Connecticut Seal

Substitute House Bill No. 6696

Public Act No. 03-232

AN ACT CONCERNING THE REEMPLOYMENT OF RETIRED TEACHERS, THE PURCHASE OF ADDITIONAL CREDITED SERVICE IN THE TEACHERS' RETIREMENT SYSTEM, THE EXCESS EARNINGS ACCOUNT, CREDIT FOR SERVICE WITH CERTAIN BARGAINING ORGANIZATIONS, AND PAYMENT FOR ADDITIONAL CREDITED SERVICE PURCHASED BY BOARDS OF EDUCATION, AND MAKING CHANGES TO THE TEACHERS' RETIREMENT SYSTEM.

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

Section 1. Section 10-183v of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(a) Except as provided in subsection (b) of this section, a former teacher receiving retirement benefits from the system may not be employed in a teaching position receiving compensation paid out of public money appropriated for school purposes except that such former teacher may be employed temporarily in such a position and receive no more than forty-five per cent of the [entry-level salary] maximum salary level for the assigned [subject area for such compensation] position. Any former teacher who receives in excess of such amount shall reimburse the board for the amount of such excess. Temporary employment means employment for less than a school year. Notice of such employment shall be sent [monthly] semi-annually on January thirty-first and June thirtieth to the board by the employing officials and by the retired teacher at the end of each assignment.

(b) A former teacher receiving retirement benefits from the system may be reemployed by a local board of education or by any constituent unit of the state system of higher education [if such employment is authorized by the Teachers' Retirement Board upon certification to such board that such reemployment is in the best interests of the local or regional school system. Such certification shall be made by the local or regional board of education, if the employer is to be a local or regional board of education, or the Board of Governors of Higher Education, if the employer is to be a constituent unit of the state system of higher education] in a position designated by the Commissioner of Education as a subject shortage area for the school year in which the former teacher is being employed. Such employment may be for up to one full school year but may, with prior approval by the board, be extended for an additional school year. Such request for approval shall be made in writing to the Teachers' Retirement Board prior to the reemployment of such former teacher and shall include a statement indicating the type of assignment to be performed, the anticipated date of rehire and the expected duration of the assignment.

(c) The employment of a former teacher under subsection (b) of this section shall not be considered as service qualifying for continuing contract status under section 10-151 and the salary of such teacher shall be fixed at an amount at least equal to that paid other teachers in the same school system with similar training and experience for the same type of service. Upon approval by the board of such employment, such former teacher shall be eligible for the same health insurance benefits provided to active teachers employed by such school system. No benefits shall be paid under section 10-183t, as amended by this act, while such former teacher is employed by such system.

(d) No person shall be entitled to survivor's benefits under subsection (f) of section 10-183f as a result of reemployment under this section.

[(e) Retirement benefits to a former teacher reemployed under subsection (b) of this section shall terminate on the first day of the month of such reemployment. Retirement benefits shall resume on the first day of the month after reemployment ceases. ]

[(f)] (e) The same option plan of retirement benefits in effect prior to reemployment shall continue for a reemployed teacher during reemployment. [and upon subsequent retirement. ]

[(g) Any former teacher reemployed under subsection (b) of this section may elect upon completion of not less than six months continuous service to make contributions to the system from such date. The employer of such electing reemployed teacher shall thereafter treat such teacher with respect to the system in the same manner as any other member of the system except that such employer shall deduct only six-sevenths of the amount that would be deducted from the salaries of other members.

(h) Any reemployed teacher electing to make contributions to the system under subsection (g) of this section may also elect to obtain retirement credit for service during the period from the beginning of reemployment to the date of such election by contributing to the system within six months of the date on which such teacher makes such election under said subsection (g), six per cent of the salary paid such teacher during such period together with credited interest from the time such salary was paid until such contribution is made to the system.

(i) Upon the subsequent retirement of an electing reemployed teacher, the retirement benefits payable to such retired teacher shall be increased by triple the amount that would be payable based solely upon contributions of such teacher made during the period of reemployment plus credited interest thereon. ]

(f) The provisions of this section in effect on June 30, 2003, revision of 1958, revised to January 1, 2003, shall be applicable to any person making contributions to the Teachers' Retirement System on June 30, 2003, in accordance with said provisions.

Sec. 2. Subsection (c) of section 10-183e of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

(c) Additional credited service must be purchased by a member (1) [at] prior to the time of retirement, [or] (2) at the time a surviving spouse elects benefits under the provisions of subsection (d) of section 10-183h, or (3) at the time benefits commence [under an optional payment form pursuant to section 10-183j. Any purchase of service shall be accomplished by the member paying to the board an amount equal to one-half of the actuarial present value, determined according to actuarial tables adopted by the board, of the difference between the retirement benefit which the member is entitled to receive based upon his or her service apart from such purchased service and the benefit which he or she is entitled to receive including such service] as provided under sections 10-183g, as amended by this act, and 10-183jj, as amended by this act. Any purchase of such service shall be accomplished by the member paying to the board an amount determined on the basis of actuarial factors adopted by the board which reflect the present value of one-half of the full actuarial cost of the benefit increase that will be derived by the purchase of such service. Such factors shall consider the member's age at the time of purchase, actual or projected salary, and the earliest date on which the member would be eligible for a normal retirement allowance. Payments for additional credited service may be made in a lump sum by transfer of funds from the member's accumulated one per cent contributions withheld prior to July 1, 1989, with credited interest and accumulated voluntary contributions with credited interest plus such other amounts as may be required to complete the purchase.

