GENERAL INFORMATION ABOUT THE CMERS SYSTEM AND BENEFITS
The following is a list of subject areas which you can use to find answers to some commonly asked questions. You can navigate to each group of questions by clicking on the desired subject area.
Who is a Member of CMERS?
In general, you are a member of this plan if you are a regular employee of a municipal department that participates in the CMERS. Please click here for a listing of CMERS participating municipalities. In addition, some municipalities cover certain elected positions, employees of free public libraries that receive municipal funding, and housing authority employees. Membership in the system is mandatory for nearly all employees of a participating municipality who are regularly employed on a full-time permanent basis. You remain a member-in-service until you separate from the municipality by reason of retirement, failure of re-election or re-appointment, resignation or removal or discharge from your position or office that you hold. Please click here for a copy of the CMERS Summary Plan Description
You must customarily work at least 20 hours a week to qualify for membership. If you are a Police Officer or Firefighter hired over the age of 60, you are not eligible to be a member in the plan. Your municipality may place additional restrictions on CMERS eligibility, such as limiting CMERS membership to full-time employees.
This plan does not cover municipal teachers. Instead, teachers are covered by a separate State pension plan. This plan does not cover employees holding positions funded completely or partially by the federal government as part of an employment program or a job training program.
Please note: The term "spouse" is also intended to mean "civil union partner" whenever it appears herein but does not include a qualified domestic partner.
Who Administers The Pension Fund
The State Retirement Commission is responsible for the administration of the CMERS. This Commission oversees the CMERS and other State retirement systems. The State Treasurer is responsible for investing CMERS funds for the exclusive benefit of CMERS members. The Treasurer has detailed information on her website with regard to the Fund and investment information. The link is: http://www.state.ct.us/ott/aboutpension.htm.
When Membership Begins
If you meet the membership requirements, you automatically become a member and contributions to the plan will be deducted from your pay. In most instances, you become a plan member on your date of hire, the day you commence your employment. If your municipality has a probationary period approved by the State Retirement Commission, your date of plan membership is the day after you complete the probationary period and begin contributing to the plan.
Type of Plan and Contributions
The Defined Benefit Plan of the Connecticut Municipal Employees' Retirement System is an actuarial reserved, joint-contributory program. In this plans, the members and their employers (the participating municipalities) make contributions to the fund, qualified as a tax-exempt organization under Sections 401(a) if the Internal Revenue Code (IRC). These funds are invested and interest earnings on the investments are placed in reserve to pay benefits to the retired members and beneficiaries of deceased members. The law requires the retirement fund to remain in actuarial balance. This guarantees to the members the availability of funds to pay their benefits when they retire.
With a defined benefit plan a participant's actual retirement benefit is specifically determined by a formula, which contains three variables; the participant's service credit, the participant's age at retirement, and the average final compensation. The final benefit is not dependent on the amount of contributions made to the plan.
Enrollment is mandatory and you must be enrolled in the CMERS as soon as you meet the eligibility requirements previously described, regardless of any probationary period your employer may have. You will be sent notification of your enrollment and a designation of beneficiary form, and asked to submit the beneficiary form to the CMERS as soon as possible.
Those receiving an allowance for retirement or disability from any public employee retirement system in Connecticut or those whose salaries are funded with federal grant moneys where membership in a federal civil service retirement system is mandatory are ineligible. In addition, part-time, provisional temporary, temporary provisional, seasonal, or intermittent employees and contract employees are usually not eligible for membership.
A beneficiary(ies) is the person(s) to whom you want your accumulated contributions plus interest to be refunded and/or any available death benefits to be paid to if you die before retirement. You may choose any person or your estate, as your beneficiary and you may change your designation at anytime by filing the appropriate form with the CMERS. While not required, CMERS prefers that all designations of beneficiary forms be notarized. If you do not complete a beneficiary designation form, any return of contributions or benefits payable in the event of your death will be payable according to CMERS designation.
