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TELEPHONE: (860) 702-3480
|MEDICAL EXAMINING BOARD
for DISABILITY RETIREMENT
|HEALTH CARE COST
|STATE OF CONNECTICUT
RETIREMENT AND BENEFIT SERVICES DIVISION
OFFICE OF THE STATE COMPTROLLER
RETIREMENT & BENEFIT SERVICES DIVISION MEMORANDUM
|To:||Human Resources and Payroll Officers, Connecticut Community Colleges|
|Re:||Retirement Plan Eligibility for Teachers and Professional Staff|
|Date:||March 5, 2008|
This memorandum provides interim guidance pending the resolution of ongoing efforts to coordinate collective bargaining provisions on retirement plan enrollment for part-time faculty members at all state colleges and universities.
The State Employees Retirement Act requires that all state employees participate in a retirement plan. Teachers or professional staff members who are first employed after July 1, 1997, are currently covered under the State Employees Retirement System ("SERS") Tier IIA retirement plan unless they elect to participate in either the Teachers Retirement System (TRS) or the Alternate Retirement Program (ARP) within six months after commencing employment.
Under Section 414(h)(2) of the Internal Revenue Code in order for contributions deducted from compensation to be "picked up" by the employer (and excluded from the employee's taxable income) participation in the retirement plan must be a mandatory condition of employment. The IRS rules allow an employee to waive participation in a mandatory retirement program. However, that choice can only be made on a one-time, irrevocable basis. An employee who fails to opt out within a designated period must automatically be enrolled in a mandatory retirement plan. Part-time lecturers employed by Connecticut Community Colleges do not presently have the option to waive participation in a retirement plan.
For IRS compliance purposes, the State (rather than individual colleges or universities) is considered the employer. This means that individual institutions cannot treat each semester of part-time employment as a separate opportunity for retirement plan election or waiver. To insure that our retirement plans comply with IRS guidelines and regulations, the following procedures must be followed for retirement plan elections by full-time and part-time lecturers and professional staff members employed by Connecticut Community Colleges.
NEW EMPLOYEES - NO PRIOR SERVICE
Employees with no prior state service can elect SERS, ARP or TRS, if eligible, by completing the applicable sections of Form CO-931, "Designation of Retirement System-Tier-Plan-Beneficiary" and returning it to the Retirement & Benefit Services Division (Division).
If no election is made within six months of commencing employment the employee will be enrolled into SERS pursuant to the following procedures:
No change is permitted after initial selection; once an employee has made a retirement plan election that decision cannot be changed. However, if an employee who initially elected ARP membership is subsequently employed in a position that is not eligible for ARP participation, the employee must be enrolled in SERS.
EMPLOYEES WITH PRIOR STATE SERVICE (REHIRES)
Any questions regarding these procedures or the retirement system assignment for reemployed or dually employed individuals should be addressed to Jeanne Kopek, Assistant Division Director at 860-702-3487, or Elizabeth Hendrickson, Supervisor of the Division's Data Base Unit, at 860-702-3515. Specific questions regarding ARP membership should be referred to Jim Schnell, the Division's ARP Coordinator, at 860-702-3508.
Very truly yours,
STATE EMPLOYEES RETIREMENT COMMISSION
NANCY WYMAN, SECRETARY EX OFFICIO
Thomas C. Woodruff, Ph.D., Director
Retirement & Benefit Services Division
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