STATE EMPLOYEES RETIREMENT COMMISSION		55 ELM STREET HARTFORD, CONNECTICUT 06106-1775 TELEPHONE: (860) 702-3480 TELEFAX:(860) 702-3489
MEDICAL EXAMINING BOARD for DISABILITY RETIREMENT
HEALTH CARE COST CONTAINMENT COMMITTEE
	STATE OF CONNECTICUT RETIREMENT AND BENEFIT SERVICES DIVISION OFFICE OF THE STATE COMPTROLLER

RETIREMENT & BENEFIT SERVICES DIVISION MEMORANDUM

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:

• Your agency must begin SERS Tier IIA retirement plan contributions on the first payroll period following expiration of the six-month period.

• Your agency must notify the Division's Data Base Unit via written memorandum or email to osc.databaseunit@po.state.ct.us of the affected employee's name, social security number, employee number, employment date and home address.

• Your agency is responsible for informing the employee that mandatory retirement contribution deductions will commence.
  

• The Division will notify affected employees of their mandatory SERS Tier IIA membership, request that they contact their human resources office to complete the Form CO-931 and arrange for collection of any mandatory contributions due.

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)

• Employees with prior state service must rejoin the retirement plan (SERS, TRS or ARP) to which they were previously assigned. Employees rejoining SERS will be placed in the appropriate tier and plan as required by current SERS plan provisions.

• Employees with prior SERS membership rehired after a permanent break in service should be treated as new employees and offered the retirement plan election options appropriate to their present position. A "permanent break in service" occurs when an employee who was not vested separates from state service and the elapsed time between such separation and date of reemployment exceeds the greater of five years or the duration of prior service.

• Employees who previously waived retirement plan membership pursuant to a collective bargaining agreement covering part-time faculty members within the CT higher education system are ineligible for retirement plan membership during subsequent part-time employment with a Connecticut Community College.

• Employees whose only prior service consists of public school teaching should be treated as new hires for retirement plan selection purposes.

DUAL EMPLOYMENT

• Individuals who work for another state agency and currently participate in SERS, ARP or TRS are not entitled to change retirement plan participation as a result of accepting supplemental employment with the community colleges. Such employees must remain in the retirement plan to which they are assigned at the time of commencing any dual employment

• Individuals who work for the University of Connecticut or one of other the four state universities on a part-time basis and have waived retirement plan membership are ineligible for retirement plan membership during any part-time employment with a Connecticut Community College.

• If you have questions about completion of the CO-931 form, contact the Division's Data Base Unit (860-702-3515; email osc.databaseunit@po.state.ct.us) or refer to "Instructions for Completion of Form CO-931, Designation of Retirement System-Tier-Plan-Beneficiary", which were issued with the Retirement & Benefit Services Division memorandum dated August 13, 1998, (http://www.osc.state.ct.us/memoarchives2/98retire/2TIER2A.HTM.)

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

BY:

Thomas C. Woodruff, Ph.D., Director
Retirement & Benefit Services Division

TCW/JK/jk

Return to Index of 2008 Retirement Division Memoranda
Return to Index of Comptroller's Memoranda
Return to Comptroller's Home Page