Your contributions to the plan will be deducted from your pay each pay period. The amount you contribute depends on whether or not your employment is covered by Social Security.
If your employment is not covered by Social Security you contribute 5% of your pay.
If your employment is covered by Social Security: (a) You contribute 2¼% of the portion of your pay on which Social Security taxes are withheld; and (b) You contribute 5% of the portion of your pay on which Social Security taxes are not withheld.
If your municipality has elected to do so, your contributions will be made on a pretax basis.
Your pay for CMERS contribution and benefit purposes is your salary, wages and earnings including overtime payments. Also, you must make CMERS contributions on Workers' Compensation payments (other than specific indemnity awards). Additionally, CMERS contributions are required on the imputed value of certain non-cash payments, such as board, lodging, fuel or laundry provided to you by your municipality. The imputed value of those non-cash payments is reported to the Internal Revenue Service as part of your taxable income. Lump sum payments that are not part of your regular earnings, such as accumulated sick and vacation payments, are not subject to CMERS contributions.
Contributions By The Municipality
Your contributions pay only a small part of the cost of your retirement benefits. Your municipality makes contributions at rates set by the State Retirement Commission to fund the remaining cost. The municipality also contributes toward the administrative costs of the plan.
Vesting in the System
Being vested means that you are eligible to receive a retirement allowance although you may not be entitled to take a retirement until you reach a certain age. You will be vested in the CMERS upon the attainment of five (5) years of active service which are periods when you are actively working and contributing to the CMERS. Additionally, if your municipality did not participate in the CMERS when you were hired, but subsequently joined the CMERS, you may receive credit for your service from your date of hire, less any applicable probationary periods, to your date of CMERS membership provided the appropriate payments were made by the municipality. To take a normal retirement, you have to have attained age 55 with at least 5 years of continuous active service or 15 years of non-continuous active service with a CMERS participating municipality.
If you leave a CMERS municipality, you may always request a refund of your retirement plan contributions plus accumulated interest even after your account has been placed in a vested, deferred status. A refund will cancel your retirement service credit and you will forfeit all rights to any retirement (early, normal, disability) or retirement related benefit.
Purchasing Service Credit
There are two types of service in CMERS: active service and aggregate service. "Aggregate" service is any service that you may have purchased for periods when you were not actively working for a participating municipality. You may purchase retirement credit for a number of situations including service in the military, as an employee in another municipality and with the State of Connecticut (other than temporary or contractual employment) for which you received no retirement credit. While you may purchase these credits you will be expected to pay the full cost of the added retirement benefit received which usually includes interest.
In order to purchase additional retirement credit you must submit a written request with all required documentation to the CMERS Unit. You will either be sent an invoice to complete the purchase or a letter explaining why you do not qualify. Requesting a purchase does not obligate you to pay the invoice. However, no credit is allowed for purchase unless and until all the required contributions and interest have been paid.
It is important to note that no credit shall be granted for any period of service for which any municipal or state governmental unit is or will be paying a retirement benefit or if such credit would result in multiple service credit for the same period of service - there can be no "double counting" of service credit.
Also, although for a few of the purchase opportunities you may purchase them prior to retirement, it may be beneficial to purchase the credit as soon as possible as the further off the purchase the more the interest that might apply. For example, a purchase that may cost you $1,000 if you purchased immediately could cost you $5,000 if you wait until you retire to purchase.
Please check the CMERS Summary Plan Description which summarizes important information about the available purchase opportunities:
Military Leave Credit
If a member is required to take a leave of absence from their present employer to serve in the military, they are entitled to credit in the retirement system for that period of leave. The municipalities are notified that they must report such leaves to the system, but it is the responsibility of the employee to be sure that the proper credit is made.
For example, if a member takes six weeks of leave without pay for military duty, the service credit that the member receives for that fiscal year may be reduced because of the off-payroll status unless the Retirement Office has received proper notification. If there appears to be a discrepancy or question about the service credit, you should contact your municipality immediately.
