You asked (1) for a legislative history of recent proposed constitutional amendments to require the state to fully fund the Teachers' Retirement System (TRS) and (2) whether the state is obliged to maintain retirement benefits for teachers who are retired.

The Office of Legislative Research is not authorized to give legal opinions and this report should not be considered one.

SUMMARY

Three resolutions have been introduced in the last two General Assembly sessions to amend the state constitution to make TRS a contract, bar benefit reductions, require full actuarial funding, and keep system assets separate and reserved for exclusive use of members, retirees, and beneficiaries. The resolutions have been sent to the Appropriations and Government Administration and Elections (GAE) committees. The committees held public hearings, but took no further action.

The state's obligation to maintain teacher retirement benefits is unclear. TRS and its benefits are created and defined in state statutes, but the state constitution makes no reference to it. As the state's law-making body, the General Assembly can change the statutes. If the teachers' retirement benefits are entirely dependent on the statutes, which they appear to be, then they can be changed at any time. Because the state has never attempted to reduce benefits for retired teachers, the courts have not addressed its authority to do so. Therefore, we are cannot determine whether the state is obliged to maintain benefits for retired teachers.

PROPOSED CONSTITUTIONAL AMENDMENTS

In the past two General Assembly sessions, three proposed amendments to the state constitution concerning TRS have been introduced, one in 2001 (SJR 18) and two in 2002 (SJR 19 and HJR 19). The resolutions, which are identical, would amend the state constitution to:

1. make TRS membership a contract and prohibit members' accrued benefits from any impairment or diminution;

2. require TRS to be funded according to generally accepted actuarial standards;

3. require the General Assembly to appropriate amounts the Teachers' Retirement Board determines to be actuarially sound and necessary;

4. bar the state from reducing, terminating, diverting, or encumbering TRS assets; and

5. require that the assets be kept separate and reserved exclusively for TRS members, retirees, and beneficiaries.

The 2001 resolution was referred to the Appropriations Committee, which held a subject matter hearing on it on March 8, 2001 and took no further action.

In 2002, SJR 19 was referred to the Appropriations Committee and HJR 19 was referred to the GAE Committee. Both committees held public hearings, GAE on March 1 and Appropriations on March 15, 2002. Like the 2001 resolution, both 2002 resolutions died in committee.

MAINTAINING RETIREMENT BENEFITS

Benefits for retired teachers are set out in the Connecticut General Statutes and are not subject to collective bargaining. As of the date of this report, the state has never sought to reduce or eliminate benefits for teachers after their retirement. Consequently, it is impossible to determine definitively the state's legal obligation to maintain retirement benefits at the current level or predict the outcome of a court challenge to any reduction.

The case of Pineman v. Oechslin (195 Conn. 405 (1985)) provides some guidance on the question. In that case, the Connecticut Supreme Court held that retirement benefits granted by statute alone are not guaranteed, as they would be under a collective bargaining agreement or other contract. The Pineman case, which was brought prior to state employee collective bargaining, concerned an adverse legislative change in statutory benefits for state employees who had not yet retired.

The decision stated that, although the legislature may authorize a contract on behalf of the state, because the effect of doing so "is to surrender [its] governmental power of revision and to restrict the legislative authority of succeeding legislatures, a legislative intent to create contractual rights will not be assumed unless the statutory language expressing such intent is clear and unambiguous" (Id. at 411 (citing Indiana ex rel. Anderson v. Brand, 303 U. S. 95, 110 (1938) (Black, J. dissenting)). The surrender of the legislature's power of amendment and revision "should not occur by legislative inadvertence or judicial implication," the court said (Id. at 415 (citing Cohn, "Public Employee Retirement Plans - The Nature of the Employees' Rights," 1968 U. Ill. L. F. 32, 48 (1968)).

In Pineman, since there was no express legislative intent to create a contract, the State Employees' Retirement Act did not constitute one. The court refused to find that the law implied a contract, holding that the legislature would have created an express contract if it wanted to be so bound. Similarly, the Teachers' Retirement Act contains no language creating an express contract, and a court might not be willing to find an implied one.

The Pineman court did rule, however, that retirees have statutory rights to their retirement benefits once they satisfy the eligibility requirements of the State Employees' Retirement Act by retiring. But as the General Assembly can change statutory rights at any time, these rights do not appear to guarantee that the benefits offered on a teacher's retirement date would be permanent.

If the General Assembly were to reduce teacher retirement benefits in the future, the issue would likely be litigated. As this precise issue has not come before Connecticut courts in the past, the outcome of such litigation is unknowable.

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