Sec. 3. Subsection (m) of section 10-183g of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(m) If the plan actuaries have certified in accordance with subsection (n) of this section that the amount of the [excess earnings account] cost of living adjustment reserve account which is available for payment of a cost of living allowance is insufficient to fund the full amount determined under subsection (l) of this section, each person eligible for an annual cost of living allowance under said subsection (l) shall be eligible for a cost of living allowance reduced proportionately to a percentage that is actuarially supported by the amount so certified, in lieu of the cost of living allowance provided under said subsection (l), provided no cost of living allowance shall exceed six per cent and provided further, if the total return earned by the trustees on the market value of the pension assets for the preceding fiscal year is less than eight and one-half per cent, any cost of living allowance granted shall not exceed one and one-half per cent.

Sec. 4. Subsection (n) of section 10-183g of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(n) To administer cost of living allowances provided under subsections (l) and (m) of this section, there is established the [excess earnings account] cost of living adjustment reserve account which shall be a separate account established within the Teachers' Retirement Fund. For the calendar year commencing January 1, 1995, and each subsequent calendar year, the [excess earnings account] cost of living adjustment reserve account shall be credited by an amount equal to that portion of the total return earned by the trustees on the market value of the pension assets for the preceding fiscal year which is a total return in excess of eleven and one-half per cent. The [excess earnings account] cost of living adjustment reserve account shall be reduced each year by the actuarial value of any cost of living allowance awarded. On May first, annually, the plan actuaries shall determine how much of the [excess earnings account] cost of living adjustment reserve account balance is available for payment of a cost of living adjustment determined in accordance with the provisions of this section and shall certify their determination to the trustees of the Teachers' Retirement Fund. If the plan actuaries determine that there are no funds available in the [excess earnings account] cost of living adjustment reserve account for the payment of a cost of living allowance, no cost of living allowance shall be paid.

Sec. 5. Section 10-183c of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2003):

The Connecticut teachers' retirement system is established to provide retirement and other benefits for teachers, their survivors and beneficiaries. On or after a member vests in the system by becoming eligible to receive a retirement benefit pursuant to section 10-183f, or accumulates ten years of credited service in the system, as defined in subsection (a) of section 10-183e, whichever is later, the member's benefit under sections 10-183e, 10-183f, 10-183g, 10-183h and 10-183aa is contractual in nature and no public or special act of the General Assembly shall diminish such benefit, provided this section shall apply only to an active member who is vested on October 1, 2003, or to a member who vests or accumulates ten years of credited service on or after October 1, 2003, and shall apply to the member's benefit in existence on October 1, 2003, or to the member's benefit in existence on the date the member vests or accumulates ten years of credited service, respectively, whichever is later. Nothing in this section shall affect the provisions of section 10-183t, as amended by this act, or 10-183z. On or after October 1, 2003, any public or special act enhancing the benefits of the system shall be subject to the provisions of this section.

Sec. 6. Subsection (e) of section 10-183jj of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(e) For each year of additional credited service purchased pursuant to this section, the local or regional board of education shall pay an amount specified by the Teachers' Retirement Board equal to the actuarial present value, determined according to actuarial tables adopted by the Teachers' Retirement Board, of the difference between the retirement benefit which the member is entitled to receive based upon [his or her] the member's service apart from such purchased service and the benefit which [he or she] the member is entitled to receive including such service. Payment for such service may be made in equal annual installment payments, including interest, not exceeding three times the number of years being purchased. Payments shall be made in accordance with subsection (b) of section 10-183n and rules adopted by the Teachers' Retirement Board. Any late payments or outstanding obligations from a prior year's purchase or from late payment of monthly mandatory deductions shall be included as part of the cost of purchasing such service. When a board of education purchases additional credited service for a member pursuant to this section, the Teachers' Retirement Board shall notify the member in writing. Any additional credited service purchased for any such member shall be in addition to any credited service purchased pursuant to section 10-183e, as amended by this act.

Sec. 7. Section 10-183b of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

As used in this chapter, unless the context otherwise requires:

(1) "Actuarial reserve basis" means a basis under which the liabilities of the retirement system are determined under acceptable actuarial methods and under which assets are accumulated under a program designed to achieve a proper balance between the accumulated assets and the liabilities of the system.

(2) "Amortization of unfunded liabilities" means a systematic program of annual payments determined as a level per cent of expected member annual salaries in lieu of a lump sum payment.

(3) "Annual salary" means the annual salary rate for service as a Connecticut teacher during a school year but not including unused sick leave, unused vacation, terminal pay, coaching or extra duty assignments, unless compensation for coaching or extra duty assignment was included in salary for which contributions were made prior to July 1, 1971. In no event shall annual salary include amounts determined by the board to be included for the purpose of inflating the member's average annual salary. The inclusion in annual salary of amounts paid to the member, in lieu of payment by the employer for the cost of benefits, insurance, or individual retirement arrangements which in prior years had been paid by the employer and not included in the member's annual salary, shall be prima facie evidence that such amounts are included for the purpose of inflating the member's average annual salary. Annual salary shall not include payments the timing of which may be directed by the member. Annual salary shall not include payments to a superintendent pursuant to an individual contract between such superintendent and a board of education, of amounts which are not included in base salary. Annual salary shall include amounts paid to the member during a sabbatical leave during which mandatory contributions were remitted, provided such member returned to full-time teaching for at least five full years following the completion of such leave.

