B. There is no need for you to enroll in Medicare's prescription drug plan (Part D). Your state plan will continue to cover your prescriptions.
   
• As a state retiree, the State requires you to enroll in Medicare Parts A and B regardless of whether you have actually commenced collecting Social Security benefits.

Available Dental Plans

• Unlike retiree health insurance, your residency will not dictate the dental plans available to you in retirement.
   
• All retirees have access to the exact same dental plans offered to active employees.
   
• Currently, the following dental plans are offered to active employees and retirees alike:
  • United Basic
  • United Enhanced
  • CIGNA DHMO
     
• Your dental coverage is subject to a retiree premium share in retirement. The Retiree Healthcare Options Planner illustrates the current cost at the following link:
   

Group Life Insurance

• Assuming you transition directly into retirement, if you participate in the state-sponsored basic group life insurance plan as an active employee you will qualify for a paid-up policy in retirement.
   
• This benefit only applies to the basic group life insurance policies. It does not extend to other supplemental life insurance plans offered through the state.
   
• If you have 25 years or more actual state service:
  • You will receive a paid-up policy reduced to one-half of your basic coverage
     
• If you have less than 25 years actual state service:
  • You will receive a prorated paid-up policy, based on your years of completed service.
     
• You may convert the remaining portion at your own expense without evidence of insurability if you act within 30 days of retiring

The Retirement Process

Notification to Agency
Required Forms
Audit Process
Pension Checks
Agency Payouts
Re-Employment
5-142(a) Disability Compensation
Counseling Services
Other Resources 

Notification to Agency

• Your agency is responsible for completing your retirement paperwork and submitting these forms to the Retirement Services Division for processing.
   
• Generally, we suggest that you notify your agency in writing 60 to 90 days prior to your anticipated date of retirement. You should send copies to:
  • Your human resources office,
  • Your payroll office, and
  • Your supervisor or director.
     
• Your effective retirement date can only be the first of a month.
   
• Your completed retirement application must be received in the Retirement Division no later than the close of business on the last business day prior to your Date of Retirement.

Required Forms

• Forms Your Agency Will Provide:
  • Your agency will provide most of the required retirement forms. These forms include: your retirement application, an income payment election form, a health and dental enrollment form, a spouse waiver form, state and federal tax forms, and a direct deposit form.
  • The following forms are available on-line at: http://osc.ct.gov/agencies/forms/retire/index.html
    • CO-898 - Application For Retirement Benefits
    • CO-899 - Income Payment Election Form - Option A - 50% Spouse
    • CO-900 - Income Payment Election Form - Option B - 50% Or 100% Survivor
    • CO-901 - Income Payment Election Form - Option C - 10 To 20 Years Period Certain
    • CO-902 - Income Payment Election Form - Option D - Straight Life Annuity
    • CO-1047 - Spouse Waiver Of Monthly Survivor Benefits
      
      
• Forms You Will Need to Provide:
  • You will need to provide a copy of your birth certificate.
    • If you choose a survivor option which provides a lifetime benefit to a contingent annuitant, you will need to provide a copy of your contingent annuitant's birth certificate.
       
    • If you are married, you will need to provide a copy of your marriage certificate or license.
       
  • If you or any of your eligible dependents are currently on Medicare, you will need to provide copies of your Medicare membership cards.

Audit Process

• Retirement Division auditors will perform a preliminary audit of your entire retirement record and establish your benefit entitlement. You will receive your first retirement check at the end of the month in which you retire and at the end of each month thereafter.
   
• The audit process to determine your exact retirement benefit takes considerable time; therefore, you will be paid at an estimated level until the audit is completed. When your exact retirement benefit has been computed and verified, your income will be adjusted for the difference between the estimated amount you were paid and your finalized benefit retroactive to your retirement date.
   
• If it takes more than 6 months to finalize your pension entitlement, the Retirement Services Division will pay you 5% interest on any amount owed to you beyond the initial 6-month processing window.

Pension Checks

• Retirement checks are paid monthly at the end of the month.
   
