Substitute House Bill No. 6859

Public Act No. 01-80

AN ACT ENHANCING BENEFITS IN THE POLICE OFFICER AND FIREFIGHTER'S SURVIVORS BENEFIT FUND AND THE MUNICIPAL EMPLOYEES' RETIREMENT SYSTEM.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 5-166a of the general statutes is repealed and the following is substituted in lieu thereof:

Any person who is appointed a judge of the Supreme Court or Superior Court, or, prior to July 1, 1978, was appointed to the Common Pleas, Circuit or Juvenile Court and who has, at the time of [his] appointment, at least ten years of state service to [his] such person's credit for purposes of the state employees retirement system may, at any time within twelve years after initial appointment as a judge to any of such courts, elect to remain, or, if [he] such person has withdrawn from said system, to be reinstated upon payment of contributions as provided in section 5-167, as a member of the state employees retirement system in lieu of participation in the benefits of sections 51-49 to 51-50b, inclusive, and 51-51, and to make contributions to the State Employees Retirement Fund based upon [his] such person's salary as such judge and to receive credit for retirement purposes in said system for the period of service as such judge. Any contributions made under section 51-50b by any such judge prior to such election shall be transferred from the General Fund to the State Employees Retirement Fund and such judge shall be credited, for purposes of retirement under the state employees retirement system, with the period of [his] such person's service as a judge. The contributions to the state employees retirement system of any such person who does not elect to remain or be reinstated in the state employees retirement system during such twelve-year period or who, during such period, dies or indicates, in writing, [his] an intention not to remain or be reinstated in such system shall be refunded to such person or to [his] such person's named beneficiary or, if none, [his] such person's estate, as the case may be. Any such refunds processed on or after January 1, 2001, shall include interest credited in accordance with the provisions of subsection (b) of section 5-166. Notwithstanding the provisions of this chapter or chapter 872, any retired state employee who is appointed a judge and who resigns prior to retirement as a judge shall not receive a reduction in the amount of retirement income or retirement benefits that [he] such person would have received had [he] such person remained a retired state employee, including any cost of living allowance granted to retired state employees.

Sec. 2. Section 7-323e of the general statutes is repealed and the following is substituted in lieu thereof:

(a) When any full-time paid [policeman or fireman] police officer or firefighter who was covered by the provisions of this part dies, either before or after retirement, the surviving spouse of such [policeman or fireman] police officer or firefighter shall, until the death or remarriage of such spouse, receive out of the fund a monthly sum equal to [twenty-five] thirty per cent of the compensation of such [policeman or fireman] police officer or firefighter.

(b) During any period in which such spouse has one dependent child under eighteen years of age, provided such child was dependent on such [policeman or fireman] police officer or firefighter at the time of death, such spouse shall receive from the fund an additional monthly sum equal to [twelve and one-half] fifteen per cent of the compensation of such [policeman or fireman] police officer or firefighter.

(c) During any period in which such spouse has two or more dependent children under eighteen years of age, provided such children were dependent on such [policeman or fireman] police officer or firefighter at the time of [his or her] death, such spouse shall receive from the fund an additional monthly sum equal to [twenty-five] thirty per cent of the compensation of such [policeman or fireman] police officer or firefighter.

(d) If no spouse survives such [policeman or fireman] police officer or firefighter who, at death, has one or more dependent children under eighteen years of age, or upon the death or remarriage of the spouse while receiving monthly payments with respect to one or more dependent children as hereinbefore described, the Retirement Commission shall cause to be paid to the legal guardian of such dependent child or children under eighteen years of age, or in its discretion to the spouse if such spouse remarries, for the sole use and benefit of such child or children a monthly sum equal to [twenty-five] thirty per cent of compensation in the case of one such child and [thirty-seven and one-half] forty-five per cent of compensation in the case of two or more children. In any case where payments under this section are being made with respect to one or two such children, as each such child reaches eighteen years of age payment as to such child shall cease.