(4) "Average annual salary" means the average annual salary received during the three years of highest salary.

(5) "Board" means the Teachers' Retirement Board.

(6) "Child" means a natural child, an adopted child, or a stepchild of a deceased member who has been a stepchild for at least one year immediately prior to the date on which the member died. A child is a "dependent child" of a deceased member if at the time of the member's death (A) the member was living with the child or providing or obligated to provide, by agreement or court order, a reasonable portion of the support of the child, and (B) the child (i) is unmarried and has not attained age eighteen, or (ii) is disabled and such disability began prior to the child attaining age eighteen.

(7) "Contributions" mean amounts withheld pursuant to this chapter and paid to the board by an employer from compensation payable to a member. ["Mandatory contributions"] Prior to July 1, 1989, "mandatory contributions" are contributions required to be withheld under this chapter and consist of five per cent regular contributions and "one per cent contributions". From July 1, 1989, to June 30, 1992, "mandatory contributions" are contributions required to be withheld under this chapter and consist of five per cent regular contributions and one per cent health contributions. From July 1, 1992, to June 30, 2004, "mandatory contributions" are contributions required to be withheld under this chapter and consist of ["six per cent contributions" and "one per cent contributions"] six per cent "regular contributions" and one per cent health contributions. On or after July 1, 2004, "mandatory contributions" are contributions required to be withheld under this chapter and consist of six per cent regular contributions and one and one-fourth per cent health contributions. "Voluntary contributions" are contributions by a member authorized to be withheld under section 10-183i.

(8) "Credited interest" means interest at the rate from time to time fixed by the board which shall be substantially that earned by the funds of the system. Such interest shall be applied to a member's account based on the balance as of the previous June thirtieth. Credited interest shall be assessed on any mandatory contributions which were due but not remitted prior to the close of the school year for which salary was paid.

(9) "Current service" means service rendered in the current fiscal year.

(10) "Dependent former spouse" means a former spouse of a deceased member who (A) has in his or her care a dependent child of the deceased member; and (B) was receiving, or was entitled to receive, from the deceased member at the time of the death of the deceased member, at least one-half of his or her support; and (C) has not remarried; and (D) is the parent of the child or adopted the child while married to the member and before the child attained age eighteen or, while married to the member, both of them adopted the child before the child attained age eighteen.

(11) "Dependent parent" means a parent of a deceased member who (A) has reached the age of sixty-five; and (B) has not married after the death of the member; and (C) was receiving at least one-half of his or her support from the member at the time of the member's death and files proof of such support within two years of the date of the member's death; and (D) is not receiving, or entitled to a federal or state old age benefit based on the parent's own earnings, equal to or greater than the amount the parent would be entitled to as a dependent parent under this chapter. A "parent of a deceased member" is [(A)] (i) the mother or father of a deceased member; or [(B)] (ii) a stepparent of a deceased member by a marriage entered into before the member attained age sixteen; or [(C)] (iii) an adopting parent of a deceased member who adopted the deceased member before the member attained age sixteen.

(12) "Designated beneficiary" means a person designated on a form prescribed by the board by a member to receive amounts which become payable under this chapter as the result of the member's death whether before or after retirement. If a designated beneficiary is not living at the time of the death of a member, the amounts that would have been payable to the designated beneficiary shall be paid to the member's estate.

(13) "Disabled" means inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration, except that during the first twenty-four months that a member is receiving a disability allowance, "disabled" means the inability to perform the usual duties of his occupation by reason of any such impairment.

(14) "Employer" means an elected school committee, a board of education, the State Board of Education, the board of governors or any of its constituent units, the governing body of the Children's Center, the E. O. Smith School and any other activity, institution or school employing members.

(15) "Formal leave of absence" means any absence from active service in the public schools of Connecticut formally granted by a member's employer as evidenced by contemporary records of the employer, provided in the case of an absence due to illness, medical or other evidence of such illness may, at the discretion of the Teachers' Retirement Board, be accepted in lieu of evidence of the formal granting of a leave.

(16) "Formal application of retirement" means the member's application, birth certificate or notarized statement supported by other evidence satisfactory to the board, in lieu thereof, records of service when required by the board to determine a salary rate or years of creditable service, statement of payment plan and, in the case of an application for a disability benefit, a physician's statement of health.

(17) "Funding" means the accumulation of assets in advance of the payment of retirement allowances in accordance with a definite actuarial program.

(18) "Member" means any Connecticut teacher employed for an average of at least one-half of each school day, except that no teacher who under any provision of the general statutes elects not to participate in the system shall be a member unless and until the teacher elects to participate in the system. Members teaching in a nonpublic school classified as a public school by the board under the provisions of this section may continue as members as long as they continue as teachers in such school even if the school ceases to be so classified. A former teacher who has not withdrawn his or her accumulated contributions shall be an "inactive member". A member who, during the period of a formal leave of absence granted by his or her employer, but not exceeding an aggregate of ten school months, continues to make mandatory contributions to the board, retains his or her status as an active member.

(19) "Normal cost" means the amount of contribution which the state is required to make into the retirement fund in order to meet the actuarial cost of current service.