Tax on Refunds
If a member terminates employment and wishes to take a refund of their contributions plus accumulated interest in lieu of a pension, they are subject to a mandatory 20% federal tax withholding plus a possible 10% excise tax (if the member is under age 59 1/2) on the "taxable portion" of said refund. The taxable portion of a refund is the interest paid by the system on the member's account, plus all employee contributions made on a pre-tax basis. The only way to avoid the 20% mandatory withholding on a withdrawal is to direct the Retirement System to roll over the taxable monies to another qualified tax-sheltered plan. Taxable amounts of less than $200.00 are not subject to the mandatory withholding. This withholding does not apply to pension benefits. This federal regulation became effective January 1, 1993 for all lump sum distributions payable to a member at time of withdrawal or termination.
Vested Deferred Membership
Even if your active membership in the CMERS ends before you are eligible to retire, you may be entitled to a pension from the CMERS in the future. Once you have five or more years of actual credit, you are vested and cannot lose your credit unless you elect to withdraw your contribution balance. In short, if you terminate service before age 55, and accrued five (5) or more years of actual service before termination you may be eligible for a vested deferred retirement benefit.
Transfer of Membership - Portability
One of the advantages of having a uniform retirement system for most municipal employees is that retirement credit is portable from one municipality to another and from one system to another.
If a member leaves employment with one town and begins employment with another participating municipality, there is no break in their membership with the retirement system as long as they have not withdrawn their membership from the CMERS during the interim. Members who leave their employment as an employee and join either the Connecticut State Teachers' Retirement System or the Connecticut State Employees' Retirement System should contact CMERS to determine if they are eligible to transfer their retirement credit to the new System. Transfer of retirement credits are generally not allowed if a member has received a refund of contributions or any retirement benefit payments.
How Eligibility for Retirement Benefits Is Determined
Your eligibility for a retirement benefit is determined by the length of time you actively work for a CMERS participating municipality and whether that service was continuous. Continuous active service is when you are working for a participating municipality and contributing to the CMERS and you have no periods of unpaid absence in excess of 90 days in one calendar year. A period of unpaid absence of more than 90 days will break the continuity of your service unless the unpaid absence was due to a medical disability, a layoff or an approved leave of absence. Unpaid absences due to a medical disability, a layoff or an approved leave of absence are not considered active service and you will not receive credit for them either in determining your eligibility for a benefit or the amount of the benefit but such absences will not break the continuity of your service. Only your active service before and after these unpaid absences will be used to determine your eligibility for a benefit and to calculate that benefit.
An example of continuous active service is when you work continuously for a CMERS participating municipality for four years and then take a one year unpaid medical leave and return to work for a CMERS participating municipality for a year following the unpaid medical leave; you will have 5 years of CMERS continuous active service. In this case, the unpaid medical leave period is not counted as active service and it does not break your continuity of service.
An example of non-continuous active service is when you work continuously for a CMERS participating municipality for four years and then you leave to take a job that is not covered by the CMERS and then return to work for a CMERS participating municipality for a year following the absence, you will have a total of four years of CMERS continuous active service, and a total of five years of non-continuous active service. In this case, the leave period is not counted as active service and it does break your continuity of service.
You are eligible for Normal Retirement if:
You are eligible for reduced early retirement benefits, regardless of your age, if you have completed at least 5 years of continuous active service with a CMERS participating municipality. Your retirement benefit is actuarially reduced in order to account for the probability of a longer payout period resulting from your early retirement. The reduction of their basic earned benefit for early retirement is approximately 1/2% or .005 per month for every month (6% per year) under normal retirement age. The amount of the reduction depends on how far away you are from age 55. For example, assume you would receive a $500 a month pension if you retired at age 55. If you took an early retirement at the age of 40, the amount would be actuarially reduced to $187.50 per month. Click here to go to the actuarial reduction table to determine the effect of an early retirement on your benefit.