(e) If no spouse or no dependent child or children under eighteen years of age survive such [policeman or fireman] police officer or firefighter, and such [policeman or fireman] police officer or firefighter is survived by a dependent father or mother, they shall receive, in a manner determined by the Retirement Commission, a monthly sum from the fund equal to that herein provided to be received by a spouse without dependent children, provided, no child or children shall be entitled to receive double benefits by reason of the death of both parents and such child or children shall receive the highest benefit payable by reason of the death of either parent.

(f) If no spouse or no dependent child or children under eighteen years of age and no dependent father or mother survive such [policeman or fireman] police officer or firefighter, and such [policeman or fireman] police officer or firefighter is survived by a beneficiary designated by such [policeman or fireman] police officer or firefighter prior to death on a form prescribed by the Retirement Commission, such beneficiary shall receive an amount equal to the deceased's contributions under section 7-323c without interest. If no named beneficiaries survive such [policeman or fireman] police officer or firefighter the aforesaid contributions, without interest, shall be paid to the executor or administrator of such deceased [policeman or fireman] police officer or firefighter, or, at the option of the Retirement Commission, in accordance with the terms of section 45a-273.

Sec. 3. Section 7-436 of the general statutes is amended by adding subsection (e) as follows:

(NEW) (e) On and after January 1, 2002, the following formula shall be used for the purpose of calculating the monthly allowance of each member covered by the Old Age and Survivors Insurance System on the first of the month after such member becomes eligible for Social Security or until such member qualifies for a Social Security disability award, if earlier: One-twelfth of one and one-half per cent of such member's final average pay up to the breakpoint for the year in which such member separated from service plus two per cent of such member's final average pay in excess of the breakpoint for the year in which such member separated from service, multiplied by such member's years of retirement credit and fractions thereof. Such allowance shall be reduced in recognition of any optional form of retirement income elected in accordance with section 7-439g. For the purposes of this subsection, "breakpoint" has the same meaning as "year's breakpoint" in subsection (a) of section 5-192f.

Sec. 4. Section 7-439b of the general statutes is repealed and the following is substituted in lieu thereof:

(a) On July 1, 1986, and on July first of each subsequent year the State Retirement Commission shall adjust the retirement allowance of each member of the Municipal Employees' Retirement Fund and any annuitant who is receiving benefits under the provisions of this part to include a cost of living increase. There shall be an annual actuarial determination of the increase by determining the annual yield on the assets of the fund. In determining the yield, the actuary shall use an adjusted asset value, such that the market values of assets are adjusted to recognize a portion of realized and unrealized gains or losses each year until fully recognized. The amount of the increase, as a percentage of retirement allowance, shall be the excess of the annual yield over a six per cent yield, provided no increase granted under the provisions of this section shall be less than three per cent nor more than five per cent. Each such member shall receive the increases beginning on the first July first following the member's sixty-fifth birthday. Each such annuitant shall receive the increases beginning on the first July first following the date the deceased member would have reached the age of sixty-five. Any member who retired for disability under the provisions of section 7-432 shall receive the increases beginning July 1, 1986.

(b) Notwithstanding any provision of the general statutes, each member of the Municipal Employees' Retirement Fund who retires on or after January 1, 2002, shall receive a cost of living increase beginning on the first July first following such member's retirement date and on each subsequent July first. Such increase shall be not less than two and one-half per cent and not more than six per cent, based upon the following formula: Sixty per cent of the annual increase in the consumer price index for urban wage earners and clerical workers for the immediately preceding twelve-month period up to six per cent, plus seventy-five per cent of the annual increase in such index for the same period over six per cent. In the event a member who retires on or after January 1, 2002, becomes deceased, such cost of living adjustment shall be applied to the allowance of the annuitant, if any. The provisions of this subsection do not apply to members who retired under the provisions of section 7-432.