(20) "Public school" means any day school conducted within or without this state under the orders and superintendence of a duly elected school committee, a board of education, the State Board of Education, the board of governors or any of its constituent units, the E. O. Smith School, the Children's Center, joint activities of boards of education authorized by subsection (b) of section 10-158a and any institution supported by the state at which teachers are employed or any incorporated secondary school not under the orders and superintendence of a duly elected school committee or board of education but located in a town not maintaining a high school and providing free tuition to pupils of the town in which it is located, and which has been approved by the State Board of Education under the provisions of part II of chapter 164, provided that such institution or such secondary school is classified as a public school by the retirement board.

(21) "Retirement allowance" means payments for life derived from member contributions, including credited interest, and contributions from the state.

(22) "School year" means the twelve months ending on June thirtieth of each year.

(23) "Surviving spouse" means a widow or widower of a deceased member who (A) was living with the member at the time of the member's death, or receiving, or entitled by court order or agreement to receive, regular support payments from the member, and (B) has not remarried.

(24) "Survivors" means a surviving spouse, a dependent former spouse, a dependent child and a dependent parent.

(25) "System" means the Connecticut teachers' retirement system.

(26) "Teacher" means [(1)] (A) any teacher, permanent substitute teacher, principal, assistant principal, supervisor, assistant superintendent or superintendent employed by the public schools in a professional capacity while possessing a certificate or permit issued by the State Board of Education, provided on and after July 1, 1975, such certificate shall be for the position in which the person is then employed, [(2)] (B) certified personnel who provide health and welfare services for children in nonprofit schools, as provided in section 10-217a, under an oral or written agreement, [(3)] (C) any person who is engaged in teaching or supervising schools for adults if the annual salary paid for such service is equal to or greater than the minimum salary paid for a regular, full-time teaching position in the day schools in the town where such service is rendered, and [(4)] (D) a member of the professional staff of the State Board of Education or of the Board of Governors of Higher Education or any of its constituent units. A "permanent substitute teacher" is one who serves as such for at least ten months during any school year.

(27) "Unfunded liability" means the actuarially determined value of the liability for service before the date of the actuarial valuation less the accumulated assets in the retirement fund.

Sec. 8. Section 10-183g of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(a) The normal retirement benefit shall be two per cent times the number of years of full-time credited service and a proportional fraction of two per cent times the number of years of credited service at less than full-time multiplied by average annual salary. In no event, however, shall such benefit exceed seventy-five per cent of such salary or the limits mandated by Section 415 of the Internal Revenue Code, or be less than three thousand six hundred dollars.

(b) The proratable retirement benefit shall be computed as follows: Average annual salary multiplied by (1) number of years of credited service, excluding all additional credited service, except service described in subdivisions (3), (8) and (10) of subsection (b) of section 10-183e, multiplied by the applicable percentage based on age and service as determined from the table below, and (2) number of years of all additional credited service not used in subdivision (1) of this subsection multiplied by one per cent.

 

TABLE

 

AGE OF RETIREMENT

 

Years Of

 
 

Connecticut

 

Service

60

61

62

63

64

65

66

67

68

69

70

 

10

1. 0

1. 0

1. 0

1. 0

1. 0

1. 0

1. 0

1. 0

1. 0

1. 0

1. 0

 

11

1. 1

1. 1

1. 1

1. 1

1. 1

1. 1

1. 1

1. 1

1. 1

1. 1

1. 1

 

12

1. 2

1. 2

1. 2

1. 2

1. 2

1. 2

1. 2

1. 2

1. 2

1. 2

1. 2

 

13

1. 3

1. 3

1. 3

1. 3

1. 3

1. 3

1. 3

1. 3

1. 3

1. 3

1. 3

 

14

1. 4

1. 4

1. 4

1. 4

1. 4

1. 4

1. 4

1. 4

1. 4

1. 4

1. 4

 

15

1. 5

1. 5

1. 5

1. 5

1. 5

1. 5

1. 5

1. 5

1. 5

1. 5

1. 5

 

16

1. 6

1. 6

1. 6

1. 6

1. 6

1. 6

1. 6

1. 6

1. 6

1. 6

1. 6

 

17

1. 7

1. 7

1. 7

1. 7

1. 7

1. 7

1. 7

1. 7

1. 7

1. 7

1. 7

 

18

1. 8

1. 8

1. 8

1. 8

1. 8

1. 8

1. 8

1. 8

1. 8

1. 8

1. 8

 

19

1. 9

1. 9

1. 9

1. 9

1. 9

1. 9

1. 9

1. 9

1. 9

1. 9

1. 9

 

20

2. 0

2. 0

2. 0

2. 0

2. 0

2. 0

2. 0

2. 0

2. 0

2. 0

2. 0

(c) The early retirement benefit shall be computed in the same manner as the normal retirement benefit, then actuarially reduced, on the basis of early retirement tables adopted from time to time by the board, for each month early retirement precedes the minimum age at which the member could have retired with a normal retirement benefit. Such minimum age shall be such member's actual age at retirement plus the lesser of (1) the difference between such age and age sixty, or (2) the difference between thirty-five years and the sum of such member's years of Connecticut public school service plus all purchased leaves of absence, military and out-of-state public school service. On and after July 1, 1999, any revisions to the early retirement tables shall be submitted to the Office of Policy and Management and the joint standing committee of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies within one month of their adoption by the board. Any such revisions shall be accompanied by an actuarial certification of the costs associated with such revisions.

