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CMERS

Connecticut's Municipal Employees Retirement System (CMERS) is the public pension plan offered by the State of Connecticut for municipal employees in participating municipalities. The plan was established in 1947 and is governed by Connecticut Statute Title 7, Chapter 113.

CMERS is a multi-employer pension plan administered by the Connecticut State Retirement Commission. Its core responsibilities include pension administration, and the collection, reconciliation and disbursements of contributions.



Summary of CMERS Provisions

The Pension Fund:

The State Retirement Commission is responsible for the administration of the Connecticut Municipal Employees Retirement System (CMERS). The State Treasurer is responsible for investing CMERS funds for the exclusive benefit of CMERS members.

Membership:

Municipalities may designate which departments (including elective officers, if specified) are covered under the CMERS. This designation may be the result of a resolution or a collective bargaining agreement. A member must customarily work at least 20 hours a week. Police officers and firefighters hired over the age of 60 are not eligible for membership. Municipalities may place additional restrictions on CMERS eligibility, such as limiting CMERS membership to full-time employees. It should be noted that the CMERS does not cover municipal teachers.

Contributions:

By Members:

For members not covered by Social Security: 5% of compensation.

For members covered by Social Security: 2-1/4% of compensation up to the Social Security taxable wage base plus 5% of compensation, if any, in excess of such base.

By Municipalities:

Participating municipalities make annual contributions at rates set by the State Retirement Commission to cover the liabilities of the System not met by member contributions. The municipalities also contribute toward the administrative costs of the system.

Types of Retirement:

Normal Retirement:

Age 55 and 5 years of continuous active service or 15 years of non-continuous active service, or 25 years of service, inclusive of aggregate service, consisting of at least 5 years of continuous active service or 15 years of non-continuous active service, with no age requirement.

Early Retirement:

5 years of continuous active service regardless of age.

Disability Retirement:

Non-Service Connected: 10 years of continuous active service and permanently and totally disabled from engaging in any gainful employment in the service of the Municipality.

Service Connected: Totally and permanently disabled from engaging in any gainful employment in the service of the municipality, provided such disability has arisen out of and in the course of the member's employment with the municipality.

Vested Rights Retirement:

5 years of continuous active or 15 years of non-continuous active service.

Benefit Calculations:

Definitions:

Average Final Compensation = Average of the three highest paid years of service.
Normal Form of Benefit = Straight Life annuity.
Year's Breakpoint = With respect to the calendar year in which a member terminates service, $10,700 increased by 6.0% each year after 1982, rounded to the nearest multiple of $100. For 2007, the breakpoint is $46,000.

Normal Retirement:

For members not covered by Social Security: 2% of average final compensation times years of service. For members covered by Social Security and under age 62 and not in receipt of a Social Security Disability Award (SSDA): 2% of average final compensation times years of service.

For members covered by Social Security and age 62 or in receipt of a SSDA, if earlier: 1-1/2% of the average final compensation not in excess of the year's breakpoint plus 2% of average final compensation in excess of the year's breakpoint, times years of service.

Early Retirement:

Calculated as a normal retirement allowance but the benefit is actuarially reduced based upon the number of years the retirement date precedes age 55.

Disability Retirement:

Non-service connected: Calculated as a normal retirement allowance based on compensation and service to the date of the disability with no early retirement reduction and subject to applicable offsets.

Service connected: Calculated as a normal retirement allowance based on compensation and service to the date of the disability with a minimum benefit of 50% of compensation at the time of the disability and subject to applicable offsets.

Vested Rights Retirement:

Calculated as a normal retirement allowance on the basis of average final compensation and service to the date of termination. The benefit may be deferred to normal retirement age (55) or an actuarially reduced allowance may begin at time of separation.

Benefit Payment Options: Prior to retirement, a member must elect one of four benefit payment "options". The optional forms of payment available are:

Option 1 - Straight Life Annuity.

This option provides the highest monthly benefit for the retiree's lifetime; all payments stop at the retiree's death.

Option 2 - 50% Spouse.

This option first provides a reduced monthly benefit to the retiree for life; after the retiree's death 50% of that benefit will continue to the retiree's surviving spouse for their lifetime.

Option 3 - 50% or 100% Survivor.

This option provides a reduced monthly benefit to the retiree for life; in the event of the retiree's death, either 50% or 100%, whichever the retiree chooses, of the reduced monthly benefit will be paid to contingent annuitant for their lifetime. This contingent annuitant can be any person, including the retiree's spouse.

Option 4 - 10-Year or 20-year Period Certain.

This option provides a reduced monthly benefit to the retiree for life with payments guaranteed from the retirement date for 10 or 20 years (whichever period is chosen by the retiree). If the retiree should die within 10 years (120 payments) or 20 years (240 payments) from their date of retirement, the remaining payments, in accordance with their selection, will be made to the named contingent annuitant(s).

Death Benefits:

A pre-retirement death benefit may be payable to the surviving spouse of a member who dies while actively employed or while on an approved leave of absence if the member is eligible for normal or early retirement on the date of death. The member and the spouse must have been married for at least 12 months preceding the member's death. The benefit amount will equal 50% of the payment the member would have received under the 50% option averaged with the payment the member would have received under the straight life annuity option had the member retired on their date of death.

Return of Deductions:

A lump sum refund of a member's retirement contributions is in lieu of any other benefits. The refund will include retirement contributions plus interest at 5% per year credited from July 1, 1983 or the July 1st following the entry date into the MERS, whichever is later.

Cost of Living Adjustments:

For non-disability retirements:
For those retiring on or after January 1, 2002, benefits are adjusted each July 1. The adjustment is 60% of the annual increase in CPI up to 6%, plus 75% of the annual increase in CPI in excess of 6%. The minimum annual COLA is 2.5%; the maximum is 6%.

For disability retirements:
Benefits are adjusted each July 1 based upon the performance of the CMERS fund. The minimum annual COLA is 3%; the maximum is 5%.

Please note: This summarizes the more important provisions of the MERS. It is not intended to provide complete details on all system conditions. If there is any conflict in wording between the law and this summary, the official wording of the law will govern.

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