(c) Notwithstanding any provision of the general statutes, each member of the Municipal Employees' Retirement Fund who retires prior to January 1, 2002, and has not attained age sixty-five shall receive on July 1, 2002, and on July first of each subsequent year a cost of living increase equal to two and one-half per cent. In the event that a member who retires prior to January 1, 2002, becomes deceased, such cost of living increase shall be applied to the allowance of the annuitant, if any. The cost of living increase provided for in this subsection shall continue until the July first following the member's sixty-fifth birthday, at which point the formula set forth in subsection (a) of this section shall become operative. The provisions of this subsection do not apply to members who retired under the provisions of section 7-432.

Sec. 5. Subdivision (5) of section 7-425 of the general statutes is repealed and the following is substituted in lieu thereof:

(5) "Member" means any regular employee or elective officer receiving pay from a participating municipality, and any regular employee of a free public library [which] that receives part or all of its income from municipal appropriation, who has been included by such municipality in the pension plan as provided in section 7-427, but shall not include any person who customarily works less than twenty hours a week if such person entered employment after September 30, 1969, any police officer or firefighter who will attain the compulsory retirement age after less than [ten] five years of continuous service in fund B, any teacher who is eligible for membership in the state teachers retirement system, any person eligible for membership in any pension system established by or under the authority of any special act or of a charter adopted under the provisions of chapter 99, or any person holding a position funded in whole or in part by the federal government as part of any public service employment program, on-the-job training program or work experience program, provided persons holding such federally funded positions on July 1, 1978, shall not be excluded from membership but may elect to receive a refund of their accumulated contributions without interest.

Sec. 6. Section 7-428 of the general statutes is repealed and the following is substituted in lieu thereof:

Any member of fund B shall be eligible for retirement and to receive a retirement allowance upon completing twenty-five years of aggregate service in a participating municipality or upon attaining the age of fifty-five years, provided such employee has had [ten] five years of continuous service or fifteen years of active aggregate service in a participating municipality.

Sec. 7. Section 7-431 of the general statutes is repealed and the following is substituted in lieu thereof:

Any member of fund B separated from the service of the municipality by which [he] the member is employed, except for cause, after completing at least [ten] five years of continuous service but before reaching the voluntary retirement age, shall be entitled to a retirement allowance upon reaching the voluntary retirement age; provided, at the option of the member, the retirement allowance may commence on the date of such separation and be payable in such an amount as may be determined by the Retirement Commission to be the actuarial equivalent of the retirement allowance that would have been payable except for the election of such option.

Sec. 8. Subsection (a) of section 7-436b of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Any member of fund B of the municipal employees' retirement system, who, prior to [his] such member's date of employment with a municipality [which] that is participating in said fund B, served in any branch of the armed forces of the United States during the times set forth in section 27-103 shall be credited with the period of such service to the extent that [he] such member makes contributions to said fund for all or any part of the period of such service, except that any veteran who becomes a member on or after October 1, 1984, shall not receive credit for such war service if [he] such member has received or is entitled to receive any retirement allowance for the same years of service from the federal government. Such contributions shall be computed at a rate of two per cent of [his] such member's first year's salary as such employee, with interest at five per cent per annum, payable within one year of such employment, or on or before January 1, 1992, whichever is later, provided such contributions are made prior to [his] the date of retirement. The period of such service for which contributions to said fund are made shall be counted for the purpose of computing the amount of [his] such member's retirement allowance, provided such member shall have completed [ten] five years of continuous service or fifteen years of active aggregate service with a participating municipality or shall be retired prior thereto due to disability incurred in the course of [his] employment. Any member who purchases credit pursuant to this section and who later receives a retirement allowance for permanent and total disability under this part shall, upon [his] written request, be refunded all such contributions paid under this section, provided such military service credit did not serve to increase the amount of disability retirement benefits for which [he] such member was eligible.