(d) The deferred vested retirement benefit shall be computed as follows: Average annual salary multiplied by (1) number of years of credited service, excluding all additional credited service, except service described in subdivisions (3), (8) and (10) of subsection (b) of section 10-183e, multiplied by two per cent, then actuarially reduced in the same manner as the early retirement benefit if the years of service which could have been rendered were less than twenty years by age sixty or by the subsequent date of retirement, and (2) number of years of all additional credited service not used in subdivision (1) of this subsection multiplied by one per cent.

(e) Repealed by P. A. 79-541, S. 5, 6.

(f) In addition to a retirement benefit computed under subsections (a) to (d), inclusive, of this section and under subsections (a) to (g), inclusive, of section 10-183aa, a member shall receive a lump sum payment equal to the member's accumulated one per cent contributions withheld prior to July 1, 1989, with credited interest. In lieu of such lump sum, the member may elect to receive an actuarially equivalent annuity for life. Such lump sum or annuity shall be paid, or commenced to be paid, when the first payment of the other retirement benefit is made.

(g) A member's complete formal application for retirement, if sent by mail, shall be deemed to have been filed with the board on the date such application is postmarked. No benefit computed under subsections (a) to (d), inclusive, of this section and under subsections (a) to (g), inclusive, of section 10-183aa shall become effective until the end of the calendar month of the filing by the member with the board of a complete formal application for retirement. Such benefit shall accrue from the first day of the month following such calendar month and payment of such benefit in equal monthly installments shall commence on the last day of the month in which such benefit begins to accrue. Upon a finding that extenuating circumstances relating to the health of a member caused a delay in the filing of the member's complete formal application, and such application is filed on or after July 1, 1986, the board may deem such application to have been filed up to three months earlier than the actual date of the filing. Upon a finding that extenuating circumstances related to the health of a member caused a delay in the filing of an election pursuant to subsection (g) of section 10-183aa, and such election is filed on or after July 1, 1986, the board may deem such election to have been filed as of the date such member's benefits would otherwise have been converted to a normal retirement allowance, provided such member's disability allowance became effective on or before November 1, 1976, and such member attained the age of sixty on or after August 1, 1984.

(h) A benefit computed under subsections (a) to (d), inclusive, of this section and under subsections (a) to (g), inclusive, of section 10-183aa shall continue until the death of the [retired] member. If twenty-five per cent of the aggregate benefits paid to a [retired] member prior to death are less than such member's accumulated [five per cent] regular contributions, including any one per cent contributions withheld prior to July 1, 1989, and any voluntary contributions plus credited interest, the member's designated beneficiary shall be paid on the death of the member a lump sum amount equal to the difference between such aggregate payments and such accumulated contributions plus credited interest that had been accrued to the date benefits commenced.

(i) In lieu of a benefit computed under subsections (a) to (d), inclusive, of this section and under subsections (a) to (g), inclusive, of section 10-183aa, a member may elect one of the options described in section 10-183j or any other actuarially equivalent option which the board may offer from time to time.

(j) Beginning the first day of January or July which follows nine months in retirement, a retired member who retired prior to September 1, 1992, or a member's successor beneficiary, except a person receiving survivor's benefits, shall be eligible for an annual five per cent cost of living allowance on any benefit except a benefit based upon such member's one per cent contributions or voluntary contributions. Such cost of living allowance shall be computed on the basis of the retirement benefits to which such retired member or successor beneficiary was entitled on the last day of the preceding December or June except benefits based upon one per cent or voluntary contributions. Such member's successor beneficiary means any person, other than such member, receiving benefits as the result of the election of a period certain option or a coparticipant option, including an election for such an option by a surviving spouse under subsection (d) of section 10-183h. The right to such allowance, or any portion thereof, may be waived by the person entitled thereto at any time. Any waiver shall remain in effect until the first day of the month following such person's death or the filing with the board of a written notice of cancellation of the waiver. Any allowance waived shall be forever forfeited. If on any subsequent first day of January or July the Teacher's Retirement Board determines that the National Consumer Price Index for urban wage earners and clerical workers for the twelve-month period ending on the last day of the preceding November or May has increased less than the cost of living allowance provided under this subsection, the cost of living allowance provided by this subsection shall be adjusted to reflect the change in such index provided such cost of living allowance shall not be less than three per cent.

(k) Beginning the first day of January or July which follows nine months in retirement, a retired member who retired on or after September 1, 1992, or a member's successor beneficiary, except a person receiving survivor's benefits, shall be eligible for an annual cost of living allowance calculated in accordance with the provisions of subsections (l) or (m) of this section on any benefit except a benefit based upon such member's one per cent contributions or voluntary contributions. Such cost of living allowance shall be computed on the basis of the retirement benefits to which such retired member or successor beneficiary was entitled on the last day of the preceding December or June except benefits based upon one per cent or voluntary contributions. Such member's successor beneficiary means any person, other than such member, receiving benefits as the result of the election of a period certain option or a coparticipant option, including an election for such an option by a surviving spouse under subsection (d) of section 10-183h. The right to such allowance, or any portion thereof, may be waived by the person entitled thereto at any time. Any waiver shall remain in effect until the first day of the month following such person's death or the filing with the board of a written notice of cancellation of the waiver. Any allowance waived shall be forever forfeited.