Vested Deferred Retirement
If you terminate service before age 55, and accrued five (5) or more years of actual service before termination you may be eligible for a vested deferred retirement benefit provided you do not withdraw your contributions. Your vested retirement benefit is payable to you at the normal retirement age for your group, and is calculated in the same way as a normal retirement benefit.
You may be eligible for a disability retirement benefit if you are permanently and totally disabled from engaging in any gainful employment in the service of your municipality, as determined by the State Retirement Commission. There are two types of disability retirement: service connected and non-service connected.
To be eligible for a non-service connected disability retirement benefit you must have completed at least 10 years of continuous active service. If you are approved for a non-service connected disability retirement, your benefit will be calculated as if you had reached the normal retirement age as of the date of your disability, with no actuarial reduction for early retirement. Your benefit will be calculated using the basic normal retirement benefit formulas. If you are covered by Social Security, your CMERS benefit will be reduced at age 62 or upon receipt of a Social Security Disability Award, if earlier. You must promptly provide a copy of your award letter from the Social Security Administration to the CMERS Unit to ensure the continuation of your retirement benefit.
If your disability occurred as a result of your employment you may be eligible for a service-connected disability benefit regardless of your years of service. The existence and continuance of the disability shall be determined by the State Retirement Commission based on medical evidence and other investigations. No disability allowance will be paid if the injury was caused by willful misconduct. If you are approved for a service-connected disability retirement, your benefit will be calculated as if you had reached the normal retirement age as of the date of your disability, with no actuarial reduction for early retirement. Your benefit will be calculated using the basic normal retirement benefit formulas. However, your benefit will never be less than fifty percent of your annual rate of pay at the time your disability was incurred. Your annual pay at the time the disability began is calculated using the 52 week period preceding the start of the disability. If you are covered by Social Security, your CMERS benefit will be reduced at age 62 or upon receipt of a Social Security Disability Award, if earlier, provided the reduction does not lower your benefit to an amount less than fifty percent of your annual rate of pay at the time your disability was incurred. You must promptly provide a copy of your award letter from the Social Security Administration to the CMERS to ensure the continuation of your retirement benefit.
Disability benefits are subject to the same minimum and maximum as other retirement benefits. Your disability benefits will be reduced by the amount of any Workers' Compensation payments that you receive, other than specific indemnity awards. This workers compensation offset may suspend your CMERS disability benefits if your Workers' Compensation payments are equal to or greater than your CMERS disability benefit. You should still apply for a disability retirement according to the deadlines described above. Also, the combination of your CMERS disability benefits, Workers' Compensation payments and Social Security benefits may not exceed 100% of your final average pay.
Applying For Disability Benefits
You must apply in writing for a disability retirement benefit within one year of incurring your disability. Although you have up to one year to apply for such a retirement benefit, the disability must have existed at the time of separation from employment.
The municipality has the forms you are required to complete. In addition to these forms, you will be required to submit your treating physician's narrative reports as well as the reports of diagnostic tests, hospital summaries and any other relevant information of ongoing care for the condition on which your application is based. The medical evidence you provide will be reviewed by the Retirement Commission's Medical Examining Board. It is your burden and responsibility to provide all of this information and any other information requested by the Medical Examining Board. If you are incapacitated because of injury or illness, your spouse, family member or legal representative may submit this information on your behalf. This Board will review your disability retirement application and provide a recommendation to the State Retirement Commission. If the State Retirement Commission approves a disability retirement benefit for you, payments will be made retroactively to your date of retirement.
An annual review of the status of your disability may occur. Your eligibility ceases at the end of the month in which you recover and/or are determined no longer disabled. Termination of a disability pension does not affect your right to apply for a transfer to a normal or early pension benefit, if qualified.
You should contact the Retirement Office if you have any questions concerning disability benefits or the application process.
