||Office of the State Comptroller
Tier I - Retirement Basics
Updated October 2013
Welcome to the Tier I Retirement Counseling Workshop. Our goal is to provide
the same information in this setting that we provide in our traditional
counseling sessions. This is not meant to cover every retirement provision or
detail. But rather, this is a general explanation of the most important
retirement issues and considerations.
If you fall within our target audience-current Tier I state employees
transitioning directly from state employment into retirement-we hope to provide
you with the information you will need to make informed retirement decisions.
While this workshop is meant to be helpful and informative, nothing contained
in it should be considered a promise or contract. The applicable retirement
statutes, regulations, and decided cases that construe them are the governing
law. The Retirement Services Division reserves the right to revise, change or
revoke without notice the information, rules and procedure detailed in this
- Tier I is a contributory defined benefit retirement plan
- Generally, Tier I applies to state employees first hired prior
to July1, 1984, who elected and have maintained membership.
- There are 3 different plans in Tier I (Plans A, B, and C)
- Plan A members contribute:
- 5% of their state salary and do not participate in
- Plan B members contribute:
- 2% of their state salary on which Social Security taxes
- 5% of their state salary on which Social Security taxes
are not withheld
- Plan B members will have their state pensions
reduced by a small amount (the Plan B Reduction) upon
reaching the full Social Security Age (Age 66 for those
born between 1943 and 1954).
- Plan C members contribute:
- 5% of their total state salary and participate in Social
Security with no adjustments.
- The majority of Tier I members participate in Plan B. Plan A has
been closed to new members since 1973.
- Assuming a direct transition from state service into retirement,
any Tier I member with a minimum of 10 years of Actual State Service
may retire as early as the first of the month following their
- Please refer to the following chart for the specific eligibility
requirements for the various types of retirement.
Age And Service Requirements For Commencement
Of Pension Benefits
Entitled To COLA
Age 55 with 25 Years Service Credit
Age 65 with 10 Years Service Credit
Age 70 with 5 Years Service Credit
Age 55 with 10 Years Actual
Age 60 with 10 Years Service
Age 55 with 10 Years Actual
State Service (with the last five years continuous )
Age 60 with 10 Years Credited
Service (with the last five years continuous)
* Members who left state service after satisfying the
minimum service credit requirement, but before satisfying the minimum
Tier I Benefit Estimator:
- Please refer to the following benefit estimator if you would like to
obtain an estimate of your potential Tier I benefit under different
scenarios: (Tier I benefit estimator)
Tier I 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, your age, and your plan membership.
- The following formula applies to all members of Tier I (although
Plan B members will be subject to a modest reduction upon reaching the
full Social Security age):
||Retirement Service Credit
- Benefit Rate: Your years of service and your age will determine your
- If you have more than 25 years of service, or if you are over the age
of 65, your benefit rate is a full 2% for each year of service.
- If you are under the age of 65, your benefit rate will be
determined by the combination of your age and years of service based on
the following chart:
- Percent of Entitlement: Under the Tier I formula, you are entitled
to a specific percentage of your average salary. This percentage is
determined by multiplying your benefit rate by your years of credited
Retirement Service Credit:
- Retirement Service Credit Includes:
- All periods of service for which you have paid retirement
- Periods of creditable workers' compensation.
- Your service credit will be extended if you receive a payout for
any unused vacation days upon your retirement/separation from state
- Properly documented voluntary leave taken after 6/9/94 counts as
free retirement service credit.
- Any periods of purchased service credit will be included in your
total retirement service credit.
- Retirement Service Credit Excludes:
- Any periods for which you have not paid retirement contributions, this
- Un-purchased leaves of absence without pay;
- Periods for which you exclusively received non-creditable workers'
- Periods of state service for which you did not participate in Tier
- Periods for which you participated in Tier I but later refunded
your retirement contributions.
- 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 and your benefit rate (as
determined by the Tier I rate chart).
- your retirement income will be calculated to produce a benefit
which reflects the portion of a full-time schedule you worked throughout
your state employment.