(l) Beginning the first day of January or July which follows nine months in retirement, a retired member who retired on or after September 1, 1992, or a member's successor beneficiary, except a person receiving survivor's benefits, shall be eligible for an annual cost of living allowance for each year in which the plan actuaries have certified under the provisions of subsection (n) of this section that sufficient funds are available. The cost of living allowance shall be calculated by using the percentage cost of living adjustment granted by the Social Security Administration for the applicable year, computed on the basis of the retirement benefits to which such retired member or successor beneficiary was entitled on the last day of the preceding December or June except benefits based upon one per cent or voluntary contributions, provided no cost of living allowance shall exceed six per cent and provided further, if the total return earned by the trustees on the market value of the pension assets for the preceding fiscal year is less than eight and one-half per cent, any cost of living allowance granted shall not exceed one and one-half per cent.

(m) If the plan actuaries have certified in accordance with subsection (n) of this section that the amount of the excess earnings account which is available for payment of a cost of living allowance is insufficient to fund the full amount determined under subsection (l) of this section, each person eligible for an annual cost of living allowance under said subsection (l) shall be eligible for a cost of living allowance reduced proportionately to a percentage that is actuarially supported by the amount so certified, in lieu of the cost of living allowance provided under said subsection (l), provided no cost of living allowance shall exceed six per cent and provided further, if the total return earned by the trustees on the market value of the pension assets for the preceding fiscal year is less than eight and one-half per cent, any cost of living allowance granted shall not exceed one and one-half per cent.

(n) To administer cost of living allowances provided under subsections (l) and (m) of this section, there is established the excess earnings account which shall be a separate account established within the Teachers' Retirement Fund. For the calendar year commencing January 1, 1995, and each subsequent calendar year, the excess earnings account shall be credited by an amount equal to that portion of the total return earned by the trustees on the market value of the pension assets for the preceding fiscal year which is a total return in excess of eleven and one-half per cent. The excess earnings account shall be reduced each year by the actuarial value of any cost of living allowance awarded. On May first, annually, the plan actuaries shall determine how much of the excess earnings account balance is available for payment of a cost of living adjustment determined in accordance with the provisions of this section and shall certify their determination to the trustees of the Teachers' Retirement Fund. If the plan actuaries determine that there are no funds available in the excess earnings account for the payment of a cost of living allowance, no cost of living allowance shall be paid.

(o) On January 1, 1988, each eligible retired member who had rendered at least twenty-five years of full-time service prior to normal retirement under the provisions of subsection (a) of section 10-183f, or such member's successor beneficiary, as defined in subsection (j) of this section, shall receive a single increase in retirement benefits provided under this chapter. Such increase shall be paid to such eligible members or successor beneficiaries whose monthly benefit as of December 31, 1987, before any reduction for an optional benefit payment plan, is less than eight hundred dollars, and shall be sufficient to increase such monthly benefit to eight hundred dollars.

(p) On January 1, 1991, each eligible retired member who had rendered at least twenty-five years of full-time service at least twenty years of which were service in the public schools of Connecticut prior to early retirement before January 1, 1976, under the provisions of subsection (c) of section 10-183f, or such member's successor beneficiary, as defined in subsection (j) of this section, shall receive a single increase in retirement benefits provided under this chapter. Such increase shall be paid to such eligible members or successor beneficiaries whose monthly benefit as of December 31, 1990, before any reduction for an optional benefit payment plan, is less than eight hundred dollars, and shall be sufficient to increase such monthly benefit to eight hundred dollars.

(q) On January 1, 1999, each eligible retired member who had rendered at least twenty-five years of full-time service, or such member's successor beneficiary, as defined in subsection (j) of this section, shall receive a single increase in benefits provided under this chapter. Such increase shall be sufficient to increase the monthly benefit of such eligible members or successor beneficiaries, whose monthly benefit as of December 31, 1998, before any actuarial reduction for early retirement or for an optional benefit payment plan, is less than twelve hundred dollars and shall be sufficient to increase such monthly benefit to twelve hundred dollars.

Sec. 9. Section 10-183k of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(a) A member who terminates prior to retirement shall be entitled to have refunded his or her accumulated voluntary contributions with credited interest.

(b) A member who terminates with less than five years' credited service shall be entitled to have refunded his or her accumulated [five per cent] regular contributions with credited interest. A member who terminates with more than five years of credited service shall be entitled to have refunded his or her accumulated [five per cent] regular contributions with credited interest and his or her accumulated one per cent contributions withheld prior to July 1, 1989.

(c) A member who terminates with more than ten years' credited service in the public schools of Connecticut but prior to retirement may elect to receive in lieu of the benefits provided by this chapter a refund of his or her accumulated [mandatory] contributions with credited interest as provided in subsection (b) of this section. If such member elects a refund, all credited service shall be cancelled and any rights to benefits provided by this chapter shall be extinguished, except as provided in subsection (d) of this section. If such member does not elect a refund, but dies before age sixty or before receiving the deferred vested benefit, if later, such member's accumulated voluntary contributions, accumulated [five per cent] regular contributions and accumulated one per cent contributions withheld prior to July 1, 1989, together with credited interest shall be paid to such member's designated beneficiary.

