Retirement Services Division MEMORANDUM NO. 2012 - 04
STATE EMPLOYEES
RETIREMENT COMMISSION

MEDICAL EXAMINING BOARD
For DISABILITY RETIREMENT		 COMPTROLLER'S SEAL STATE OF CONNECTICUT 55 ELM STREET
HARTFORD, CONNECTICUT
06106-1775
Telephone (860) 702-3480
Facsimile (860) 702-3489
STATE OF CONNECTICUT
RETIREMENT SERVICES DIVISION
OFFICE OF THE STATE COMPTROLLER


RETIREMENT SERVICES DIVISION

MEMORANDUM NO. 2012 - 04

March 2, 2012

TO THE HEADS OF ALL STATE AGENCIES

Attention: Human Resource Officers and Payroll Officers
Subject: General Provisions to Purchase Retirement Credit in the Hybrid Plan of the State Employees Retirement System

I. Introduction

State Teachers and Professional staff members in higher education as defined by the CT General Statutes first hired on and after July 1, 2011 may join the Hybrid Plan, one of the State Employees Retirement System's (SERS) newest defined benefit plan. Employee contributions are required in the Hybrid Plan at 5% of salary for all new Hybrid plan members. Generally, retirement credit accrues for Connecticut state service while the Hybrid member is actively employed and making the required retirement contributions to SERS.
Hybrid members may also obtain additional retirement credit or reinstate retirement credit. The additional retirement credit provisions resemble those contained in Tier IIA and in Tier III. In order for Hybrid members to obtain additional retirement credit, they must purchase the retirement credit by paying in most cases required contributions and statutory interest.
The intent of this memorandum is to provide:

II. Description of Hybrid Purchase Opportunities

There are three types of prior service that may be purchased for retirement credit assuming all requirements are met. Each request for a calculation is non-binding.
1. Prior active duty military service: A Hybrid member is eligible to purchase vesting and credited service for active duty military service during war-time or national emergency in the Armed Forces (United States Army, Navy, Marine Corps, Coast Guard or Air Force) for which they received an Honorable Discharge, provided the member has not or will not receive any retirement allowance/pension from another source other then the federal government for the same service. However, the member must apply to purchase prior military service within one year of commencement in Connecticut state service as a Hybrid member or December 31, 2012, whichever is later. The purchase must then be completed by remitting the sum due within the time frame provided on the payment notice.

The cost to the Hybrid member to purchase each year of qualifying military service will equal four percent (4%) of the annual full-time rate of compensation when first hired into Connecticut state service. (The Hybrid member may elect payroll deductions at five percent (5%) interest per annum).
A Hybrid member is limited to receiving retirement credit for military service equal to war-time service plus three years national emergency service. In any event, a Hybrid member may not obtain more than ten years credit in the aggregate for all military service.
2. Prior full-time employment with another state: A Hybrid member is eligible to purchase vesting and credited service for active full-time employment with another state, provided the member has not received and will not receive a pension from another source for the same service, and the other state makes similar retirement credit provisions for former Connecticut state employees. A questionnaire will be sent to the out-of-state retirement system to which the member belonged to determine retirement plan similarity.
The cost to the Hybrid member to purchase each year of qualifying service with another state shall be six percent (6%) of the annual full-time rate of compensation when first hired into Connecticut state service plus a five percent (5%) interest charge per year from the date such service was rendered to date of purchase.
A Hybrid member is limited to receiving ten years credit in the aggregate for all service to other states, and not more than one year of this type of service shall be counted for each two years of credited Connecticut state service.
3. Prior Connecticut Municipal Employment: A Hybrid member is eligible to purchase credited service for a prior period of municipal service during which he/she was a member of the Connecticut Municipal Employees Retirement System (CMERS), provided the member has not received and will not receive a pension from another source for the same service.
The cost to the Hybrid member to purchase each year of qualifying municipal service will equal the employee's contributions to CMERS plus five percent (5%) interest charge per year from the date such service was rendered to date of purchase.
Purchased municipal service cannot be added to the Hybrid member's credited service until said member has at least ten years of vesting credit, exclusive of such municipal service.
Hybrid members may elect payroll deductions not in excess of 24 months. Such installment payments include interest of five percent (5%) per annum.

III. Restoration of prior Hybrid vesting and credited service

A former member of the Hybrid Plan who is reemployed before a permanent break has occurred may restore retirement credit for their prior Hybrid vesting and credited service for which retirement contributions and interest were refunded. A permanent break in service occurs if there is a break in service; the individual is not vested; and the period from severance from service date to reemployment commencement date equals or exceeds the Hybrid vesting service prior to that severance, or five years, whichever is greater.
Usually, the cost to the Hybrid member to restore retirement credit shall equal the full amount of the refund plus interest at the rate of five percent (5%) per annum calculated from the date of refund to date of restoration.
Hybrid members may elect payroll deductions. Such installment payments include interest of five percent (5%) per annum.