Important Information Regarding Your Disability Benefit
1. Your benefit will be calculated using the basic normal retirement benefit formulas.
2. If you are covered by Social Security, your CMERS benefit will be reduced at age 62 or upon receipt of a Social Security Disability Award, if earlier.
3. You must promptly provide a copy of your award letter from the Social Security Administration to the CMERS Unit to ensure the continuation of your retirement benefit. If you do not provide this letter and if CMERS discovers that you have been collecting social security, CMERS will treat this award as an overpayment and reduce your CMERS benefit until the amount has been recouped.
4. When you apply for a disability benefit, you must be "permanently and totally disabled from engaging in any gainful employment in the service of the municipality" not just the job your currently hold or position you currently occupy.
5. You must apply for the disability retirement benefit within one year after incurring the disability if you remain employed with the municipality. If you do not apply within this one year period of time, your application will not be considered. If you leave the municipality you must apply for a disability retirement benefit within 90 days after separation of service.
Applying for Retirement Benefits
Retirement benefits are not automatic; you must apply for them!
You must contact the personnel office of your employing municipality, in writing, to request the preparation of your "Application for Retirement Benefits" and other related retirement forms. You should allow a reasonable amount of time for this process, which is generally considered to be 2 to 3 months prior to your intended date of retirement. Because of the 90-day protection window, you should not execute your retirement forms prior to 90 days from your requested retirement date. Your retirement application and all accompanying documentation should be received by the CMERS Unit before the effective date of your retirement.
You will need to provide to your municipality copies of:
You will need to make a benefit payment (option) election as described in the "Benefit Payment Options" section.
You are required to complete a form entitled "Spouse Waiver of Monthly Survivor Benefits" attesting to your marital status. If you have been married for at least one year as of your requested retirement date and elect an option that, following your death, will not provide your spouse with a guaranteed lifetime monthly benefit, your spouse must provide written consent, with proper witness certification, on this waiver form. Please note: the term "spouse" is also intended to mean "civil union partner" whenever it appears herein.
If you are making application for a disability retirement, you must provide in addition to the aforementioned items, a form entitled "Disability Retirement Application Medical Report" as completed by your treating physician, as well as the supporting documentation addressed in the section entitled "Disability Retirement".
If you would like your retirement benefit check electronically deposited to your account at your financial institution, you will need to complete with your financial institution's representative a "Retirement - Direct Deposit Authorization and Input Form".
Retirement benefits are paid monthly on the last business day of the month, starting with the end of the month in which your retirement occurs.
Tax on Retirement Benefits
Retirement benefit payments are comprised of ANNUITY (the portion of the benefit that comes from the member's contributions), and PENSION (the portion paid by the retirement system). Most of your benefit will be taxable, but an exclusion ratio will be applied so that a specified amount will be excluded from tax if you made contributions prior to 1999 or on an after-tax basis. This exclusion ratio is based on the total after-tax contributions that you made during employment, or from a post-tax purchase of service credit, prior to retirement.
Federal tax regulations require that we withhold tax on retirement allowances for all recipients unless a waiver of withholding form is filed with this office. Members will receive more detailed information regarding tax withholding at the time they retire.
A Form 1099R will be mailed following the end of each calendar year that provides the necessary information to file tax returns. It should be noted that the payment dated December 31 would be included in that calendar year total, even though it may not be received until January. The Retirement Office is, however, unable to further assist or advise in the preparation of members' tax returns. Retirees should consult an accountant or attorney, or Federal and State tax authorities, for any other information concerning taxation of the allowance received from the CMERS.
A monthly statement itemizing the current and year-to-date withholdings is mailed to each retiree only when a change occurs in the gross or net amounts.
How Your Retirement Benefit Is Calculated
The amount of your pension benefit from the plan depends on:
Final Average Pay
Your Final Average Pay (FAP) is the average of your pay for your three highest paid years of municipal service. A year is any 12 consecutive month period. For example, May 1st through the following April 30th equals one year. Total your earnings from your three highest paid years, then divide this total by three to determine your FAP. Remember, pay means annual salary or wages, including overtime, temporary Workers' Compensation payments, and the value of any food, lodging, fuel, or laundry provided to you by your municipality. It excludes any fees or allowances for expenses, and any lump sum reimbursement for accrued sick and vacation time.
