SAG

The SEBAC ARP GRIEVANCE AWARD ("SAG Award") stems from a labor dispute concerning allegations made by higher education system employees participating in the Alternate Retirement Program (ARP) that the State failed to properly advise them with regard to their retirement plan choices at the time of their participation election. These allegations culminated in the filing of grievances by SEBAC on behalf of higher education participants in ARP.

The grievance progressed to arbitration, and on September 22, 2010, the final negotiated agreement allows for a one-time irrevocable opportunity to transfer from the Alternate Retirement Program (ARP) to the State Employees Retirement System (SERS) Tier II/Tier IIA for employees meeting certain eligibility requirements and affording transferees the opportunity to purchase their past ARP service for retirement credit in SERS at the full actuarial cost of such service.

There was a delay while the Retirement Division requested guidance regarding the IRS implications for this award. The IRS is now aware of these particular problems with respect to SERS and the SAG Award. For additional details please refer to our Workshop and FAQ's.

As the IRS is now aware of these particular problems with respect to SERS and the SAG Award, the IRS has declined to resolve these issues through the Private Letter Ruling (PLR) request, and, instead, has determined that the best and only way to provide a ruling on these issues is through the IRS' Closing Agreement Program ("CAP"). Through the CAP process, the Retirement Commission's tax counsel and the IRS have established a framework to permit these transfers consistent with the original arbitrator's decision.

Members will be provided with a one-time 90-day window to make an irrevocable decision to either remain in the ARP or transfer to the SERS plan. (This has also been extended to the Hybrid plan which is explained to the right);

Members electing to transfer to SERS may purchase their past ARP service for additional credit in the SERS (or Hybrid) plan provided such purchase is cost neutral to the plan (i.e. members pay the full actuarial cost for the additional credit to the plan); and

Members electing to purchase past ARP service must use pre-tax retirement money from specific sources to pay the full actuarial cost of their past ARP service purchases.


HYBRID

The 2011 SEBAC agreement created a new hybrid retirement plan within SERS ("Hybrid Plan") that affords certain ARP members a one-time, irrevocable opportunity to elect to transfer their membership from the ARP to the new Hybrid Plan. This opportunity was created as an alternative to and in lieu of participation in the SAG Award.

The window to choose to transfer from the ARP plan into the Hybrid plan will close at the same time the SAG award transfer window closes.

Members that elect to transfer from ARP to the Hybrid Plan may also purchase their past ARP service for additional credit provided they pay the full actuarial cost.



SAG TRANSFER HYBRID TRANSFER

Eligibility to transfer from ARP to SERS via the SAG Award is restricted to the following employees, who satisfy all of the following conditions:

  • Actively employed on 9/22/2010;
  • Be a constituent unit of the state system of higher education or the central office staff of the Department of Higher Education; and
  • Actively participating in the ARP (i.e. paying ARP contributions) on September 22, 2010.

Eligibility to transfer from ARP to the Hybrid Plan is restricted to the following employees, who satisfy all of the following conditions:

  • Actively employed on a state of Connecticut payroll between 1/1/2009 and 7/1/2012
    • Employees hired on or after 7/1/2011, are eligible for a transfer to the Hybrid Plan, however, Tier III rules will apply for purposes of benefit eligibility and calculations.
  • Currently employed by a constituent unit of the state system of higher education or the central office staff of the Department of Higher Education; and
  • Currently actively participating in the ARP (i.e. paying ARP contributions).

Tier II

Tier IIA

Hybrid Plan

Tier III

SAG Purchase Calculators

SAG Calculator

SAGR Calculator

Hybrid Purchase Calculators

Hybrid Calculator

HybridR Calculator

Shared Resources

Encumbered Funds

Updated rate chart coming soon.




Memo 2013-02

SEBAC 2011 Option to Retain Normal Grandfathered Retirement Date (*only applicable if hired prior to 7/1/11)



Memo 2018-04

Overview of SAG Award Implementation



Tier II/IIA and Hybrid Online Estimator

Tier III Estimator coming soon.



Workshop on the Web

SAG/Hybrid



Informational Handouts

Handouts from in-person informational sessions.



Plan Highlights Chart

View chart



FAQ

Connecticut State Employees Retirement Commission FAQs on IRS Approval of the SAG Award



Forms

Full list of forms coming soon

Other info

Links:
Prudential | Social Security Windfall



SAG Disclaimer

This program is offered to assist you in estimating the cost of transferring your retirement plan participation from ARP to SERS (Tier II or Tier IIA) pursuant to the SAG Award. The SAG Purchase Cost Estimator will provide you with an estimate of the cost to purchase past ARP service credit in SERS (Tier II or Tier IIA). If your current available assets are insufficient to purchase all of your service, the SAG Purchase Cost Estimator will provide you with an estimate of the amount of service that can be purchased with your available assets (see below).

These estimates are based on a purchase date of December 14, 2018. The final cost to purchase past service will be determined when your application is processed using your actual date of transfer, audited service credit and highest annual earnings and could be either higher or lower than this estimate as a result of any difference between these factors and those used in calculating your estimate. This transfer cost estimate is subject to audit and correction by the Retirement Services Division prior to the completion of the purchase.