• Your pension is taxable income. All retirees are subject to federal taxes. Whether you pay state tax may depend on the state you live in as a retiree. For more information regarding any obligation to pay Connecticut state taxes please contact the Department of Revenue services. http://www.ct.gov/drs/site/default.asp
   
• Many deductions you pay as an active employee will end in retirement:
  • you will no longer pay Social Security or Medicare taxes;
  • your retirement contributions will end; and
  • union dues are no longer mandatory in retirement.
     
• Most retirees will be required to pay only federal tax, state tax, and monthly dental premiums. You may pay for health insurance if you select a health insurance plan which requires a monthly premium.
  • There are a select few "optional" deductions, which can be taken directly from your retirement check including:
    • Connecticut State Employees Credit Union Deposits
    • Long-Term Care Premiums
    • U.S. Savings Bonds

Agency Payouts

• When you retire you may be entitled to certain payouts. The following payments will be paid by your agency not by the Retirement Services Division:
  • When you retire, your active pay will finally "catch up" to you. In the first month of retirement, most retirees will receive one last full active paycheck and one partial paycheck representing any days worked into the last pay period.
     
  • You will also receive a final pro-rated longevity check representing the number of months you have worked into the next longevity cycle.
     
  • If you have vacation or sick time remaining on the books when you retire, your agency will pay you (at your terminating rate of pay):
    • the value of your entire vacation balance, and
    • 25% of your sick leave balance, up to a maximum of 60 days

Re-Employment

• Once you retire from state service, provided you do not leave under a state disability retirement, the state has no limitations on your outside employment. So long as you do not return to a state payroll, you can work as much as you want and earn as much as you want without impairing your Connecticut state pension.
   
• In certain special circumstances, you may return to active state employment while retaining your full state pension. If you are able to secure a state position in the future, you may return to state service so long as you return to a temporary position and you work no more than the equivalent of 120 working days per calendar year.
   
• You may also return to state service with no restrictions by rescinding your initial retirement. (This assumes that you have independently secured a state position.) If you return to state service in a permanent position, your hazardous duty retirement benefits must cease, and you will return to the retirement tier you were originally a member of and build credit towards a future retirement above and beyond what you had accrued prior to your initial retirement.

5-142(c) Disability Compensation

• On occasion, a retiree may begin to receive disability compensation payments under CGS Section 5-142(a) as a result of an old work related injury. State statutes specifically prohibit the receipt of disability payments under CGS Section 5-142(a) while receiving a state pension. Pension payments must stop while a retiree receives this type of disability payment.
   
• If you should become eligible to receive disability payments under CGS Section 5-142(a) after your state pension has begun, call the Retirement Services Division immediately so that you can avoid any overpayment of benefits.

Sources of Information

• The Office of the State Comptroller provides individualized counseling services for prospective SERS retirees. We suggest that counseling appointments should be made a minimum of 6 to 8 months prior to your anticipated date of retirement. Generally, appointments are reserved for members who are planning to retire within the next 1-year period.
   
• The Counseling Unit can also answer most general retirement questions by phone. If you have additional retirement questions or would like to arrange for counseling, feel free to contact the Counseling Unit at (860) 702-3490.

Other Resources:

• Summary Plan Descriptions
  • Summary Plan Descriptions/Tier Booklets provide more detailed plan information and are available online
    • Tier I: http://osc.ct.gov/empret/tier1summ
    • Tier II: http://osc.ct.gov/empret/tier2summ/index.html
    • Tier IIA: http://osc.ct.gov/empret/tier2asumm/index.html
       
• HD Benefit Calculator
  • (link to HD benefit calculator)
     
• Retiree Health Insurance Planner
  • Health Care Options for Retirees (PDF)
      
• Social Security Administration
  • The Social Security Administration provides Personal Earnings and Benefit Estimate Statements annually and also upon request. You may request a statement by (1-800-772-1213) or online www.ssa.gov
     
• Internal Revenue Service Retirement Information
  • http://www.irs.gov/retirement/index.html?navmenu=menu1
     
• Connecticut Department of Revenue Service
  • For information regarding your obligation to pay state taxes on your state pension please contact the Connecticut Department of Revenue Services by phone (860) 297-5962 or online http://www.ct.gov/drs/site/default.asp
     
• ING Deferred Compensation
  • If you participate in the State's Deferred Compensation Plan, please direct your questions regarding your account to ING directly. ING account representatives are available by phone at (800) 584-6001 or online www.CTdcp.com.

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