Sec. 9. (NEW) Each participating employer may pick up the member contributions required by section 7-440 of the general statutes, for all compensation earned on and after January 1, 2002, and the contributions so picked up shall be treated as employer contributions in determining tax treatment under the United States Internal Revenue Code and the Connecticut Income Tax Code. The employer shall pay these member contributions from the same source of funds that is used to pay the member. The employer may pick up these contributions by a reduction in the cash salary of the member, or by an offset against a future salary increase, or by a combination of a reduction in salary and offset against a future salary increase. If member contributions are picked up, they shall be treated for all purposes of the Municipal Employees' Retirement Fund in the same manner and to the same extent as member contributions made prior to the date picked up. Municipalities participating in fund B may adopt this section for their members. Such election shall be made in a manner prescribed by the Retirement Commission.

Sec. 10. Section 5-264a of the general statutes is repealed and the following is substituted in lieu thereof:

(a) The state or any political subdivision of the state may, by contract, agree with any employee to defer, in whole or in part, any portion of such employee's compensation and may subsequently, with the consent of the employee, contract for, purchase or otherwise procure, for the purpose of funding a deferred compensation program for such employee, (1) an investment savings account, (2) a fixed or variable life insurance or annuity contract from any life underwriter licensed by this state who represents an insurance company licensed to contract business in this state, or (3) a beneficial interest in an investment trust established by an organization of public employers, the assets of which are managed by a not-for-profit organization registered as an investment advisor under applicable federal statutes and regulations, from an entity registered as a broker-dealer under statutes and regulations of the state governing the sale of securities, provided the employee shall be furnished prior to purchase with disclosures substantially comparable to the disclosures required under the Securities Act of 1933 and the Investment Company Act of 1940 for the sale of similar nonexempt products.

(b) The State Comptroller or the officer designated by the chief executive officer of any other political subdivision is authorized to enter into such contractual agreements with employees of the state or the political subdivision, as the case may be, on behalf of the state or the political subdivision to defer any portion of that employee's compensation.

(c) The administration of the deferred compensation program shall be under the direction of the State Comptroller or the officer designated by the particular political subdivision. Payroll deductions shall be made, in each instance, by the appropriate payroll officer. The administrator of the deferred compensation program may contract with a private corporation or institution for providing consolidated billing and other administrative services with respect thereto.

(d) For the purposes of this section: "Employee" means any person, whether appointed, or elected, including members of the General Assembly, or under contract, providing services for the state or a political subdivision, for which compensation is paid; and "investment savings account" means a savings account in a state bank and trust company, national banking association, mutual savings bank, savings and loan association or federal savings and loan association or a share account in a credit union or federal credit union established to receive the deferred compensation of a state employee under the deferred compensation plan established by the State Comptroller or the officer designated by a political subdivision pursuant to this section.

(e) Notwithstanding any other provision of law to the contrary, those persons designated to administer the deferred compensation program are hereby authorized to make (1) deposits or payments to such investment savings accounts, (2) payment of premiums for the purchase of fixed or variable life insurance or annuity contracts, or (3) payments for interests in investment trusts established by an organization of public employers and managed by a not-for-profit organization registered as an investment advisor under applicable federal statutes and regulations under the deferred compensation program. Such payments shall not be construed to be a prohibited use of the general assets of the state or the other political subdivision.

(f) The state may, by contract, agree with any employee to defer, in whole or in part, any portion of such employee's compensation and may subsequently, with the consent of the employee, contract for, purchase or otherwise procure, for the purpose of funding a deferred compensation program for such employee, shares of an investment company, registered under the Investment Company Act of 1940, which shares are registered under the Securities Act of 1933, including equity, fixed income, short-term or money market mutual funds. Notwithstanding any other provision of law to the contrary, those persons designated by the state to administer the deferred compensation program are hereby authorized to make deposits or payments to an investment company, registered under the Investment Company Act of 1940, for the purchase of shares of such investment company, which shares are registered under the Securities Act of 1933, including equity, fixed income, short-term or money market mutual funds. Such payments shall not be construed to be a prohibited use of the general assets of the state.