Minimum And Maximum Benefits
No benefit plus payments from Social Security or Workers' Compensation will be less than $1,000 per year. The maximum annual benefit allowed including Workers' Compensation and Social Security benefits, is 100% of your final average pay.
The Benefit Formulas
Your basic normal retirement benefit is calculated using one or two formulas, depending on whether or not you are covered by Social Security, and if you are covered by Social Security depending on your age and whether or not you are receiving a Social Security Disability Award.
If your employment is not covered by Social Security or if your employment is covered by Social Security and you retire before age 62 and you are not receiving a Social Security Disability Award when you retire, your basic annual benefit equals:
2 % X Final Average Pay X Years/Months of Service
Keep in mind your years of service include fractions of a year, based on completed months of service. The above formula provides you with your basic annual benefit. To determine what your basic monthly benefit would be, divide your basic annual benefit by 12.
Please remember, if you retire prior to age 55 (with at least 5 years of continuous active service or 15 years of non-continuous active service but less than 25 years of service, inclusive of aggregate service) the benefit is actuarially reduced in order to account for the probability of a longer payout period resulting from your early retirement. Please click here for the actuarial reduction chart.
One of the components in calculating the amount of your pension benefit is determined by your Final Average Pay (FAP). Other components are your age and number of years of creditable service at retirement or termination. The years of service, which a member is credited with in the retirement system may differ from actual employment history.
Selecting the Option Payment Plan
Several choices are available regarding the distribution of retirement allowances. Pensions must be paid in lifetime monthly payments but payments differ depending upon option selection. Option choice also dictates what benefits will be paid to survivors. Your health and age at retirement, income from other sources, financial obligations and providing for survivors are some of the factors involved in this decision. Your choice must be made on or before the date that the allowance becomes effective. If you elect to have your retirement benefits paid to someone else when you die, the recipient would be your contingent annuitant.
There are five payment options for CMERS members at retirement. Members are urged to consider carefully the payment plans available for their election at retirement. Once a payment plan or option is selected at retirement, the option can NEVER be changed regardless of any subsequent happenings such as a divorce or death of a contingent annuitant or beneficiary.
The options are summarized as follows:
1. Option D - Straight Life Annuity. This option provides you with the highest monthly benefit for your lifetime. However, all payments stop at your death.
2. Option A - 50% Spouse. This option first provides a reduced monthly benefit to you for life. Then, 50% of that benefit will continue after your death for the lifetime of your surviving spouse (contingent annuitant).
3. Option B - 50% or 100% Survivor. This option arranges to continue payments after your death to the contingent annuitant you choose. This contingent annuitant can be any person, including your spouse. The option provides a reduced monthly benefit to you for life. After your death, a percentage of that benefit, either 50% or 100%, whichever you choose, will continue for the lifetime of your contingent annuitant.
4. Option C - 10 Year or 20 Year Period Certain. This option provides a reduced monthly benefit to you for your lifetime with payments guaranteed from your retirement date for 10 or 20 years (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 which allows you to name more than one contingent annuitant, each of whom would share each remaining monthly payment equally.
The "closest age" and not actual age of both the member and/or the contingent annuitant may be used to compute some of these option payments.
The chart below is an illustration as to how a payment option may influence a member's monthly benefits. The chart is based on a 62 year old member with a spouse of the same age and an estimated straight life annuity of $1,644 per month. The chart is meant solely to give an idea of the actuarial differences in monthly amounts based upon the payment option selected. The contingent annuitant does not have the right or the opportunity to designate a beneficiary.
Important Information To Consider When Making Your Option Election
If you have been married for at least one year prior to the commencement of your retirement benefits, written spousal consent will be required if you do not provide your spouse with a lifetime benefit (50% or 100% option) in the event of your death.