(d) A member who receives a refund and returns to service shall be regarded as a new member unless such member repays the amount refunded, other than voluntary contributions and the interest thereon, together with credited interest compounded from the date interest was last credited to such member's account to the date of repayment. The credited service accumulated before termination and any unrefunded one per cent contributions withheld prior to July 1, 1989, and credited interest shall be restored to a member who makes such repayment. Restored contributions and interest shall be credited with credited interest for the period between the last day for which interest was credited on such contributions and such member's return to service.

Sec. 10. Section 10-183n of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2004):

(a) Each employer shall: (1) Before employing a teacher notify such teacher of the provisions of this chapter applicable to such teacher; (2) distribute, post or otherwise disseminate in a timely manner, to teachers in its employ, any notices, bulletins, newsletters, annual statements of account and other information supplied by the board for the purpose of properly notifying teachers of their rights and obligations under the system; (3) furnish to the board at times designated by said board such reports and information as the board deems necessary or desirable for the proper administration of the system; and (4) deduct each month seven and one-fourth per cent of one-tenth of such teacher's annual salary rate as directed by said board and any additional voluntary deductions as authorized by such teacher, except that no deductions shall be made from any amounts received by regularly employed teachers for special teaching assignments rendered for the State Board of Education or the Board of Governors of Higher Education unless the salary for such special teaching assignment is equal to or greater than the minimum salary paid for such teacher's regular teaching assignment.

(b) Each local treasurer or other person having custody of amounts deducted under this chapter by an employer shall transmit and report such amounts to the board so that they are received by said board no later than the fifth business day of the following month. On and after July 1, 2001, all such amounts shall be transmitted via electronic transfer of funds. Such amounts shall at all times be the property of the system and while in the custody of such local treasurer or other person such person is a fiduciary with respect to such amounts and shall discharge his responsibilities solely for the benefit of the system. Said board shall be entitled to receive from an employer interest at the rate of nine per cent per year from the due date on all amounts deducted by such employer and not received by said board by the fifth business day of the following month. Interest at the rate of nine per cent per year shall be compounded annually on the interest assessed from the date payment is received to the date the interest assessment is paid. Such interest shall be treated as an amount earned by assets of the system.

(c) All amounts received by the board under this section shall be forwarded to the State Treasurer.

(d) Each member shall file with the board an enrollment and such other forms, documents and information as the board deems necessary or desirable for the proper administration of the system.

Sec. 11. Subsections (a) to (c), inclusive, of section 10-183t of the general statutes are repealed and the following is substituted in lieu thereof (Effective July 1, 2005):

(a) The board shall offer one or more health benefit plans to any member receiving retirement benefits or a disability allowance from the system, to the spouse or surviving spouse of such member, and to a disabled dependent of such member if there is no spouse or surviving spouse, provided such member, spouse or surviving spouse, or disabled dependent is eligible for Medicare Part A hospital insurance. The board may offer one or more basic plans, the cost of which to any such member, to the spouse or surviving spouse of such member and to a disabled dependent of such member if there is no spouse or surviving spouse, shall be [twenty-five per cent] one-third of the basic plan's premium equivalent, and one or more optional plans, provided such member, spouse, surviving spouse or disabled dependent shall pay [twenty-five per cent] one-third of the basic plan's premium equivalent plus the difference in cost between any such basic plans and any such optional plans. The board shall designate those plans which are basic and those plans which are optional for the purpose of determining such cost and the amount to be charged or withheld from benefit payments for such plans. The surviving spouse of a member, or a disabled dependent of a member if there is no surviving spouse, shall not be ineligible for participation in any such plan solely because such surviving spouse or such disabled dependent is not receiving benefits from the system. With respect to any person participating in any such plan, the state shall appropriate to the board [twenty-five per cent] one-third of the cost of such basic plan or plans, or [twenty-five per cent] one-third of the cost of the rate in effect during the fiscal year ending June 30, 1998, whichever is greater.

(b) Any member who is receiving retirement benefits or a disability allowance from the system, the spouse or surviving spouse of such member, or a disabled dependent of such member if there is no spouse or surviving spouse, and who is not participating in Medicare Part A hospital insurance, may fully participate in any or all group health insurance plans maintained for active teachers by such member's last employing board of education, or by the state in the case of a member who was employed by the state, upon payment to such board of education or to the state, as applicable, by such member, spouse or surviving spouse, or disabled dependent, of the premium charged for his form of coverage. Such premium shall be no greater than that charged for the same form of coverage for active teachers. The surviving spouse or disabled dependent shall not be ineligible for participation in any such plan solely because such surviving spouse or disabled dependent is not receiving benefits from the system. No person shall be ineligible for participation in such plans for failure to enroll in such plans at the time the member's retirement benefit or disability allowance became effective. Nothing in this subsection shall be construed to impair or alter the provisions of any collective bargaining agreement relating to the payment by a board of education of group health insurance premiums on behalf of any member receiving benefits from the system. Prior to the cancellation of coverage for any member, spouse or surviving spouse for failure to pay the required premiums or cost due, the board of education or the state, if applicable, shall notify the Teachers' Retirement Board of its intention to cancel such coverage at least thirty days prior to the date of cancellation. Absent any contractual provisions to the contrary, the payments made pursuant to subsection (c) of this section shall be first applied to any cost borne by the member, spouse or surviving spouse participating in any such plan. As used in this subsection, "last employing board of education" means the board of education with which such member filed his initial application for retirement, and "health insurance plans" means hospital, medical, major medical, dental, prescription drug or auditory benefit plans that are available to active teachers.

