Topic:
STATE OFFICERS AND EMPLOYEES; RETIREMENT AND PENSION SYSTEMS; TEACHERS;
Location:
TEACHERS - RETIREMENT;

OLR Research Report


December 7, 2000

 

2000-R-1110

50-STATE SURVEY OF CERTAIN TEACHER RETIREMENT PLAN PROVISIONS

 

By: Judith Lohman, Chief Analyst

You asked for a 50-state survey of the following provisions of state retirement plans for teachers: (1) vesting service requirements; (2) purchasing credit for teaching service in another state; and (3) the minimum age and service requirements for receiving a normal, unreduced retirement benefit.

When an employee covered by a pension plan has worked long enough to qualify for retirement benefits from the plan, he “vests” in the plan. Of the 51 state teacher retirement plans surveyed for this report, 15, including Connecticut, require teachers to have at least 10 years of service to vest; two require between five and 10 years; 26 require five years; and eight require less than five years.

Nearly all the plans allow members to purchase credit for out-of-state teaching service, but most impose limits on such purchases. Among the most common are limits on the number of years of out-of-state service a member can purchase, requiring members to have a minimum number of years of service in the state plan before he can purchase other service, and limiting purchases to service for which the member will receive no other pension. Connecticut's teacher retirement system limits purchases in all three ways.

Most plans specify minimum age and service requirements before a teacher is eligible to receive a full (“normal”) retirement pension. Twenty-six states, including Connecticut, allow members to retire with a full pension at any age if they have a minimum number of years of credited service (the most common minimum is 30 years). Some states allow a member to retire with full benefits if his age and years of service added together equals or exceeds a specified number, such as 80.

The table below shows the requested information for each state, including Connecticut. Information comes from a National Education Association survey of the characteristics of 100 large public pension plans, published in September 2000, supplemented by information from state retirement system websites.

VESTING, OUT-OF-STATE SERVICE, AND NORMAL RETIREMENT AGE AND SERVICE REQUIREMENTS IN STATE TEACHER RETIREMENT PLANS

STATE

VESTING

OUT-OF-STATE SERVICE PURCHASES

NORMAL RETIREMENT AGE AND SERVICE

Alabama

10 years

Maximum 10 years.

Must be an active member of Alabama system with at least 10 years credited service in Alabama.

Out-of-state service must have been previously credited under another public retirement plan but must not qualify member for any benefits from any other plan, except Social Security.

60/10

Any/25

Alaska

8 years

Maximum 10 years or 10 years out-of-state and military credit combined.

Tier I (hired 7/1/55 –6/30/90) – 55/8; Any/20

Tier II (hired 7/1/90 or after) – 60/8; Any/20

Arkansas

5 years

Unlimited

60/5

Any/28

Arizona

Partial vesting – 5 years

Full vesting – 10 years

No limit if performed under another US public retirement plan and not receiving or eligible to receive benefits based on that service.

65/5

62/10

Age + years of credited service = 80

California

5 years

Maximum - 10 years

60/5

Colorado

5 years

Members may purchase service credit for any public- or private-sector employment in the United States and its territories provided the employment is verifiable and is not vested in another pension plan (excluding Social Security). Some restrictions apply to new members since January 1, 1999.

50/30

55/Age+ service = 80

60/20

65/5

Connecticut

10 years

Limit – 10 years at the rate of one year of out-of-state service for each two years of Ct. service

60/20

Any/35

Delaware

5 years

Maximum – 4 years

62/5

60/15

Any/30

Florida

6 years

Maximum – 5 years. Members may purchase one year of out-of-state service for each year of Florida public school service, if they have at least 6 years of Florida service.

62/10

Any/30

Georgia

10 years

Members may purchase one year of out-of-state service for each year of Georgia public school service.

Limit – 10 years

60/10

Any/30

Hawaii (employees hired after 6/30/84 and covered by Social Security)

10 years

None

62/10

55/30

Idaho

5 years

Allowed (no additional details available)

65/5

Age + service = 90

Illinois

5 years

Maximum – 40% of Illinois service or 10 years, whichever is less

62/5

60/10

55/35

Indiana

10 years

Members hired before 7/1/81 - Maximum 8 years of credit at the rate of one year of out-of-state service for each 4 years Indiana service.