Regardless of your option choice or marital status, you must submit proof and/or attest to your marital status at the time of your retirement. Failure to submit the required waiver and documentation prior to your effective date of retirement may result in a delay of retirement income payments.
If you retire and have not designated in writing the benefit payment option you would prefer or have not obtained the consent of your spouse, your benefit will be paid according to your marital status when payment begins. Except for a 10 or 20 year period certain, each option requires you to designate a beneficiary. Your beneficiary would receive a lump sum refund of any remaining contributions and interest, if any. This lump sum payment occurs only after your death and the death of your designated contingent annuitant, if applicable.
A married member's option selection must be signed off by the spouse as acknowledgment of receipt of the notice of option selection and of his/her understanding of the consequences of the option chosen. Should a married member file a choice of retirement option form that has not been acknowledged by his/her spouse, the unacknowledged option selection form shall take not take effect.
Death benefits are any payment made by the retirement system to a beneficiary of a deceased member of the system. Such payments may take the form of the refund of the member's accumulated contributions, or lifetime monthly payments if the beneficiary qualifies for such payments.
If you should die before you retire, death benefits may be due to your survivor(s). It is important for you to know that as a CMERS member you can, in some instances, influence the type and amount of benefits which may be available to your survivor(s). Should you become seriously ill or injured, or have a life threatening condition, you or someone on your behalf should contact the CMERS Unit as soon as possible, either directly or through your personnel office.
Spousal Benefits Before You Retire
Your spouse may receive monthly benefits if you die before retirement if eligible. Should you die while actively employed or while on an approved leave of absence, your spouse will receive a monthly benefit if:
The municipality (not CMERS) where you were employed should be notified of your death as soon as possible.
Your spouse's benefits will begin on the day after your death. Monthly payments will then continue for his or her lifetime. The benefit amount will equal 50% of the following: The payment you would have received under Option 2 (the 50% spouse option) averaged with the payment you would have received under Option 1 (the Straight Life Annuity option) had you retired on your date of death. If you had not reached age 55 at the time of your death, the benefit will be calculated as though you were age 55.
If A Spousal Benefit Is Not Applicable
If you are not married or if your spouse is not eligible to receive monthly benefits, your designated beneficiary (who could be your spouse) will receive a lump-sum payment. Once again for active members, the municipality (not CMERS) where you were employed should be notified of your death as soon as possible.
The 90 Day Protection Window
Suppose you apply for retirement and select Option 3 or Option 4. If you die within 90 days after you first elect either one of these options, but prior to your date of retirement, your contingent annuitant may receive payments in accordance with your selection. If your death occurs after this 90 day period and you have not yet retired, or if you die within 90 days after electing Option 1 or 2 but prior to your date of retirement, the benefit paid will be as described earlier in the subsection entitled "Spousal Benefits Before You Retire". Again, both the municipality where you were employed and the CMERS Unit should be immediately notified of your death.
After Retirement Benefits Have Started
If you die after benefits have started, your designated contingent annuitant or beneficiary will receive any benefits due under the option you chose before retirement. The municipality (not CMERS) where you were employed should be notified of your death as soon as possible. It is necessary to have the CMERS Unit notified of your death as soon as possible to facilitate the commencement of benefits for your contingent annuitant or beneficiary.
Suppose you elect the Straight Life Annuity option and you die before your contributions and earned interest are depleted. In this case, your designated beneficiary will receive a lump sum refund equal to the remaining portion of your contributions and interest. If no beneficiary was designated, the lump-sum refund will be paid to your estate.
If you provide for an income to continue to a contingent annuitant for life and both you and that contingent annuitant die before your contributions and earned interest are depleted, a similar refund will be made. If no beneficiary was designated, the lump-sum refund will be paid to the estate.
Please note: The term "spouse" is also intended to mean "civil union partner" whenever it appears herein.