(g) Upon request of a political subdivision of the state, the State Comptroller shall make available to the employees of the political subdivision the deferred compensation program provided to state employees under such additional terms and conditions as the State Comptroller may prescribe.

Sec. 11. Section 7-464a of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Any city, town or other political subdivision of the state may, by contract, agree with any employee to defer, in whole or in part, any portion of such employee's compensation and may subsequently, with the consent of the employee, contract for, purchase or otherwise procure, for the purpose of funding a deferred compensation program for such employee, (1) an investment savings account, (2) a fixed or variable life insurance or annuity contract from any life underwriter licensed by this state who represents an insurance company licensed to contract business in this state, or (3) a beneficial interest in an investment trust established by an organization of public employers, the assets of which are managed by a not-for-profit organization registered as an investment advisor under applicable federal statutes and regulations, from an entity registered as a broker-dealer under statutes and regulations of the state governing the sale of securities, provided the employee shall be furnished prior to purchase with disclosures substantially comparable to the disclosures required under the Securities Act of 1933 and the Investment Company Act of 1940 for the sale of similar nonexempt products.

(b) The officer designated by the chief executive officer of any city, town or other political subdivision is authorized to enter into such contractual agreements with employees of the city, town or other political subdivision, as the case may be, on behalf of the city, town or political subdivision to defer any portion of that employee's compensation.

(c) The administration of the deferred compensation program shall be under the direction of the officer designated by the particular city, town or other political subdivision. Payroll deductions shall be made, in each instance, by the appropriate payroll officer. The administrator of the deferred compensation program may contract with a private corporation or institution for providing consolidated billing and other administrative services with respect thereto.

(d) For the purposes of this section: "Employee" means any person, whether appointed, elected or under contract, providing services for the city, town or other political subdivision, for which compensation is paid; and "investment savings account" means a savings account in a state bank and trust company, national banking association, mutual savings bank, savings and loan association or federal savings and loan association or a share account in a credit union or federal credit union established to receive the deferred compensation of a municipal employee under the deferred compensation plan established by the officer designated by a city, town or other political subdivision pursuant to this section.

(e) Notwithstanding any other provision of law to the contrary, those persons designated to administer the deferred compensation program are hereby authorized to make (1) deposits or payments to such investment savings accounts, (2) payment of premiums for the purchase of fixed or variable life insurance or annuity contracts, or (3) payments for interests in investment trusts established by an organization of public employers and managed by a not-for-profit organization registered as an investment advisor under applicable federal statutes and regulations under the deferred compensation program. Such payments shall not be construed to be a prohibited use of the general assets of the city, town or other political subdivision.

(f) Any city, town or other political subdivision of the state may, by contract, elect to participate in the deferred compensation program for state employees as authorized under subsection (g) of section 5-264a, as amended by this act. The deferred compensation funds associated with the participation by such city, town or political subdivision in the deferred compensation program for state employees may be invested in any of the funding vehicles authorized for such program under section 5-264a, as amended by this act.

Sec. 12. Subsection (a) of section 5-192f of the general statutes is repealed and the following is substituted in lieu thereof:

(a) "Year's breakpoint" means, with respect to the calendar year in which occurs a member's last severance from service date, ten thousand seven hundred dollars increased by six per cent each year after 1982, rounded to the nearest multiple of one hundred dollars. [The year's breakpoint for years prior to 2000 shall be:

1982

    $10,700

1983

    11,300

1984

    12,000

1985

    12,700

1986

    13,500

1987

    14,300

1988

    15,200

1989

    16,100

1990

    17,100

1991

    18,100

1992

    19,200

1993

    20,400

1994

    21,600

1995

    22,900

1996

    24,300

1997

    25,800

1998

    27,300

1999

    28,900]

Approved June 6, 2001