- Lets assume a retiree worked part-time at 50% of a full-time schedule
for 10 years
- For determining eligibility and your benefit rate from the chart, we
will use 10 years.
- However, when calculating your percent of entitlement, we will use
5 years (the full-time equivalent of working 50% of full-time for 10
- Your average salary is the average of your 3 highest paid years of
- Any 1 period of 12 consecutive months equals 1 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 3 years don't have to be consecutive years or
- 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.
Plan B Reduction
If you are a Plan B member, your benefit may be subject to a slight
- There are only 2 triggers for the Plan B reduction. The Plan B
reduction will commence:
- When you reach your full social security age, or
- If you receive a Social Security Disability Award at any point.
- Regardless of whether you collect your non-disability Social
Security benefit early (prior to reaching your full social security age)
or late (beyond your full social security age), the Plan B reduction
kicks in based on you attaining your full social security age.
- You can determine the amount of your Plan B reduction by taking one
half of your percent of entitlement and then applying the resulting
percentage to a fixed statutory figure of $4,800.00.
||Percent of Entitlement
||$4,800.00 (statutory figure)
- The percent of entitlement for a Tier I member with 30 years of
service is 60% (2% x 30 years of service). Therefore, the corresponding
annual Plan B Reduction for a Tier I member with 30 years of service
would be $1,440.00 per year or $120.00 per month.
- 1/2 x 60% Percent of Entitlement (= 30%) x $4,800.00 = 1,440.00
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
60% of the annual CPI-W increase up to 6%
75% of the annual CPI-W above 6%
- 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 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 the following benefit
Estimator: (Tier I benefit
Option D - Straight Life Annuity
- This option pays you the maximum monthly benefit for your
- All benefits will end upon your death, including
state-sponsored health insurance for any surviving eligible
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
- 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.
- If eligibility requirements are met, this option will also provide lifetime health insurance to any
contingent annuitant who qualifies as your eligible dependent at the
time of your death.
- Under no circumstances can you change options or substitute your
Option C - 10 Year or 20 Year Period
- 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
- This is the only option that allows you to name more than
one contingent annuitant, each of whom would receive any
remaining monthly payments 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 option.
- 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, Tier I 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
- 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
- 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
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
|Point of Enrollment -
|Point of Enrollment Plans
- Anthem State
BlueCare POE Plus
- Anthem State
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:
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 plan
- Currently, there is no premium charge for those enrolled in an
Health Enhancement Program (HEP)
- The SEBAC 2011 agreement introduced a new program to enhance your
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
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), 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
- 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
Group Life Insurance
- 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
- 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
- If you have less than 25 years actual state service:
- You will receive a prorated paid-up policy, based on your years of
- You may convert remaining portion at your own expense without
evidence of insurability if you act within 30 days of retiring.
The Retirement Process
Notification to Agency
- Your agency is responsible for completing your retirement paperwork
and submitting these forms to the Retirement Services Division for
- Generally, we suggest that you notify your agency in writing 60 to
90 days prior to your anticipated date of retirement. You should send
- 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.
- 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:
- 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%
- CO-901 - Income Payment Election Form - Option C - 10 To 20 Years
- CO-902 - Income Payment Election Form - Option D - Straight Life
- 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
- 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.
- 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
- Many deductions you pay as an active employee will end in
- 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
- When you retire you may be entitled to certain payouts. The following
payments will be paid by your agency not by the retirement 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
- 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
- Once you retire from state service, provided you do not go out 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 retirement benefits must cease, and after 6
months of re-employment you will return to Tier I and build credit
towards a future retirement above and beyond what you had accrued prior
to your initial retirement.
5-142(a) 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
- 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
Sources of Information
- The Office of the State Comptroller provides group counseling
services for prospective SERS retirees. We suggest that counseling
appointments should be made a minimum of 6 to 12 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 group counseling, feel free to contact the
Counseling Unit at (860) 702-3490.
- Summary Plan Descriptions
- Summary Plan Descriptions/Tier Booklets provide more
detailed plan information and are available online
- Tier 1 Benefit Calculator
- Retiree Health Insurance Planner
- 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
- Internal Revenue Service Retirement Information
- 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
- 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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