If you are do not meet the eligibility requirements for a survivor benefit or do not have a designated dependent beneficiary, the lump sum value of your contributions and interest will be paid to your designated beneficiary or your estate.
Cost-of-Living Adjustment (COLA)
You will be eligible for an annual cost of living adjustment (COLA) payable on the July 1st following your retirement date and each July 1st thereafter. Your contingent annuitant will also continue to receive annual COLAs following your death.
The COLA for non-disability retirements will range from a minimum 2.5% to a maximum of 6% based on a 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.
Specifically, the COLA will be determined in accordance with the following formula:
For disability retirements, the COLA will range from a minimum of 3% to a maximum of 5% based upon the performance of the fund's investments. Click here to see the COLAs established for the last ten years.
Re-employment After Retirement
A retiree may be employed by a participating municipality after retirement commences without affect on receipt of pension, provided the retiree is employed as a temporary worker. If you are reemployed in a temporary position in a CMERS participating municipality after you have retired, you may work no more than 90 days in any one calendar year without affecting your pension rights.
If you exceed the 90 days, even by one day, you must reimburse the CMERS for all retirement benefits received during your reemployment period. If you are reemployed by a CMERS participating municipality in a permanent position after retirement, your pension payments and benefits will cease. You will resume membership in the CMERS and receive additional service credit for this period of reemployment when you next retire. In either case, it is your responsibility to notify the CMERS Unit of your reemployment.
In sum, should a retiree return to CMERS membership, the first pension becomes "frozen". He/she is enrolled as a new member of the system and when they re-retire, the previously "frozen" benefit is added to the benefit which was accrued under the new membership.
Changes in the Monthly Pension Check
It may be necessary from time to time to change tax withholdings, the regular mailing or alternate mailing address, or make changes due to divorce or death. It is the responsibility of the retiree to notify our office in writing of any changes which must be made to your pension check. Changes received by the 15th of any month can be processed for that month. If changes are received after the 15th, we cannot guarantee that the change will occur for that month.
The law requires that an approved actuary make regular valuation of the System's assets and liabilities. The actuarial valuation determines the financial condition of the retirement fund and the required state contribution to the System. To review the latest actuarial valuation, please click here.
Social Security - Age 62 Offset
Remember, many CMERS positions are not covered by Social Security. These non-covered employees do not contribute towards Social Security, and instead make contributions towards their government pension plan (CMERS). For these non-covered employees, a portion of their pensions constitutes replacement for Social Security. Therefore, in theory, the retirement benefits payable under these governmental plans could be described as being made up of two parts; (i) actual pension, and (ii) "hypothetical" social security. The CMERS system is structured so that this difference is taken into account. Thus, a CMERS member who is not covered by Social Security pays a 5% contribution while a CMERS members covered by Social Security only pays a 2¼% contribution to "equalize" the difference.
The CMERS system has a built-in social security reduction to equalize the benefits between those members covered by Social Security and those who are not. While a person can collect full retirement with 25 years of service (and ostensibly retire at 45), Conn. Gen. Stat. section 7-437 requires the CMERS retirement benefit to be reduced when the retiree is eligible for social security which is at age 62 - not at the age of "full retirement." Full Social Security is paid at ages 65 to 67, depending on your year of birth.
The state legislature drafted a formula for CMERS to use with regard to this age 62 reduction. In essence, the formula reduces the benefit by approximately 25% (e.g. a benefit of $1,357.17 per month would be reduced to $1,031.33). This reduction will not occur for non-Social Security CMERS participants. In sum, if the member is retired and is covered by Social Security, his or her benefit will automatically be reduced by approximately 25% when they reach the age of 62.
If the member retires and collects a MERS pension after the age of 62, the benefit will be reduced at that time. In essence the reduction occurs in part because a covered member is paying less contribution (almost 3% less) than a non Social Security-covered member and a covered member will "make up" the reduction through his or her ability to apply for, and receive benefits from the Social Security system.