(c) On and after July 1, 2000, the board shall pay a subsidy equal to the subsidy paid in the fiscal year ending June 30, 2000, to the board of education or to the state, if applicable, on behalf of any member who is receiving retirement benefits or a disability allowance from the system, or the spouse, or the surviving spouse of such member, or a disabled dependent of such member if there is no spouse or surviving spouse, who is participating in a health insurance plan maintained by a board of education or by the state, if applicable. Such payment shall not exceed the actual cost of such insurance. With respect to any person participating in any such plan pursuant to subsection (b) of this section, the state shall appropriate to the board [twenty-five per cent] one-third of the cost of the subsidy. No payment to a board of education pursuant to this subsection may be used to reduce the amount of any premium payment on behalf of any such member, spouse or surviving spouse, or disabled dependent, made by such board pursuant to any agreement in effect on July 1, 1990.

Sec. 12. Subsection (d) of section 10-183t of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(d) The Treasurer shall establish a separate retired teachers' health insurance premium account within the Teachers' Retirement Fund. Commencing July 1, 1989, and annually thereafter all [one per cent] health contributions withheld under this chapter in excess of five hundred thousand dollars shall, upon deposit in the Teachers' Retirement Fund, be credited to such account. Interest derived from the investment of funds in the account shall be credited to the account. Funds in the account shall be used for payments to boards of education pursuant to subsection (c) of this section and for payment of premiums on behalf of members or surviving spouses of members participating in one or more health insurance plans pursuant to subsection (a) of this section in an amount equal to the difference between the amount paid pursuant to said subsection (a) and the amount paid pursuant to subsection (c) of this section. If, during any fiscal year, there are insufficient funds in the account for the purposes of all such payments, the General Assembly shall appropriate sufficient funds to the account for such purpose.

Sec. 13. Section 10-183v of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2004):

(a) Except as provided in subsection (b) of this section, a former teacher receiving retirement benefits from the system may not be employed in a teaching position receiving compensation paid out of public money appropriated for school purposes except that such former teacher may be employed temporarily in such a position and receive no more than forty-five per cent of the entry-level salary for the assigned subject area for such compensation. Temporary employment means employment for less than a school year. Notice of such employment shall be sent monthly to the board by the employing officials and by the retired teacher at the end of each assignment.

(b) A former teacher receiving retirement benefits from the system may be reemployed by a local board of education or by any constituent unit of the state system of higher education if such employment is authorized by the Teachers' Retirement Board upon certification to such board that such reemployment is in the best interests of the local or regional school system. Such certification shall be made by the local or regional board of education, if the employer is to be a local or regional board of education, or the Board of Governors of Higher Education, if the employer is to be a constituent unit of the state system of higher education.

(c) The employment of a former teacher under subsection (b) of this section shall not be considered as service qualifying for continuing contract status under section 10-151 and the salary of such teacher shall be fixed at an amount at least equal to that paid other teachers in the same school system with similar training and experience for the same type of service.

(d) No person shall be entitled to survivor's benefits under subsection (f) of section 10-183f as a result of reemployment under this section.

(e) Retirement benefits to a former teacher reemployed under subsection (b) of this section shall terminate on the first day of the month of such reemployment. Retirement benefits shall resume on the first day of the month after reemployment ceases.

(f) The same option plan of retirement benefits in effect prior to reemployment shall continue for a reemployed teacher during reemployment and upon subsequent retirement.

(g) Any former teacher reemployed under subsection (b) of this section may elect upon completion of not less than six months continuous service to make contributions to the system from such date. The employer of such electing reemployed teacher shall thereafter treat such teacher with respect to the system in the same manner as any other member of the system except that such employer shall deduct only [six-sevenths] twenty-four twenty-ninths of the amount that would be deducted from the salaries of other members.

(h) Any reemployed teacher electing to make contributions to the system under subsection (g) of this section may also elect to obtain retirement credit for service during the period from the beginning of reemployment to the date of such election by contributing to the system within six months of the date on which such teacher makes such election under said subsection (g), six per cent of the salary paid such teacher during such period together with credited interest from the time such salary was paid until such contribution is made to the system.

(i) Upon the subsequent retirement of an electing reemployed teacher, the retirement benefits payable to such retired teacher shall be increased by triple the amount that would be payable based solely upon contributions of such teacher made during the period of reemployment plus credited interest thereon.

Sec. 14. Subsection (g) of section 10-183e of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(g) Any member who has been elected to a full-time or part-time position in an organization which has been duly designated as the teachers' representative or who has been elected to a full-time or part-time position in [the] a state-wide, national or international bargaining organization [with which the local bargaining organization is affiliated, under the provisions of section 10-153b,] may, during the time [he] such member so serves, continue [his] membership and may make, or have made for [him] such member, payments of [his] contributions for such time, provided the organization which such [teacher] member represents shall pay the full actuarial cost that would otherwise be incurred by the state for the time such [teacher] member serves in excess of one year. If payment is made during such periods or at any time before retirement, such member shall receive credit for such service and shall be considered as serving as a public school teacher in the state for the purpose of computing length of service, and for the purpose of computing average annual salary, and shall be considered by the retirement board as though [he] such member were remaining in [his] such member's latest teaching position.

Approved July 9, 2003