Members hired on or after 7/1/81 - No limit.

In either case, member must have at least 10 years of Indiana service credit to purchase out-of- state service.

65/10

60/15

Age + service = 85

Iowa

4 years or age 55

No limit

65/Any

62/20

Age+ service= 88

Kansas

10 years

No limit

65/Any

62/10

Age+ service=85

Kentucky

5 years

Limit – 10 years at the rate of one year of out-of-state service for each two years of Kentucky service.

55/5

Any/27

Louisiana

10 years

Limit – 5 years

Member must have at least 10 years of Louisiana service.

60/10

Any/20

Maine

10 years

Limit - 10 years

Member must have at least 20 years of Maine service.

62/10

Maryland

5 years

Limit – 10 years

60/Any

Any/30

Massachusetts

10 years

Limit – 10 years or total amount of Massachusetts service, whichever is less

65/10

Michigan

10 years

Limit – 15 years

60/10

Any/30

Minnesota

3 years

Yes, but purchase option is scheduled to expire on 5/16/02

65/3

62/30

Mississippi

4 years

Limit - 5 years

Members must have at least four years of Mississippi service.

60/4

Any/25

Missouri

5 years

Limit – 10 years

60/5

Any/30

Age + service = 80

Montana

5 years

Limit – 5 years

Member must have at least at least five years of Montana service.

60/5

Any/25

Nebraska

5 years

Limit – 10 years

65/5

Age 55 to 64 – Age + service = 85

Nevada

5 years

Limit – 5 years

Member must be vested

65/5

60/10

Any/30

New Hampshire

10 years

Unlimited for teachers hired after 6/30/90

60/Any

New Jersey

10 years

Limit – 10 years

60/Any

New Mexico

5 years

Limit – 5 years

65/5

Any/25

Age + service=75

New York

5 years

Allowed only for Tier I members (those joining before 7/1/73)

Tiers 3 and 4:

62/5

55/30

North Carolina

5 years

Unlimited at the rate of one year of out-of-state service for every two years of N.C service. Members joining after 6/30/81, must have five years of N.C. service.

65/5

60/25

Any/30

North Dakota

3 years

Unlimited if member is not eligible for pension for service from other state

65/3

Age + service = 85

Ohio

5 years

One year for each year of Ohio service

65/5

Any/30

Oklahoma

10 years

Limit – 5 years

62/10

Age + service = 90

Oregon

5 years

Limit – 4 years, if member ineligible to receive pension benefits based on the service

58/Any

Any/30

Pennsylvania

10 years

Limit – Amount equal to Pa. service or 12 years, whichever is less

62/1

60/30

Any/35

Rhode Island

10 years

Limit – 5 years

Member must be vested.

60/10

South Carolina

5 years

Unlimited if the service would be covered in S.C. and the member is not eligible for any pension for the service

65/Any

Any/30

South Dakota

3 years

Unlimited if the member is not eligible for any pension for the service

65/3

60/25

55/30

Tennessee

5 years

One year for each year of Tennessee service

60/5

Any/30

Texas

5 years

Limit – 10 years or number of years of Texas service, whichever is less

65/5

Age + service = 80

Utah

4 years

One year for each year of Utah service

65/4

Any/30

Vermont

5 years

Limit – 10 years

62/5

Any/30

Virginia

5 years

Unlimited for vested members

65/5

50/30

Washington Plan 1 (member before 10/1/77)

5 years

One year for each year of Washington service.

Limit – 4 years

Member must not be eligible for pension benefits from other retirement system for the service.

Any/30

60/5

55/25

Washington Plan 2 (member since 10/1/77)

5 years

Unlimited but may be used only to qualify for retirement. Does not affect benefits.

65/5

West Virginia

5 years

Limit – 10 years at the rate of one year of out-of-state service for two years of W. Va. service

60/5

55/30

Any/35

Wisconsin

Immediate

One year for each year of Wisconsin service

Limit – 10 years

65/Any

57/30

Wyoming

4 years

Limit – 5 years

Member must be vested.

60/4

Age + service = 85

JL:ro