IV. Leaves of absence without pay (LAW)

As a general rule, leaves of absences without pay will diminish the Hybrid member's vesting and credited service unless it is the type of leave that can be purchased for retirement credit provided the employee completes such purchase. There are two exceptions to this rule: retirement credit is awarded "free" to the employee for leaves during which the individual is receiving qualifying temporary Workers' Compensation, Disability Compensation or leaves taken in accordance with Connecticut General Statutes, Section 5-248c entitled "Voluntary schedule reduction program".
The following types of leaves without pay can be purchased for vesting and credited service:
1. For personal illness, maternity or qualifying family or parental leave: A Hybrid member may purchase vesting and credited service for leaves granted for the protection or improvement of the member's health, leaves granted pursuant to C.G.S., Section 5-248a, entitled: "Family and medical leave from employment"; or leaves granted for family illness or eligible parental leave as provided in an applicable collective bargaining agreement.
The length of such leaves is an important factor in determining a Hybrid member's right to obtain retirement credit as well as the cost to the individual.
Qualifying leaves of thirty (30) calendar days or more are purchasable in one month increments. As an example, if a member is on a leave without pay for a period of sixty three (63) consecutive ca1endar days, sixty (60) days of such leave are purchasable. In the case of such leaves without pay of a month or more, the contributions required from the member will be five percent (5%), whichever is applicable, of the member's monthly salary at the time such leave was taken with five percent (5%) interest per year from the period of the leave to the date of the purchase.

Members may also purchase qualifying leaves of absences without pay, each of which is less than thirty (30) consecutive calendar days in duration, if the cumulative total of individual working days equals one month. In such case, one month is considered to be a total of twenty-two (22) working days. If the purchase is composed of several leaves totaling one month, the cost to the member will be five percent (5%) of the daily rate of salary at the date of application to receive credit, multiplied by twenty-two (22) without an accompanying interest charge.
Not more than fifteen (15) months of vesting and credited service in any five (5) year period may be obtained in combination for personal illness, family leave and parental leave.
2. For military leave of absence without pay: A Hybrid member may purchase vesting and credited service for a leave without pay during which said member served in the Armed Forces as described above in Section II-1 of this memorandum provided there is a return to state service within ninety (90) days of honorable release from active duty.
The cost to the Hybrid member to obtain the retirement credit will equal five percent (5%) contribution level. For retirement purposes, not more than the war-time service plus three (3) years shall be counted as vesting and credited service for military leave without pay.

V. Introduction of Hybrid Purchase Request Forms and Instructions

There are three (3) Hybrid Purchase Request Forms, each designed to address retirement credit issues that may arise at different stages in the Hybrid member's career. As described in Section I of this Memorandum these forms are available on the OSC website at osc.ct.gov/agencies/forms/retire/index.html.
1. Form CO-991 entitled "Retirement Credit Purchase Request for Prior Miscellaneous Service for prior military service, prior employment with another state, and prior Connecticut Municipal Employee's Retirement System Service (CMERS) - Tier III and Hybrid Members Only". Every Hybrid member of SERS hired on or after February 1, 2012 must complete a Form CO-991 and the form should be processed in accordance with the instructions indicated. The Hybrid member must apply to purchase miscellaneous service which was rendered prior to the commencement of Connecticut state service, complete the "Member Request" section or sign the "Member Statement and Acknowledgement".
2. Form CO-992 entitled "Retirement Credit Restoration Request - Reemployed Tier III and Hybrid Members Only". The reemployed Hybrid member must make application on Form CO-992 to restore retirement credit for prior service for which the member received a refund of Hybrid retirement contributions.
3. Form CO-993 entitled "Retirement Credit Purchase Request for Qualifying Leaves without Pay - Tier III and Hybrid Members Only". The Hybrid member must make application on Form CO-993 to obtain retirement credit for all eligible leaves of absence without pay (LAW) such as: 1) For personal illness, maternity or qualifying family or parental leave or 2) for military leave of absence without pay.
It is imperative that all retirement credit purchase request forms be submitted to the Retirement Services Division with the required documentation listed on said form(s) otherwise, the application will not be processed and it will be returned to the Hybrid member.

When the purchase application is completed for submission to the Retirement Services Division, the agency should retain a copy of the form in the individual's personnel file. Assuming that the eligibility to obtain credit is established, a payment notice will be sent to the member reflecting the cost to obtain the retirement credit. Any available payment options will be presented along with instructions to the member on how to complete the purchase.

VI. Summary

Purchase opportunities are available only to active and vested members of the Hybrid Plan; it is not available to retirees or any other payees.
In the processing of requests from active Hybrid members, agency personnel may call the Retirement Credit Purchasing Unit at (860) 702-3511 or through the central Retirement Services Division email address osc.rsd@po.state.ct.us with questions that may arise.

Very truly yours,
STATE EMPLOYEES RETIREMENT COMMISSION KEVIN LEMBO, SECRETARY EX OFFICIO
By:
Brenda K. Halpin, Director
Retirement Services Division

BKH/CN/ddk

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