Important Note: These programs are not connected to your earnings or service records. The accuracy of your estimate will be dependent upon the accuracy of the information you provide. Please read the following information prior to using these programs for the first time. Any questions you have regarding this information should be directed to your agency's Human Resources office. You must contact your agency Human Resources office if you need assistance compiling your years and months of state service and / or your highest annual compensation.

To proceed, you will need to have the following information:

  • Your date of birth
  • Your completed years and months of state service

For the purpose of this program, if you are a part-time employee, your service will be treated on a date to date basis. For example, if you have worked part-time for 10 years you would enter 10 years.

  • Your highest annual compensation
    This is the period of twelve consecutive months' salary which results in your highest amount of compensation at any time during your employment. For the purpose of this program, if you work part-time, the actual salary you received should be used. You must see your agency human resource office if you need assistance with this.
    Limits on compensation may apply to members whose highest annual salary exceeds $275,000. If your highest twelve month compensation exceeds this amount, enter $275,000 for estimate purposes. Further information regarding this limit is available in your agency.
  • Your ARP account balance
    You must first use ARP funds to purchase your past ARP service credit. You may use any funds you have in the TIAA Traditional Fixed Account but you are not required to. However an additional cost will be incurred when using these funds due to the restrictions connected with their withdrawal. If your funds in ARP are insufficient to purchase your current service balance, you may also use monies from your Section 457 deferred compensation plan or your Section 403(b) retirement savings plan once you have depleted your ARP monies with the exception of your TIAA Traditional Fixed Account monies. In no event will you be allowed to purchase more service than you have accrued with the State of Connecticut as an ARP participant as of the date of the actual transfer. You must contact Prudential, and TIAA with regard to all questions concerning the amount of money you have in your ARP accounts.

Important Information Concerning TIAA Traditional Fixed Account Monies. If you chose to use TIAA Traditional Fixed Account monies, also known as encumbered funds, the total amount of monies required for your full purchase of service will be increased based on the discount rate. The cost provided by this estimator will not include that additional expense. Click here for instructions and examples on how to estimate the additional expense you will incur by using these encumbered funds.





Hybrid Disclaimer

This program is offered to assist you in estimating the cost of transferring your retirement plan participation from ARP to the SERS Hybrid Plan.

HYPE will provide you with an estimate of the cost to purchase past ARP service credit in the Hybrid Plan. If your current available assets are insufficient to purchase all of your service, HYPER will provide you with an estimate of the amount of service that can be purchased with your available assets (see below).

These estimates are based on a purchase date of September 30, 2018. The final cost to purchase past service will be determined when your application is processed using your actual date of transfer, audited service credit and highest annual earnings and could be either higher or lower than this estimate as a result of any difference between these factors and those used in calculating your estimate. This transfer cost estimate is subject to audit and correction by the Retirement Services Division prior to the completion of the purchase.

Important Note: These programs are not connected to your earnings or service records. The accuracy of your estimate will be dependent upon the accuracy of the information you provide. Please read the following information prior to using these programs for the first time. Any questions you have regarding this information should be directed to your agency's Human Resources office. You must contact your agency Human Resources office if you need assistance compiling your years and months of state service and / or your highest annual compensation.

To proceed, you will need to have the following information:

  • Your date of birth
  • Your completed years and months of state service

For the purpose of this program, if you are a part-time employee, your service will be treated on a date to date basis. For example, if you have worked part-time for 10 years you would enter 10 years.

  • Your highest annual compensation

This is the period of twelve consecutive months' salary which results in your highest amount of compensation at any time during your employment. For the purpose of this program, if you work part-time, the actual salary you received should be used. You must see your agency human resource office if you need assistance with this.

Limits on compensation may apply to members whose highest annual salary exceeds $275,000. If your highest twelve month compensation exceeds this amount, enter $275,000 for estimate purposes. Further information regarding this limit is available in your agency.

  • Your ARP account balance

You must first use ARP funds to purchase your past ARP service credit. You may use any funds you have in the TIAA Traditional Fixed Account but you are not required to. However an additional cost will be incurred when using these funds due to the restrictions connected with their withdrawal. If your funds in ARP are insufficient to purchase your current service balance, you may also use monies from your Section 457 deferred compensation plan or your Section 403(b) retirement savings plan once you have depleted your ARP monies with the exception of your TIAA Traditional Fixed Account monies. In no event will you be allowed to purchase more service than you have accrued with the State of Connecticut as an ARP participant as of the date of the actual transfer. You must contact Prudential, and TIAA with regard to all questions concerning the amount of money you have in your ARP accounts.

Important Information Concerning TIAA Traditional Fixed Account Monies. If you chose to use TIAA Traditional Fixed Account monies, also known as encumbered funds, the total amount of monies required for your full purchase of service will be increased based on the discount rate. The cost provided by this estimator will not include that additional expense. Click here for instructions and examples on how to estimate the additional expense you will incur by using these encumbered funds.

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