March 23, 2004 |
2004-R-0262 | |
CONNECTICUT STATE EMPLOYEE RETIREMENT SYSTEM CREDIT FOR SERVICE WITH ANOTHER STATE | ||
By: John Moran, Associate Analyst | ||
You asked if a Connecticut state employee can receive credit in the state retirement system for employment with another state.
Connecticut statutes and collective bargaining agreements allow Connecticut state employees who have retirement credit in another state’s retirement system to purchase retirement credit in the Connecticut system based on the service with the other state, under certain requirements and limitations. For example, the credit purchase is only allowed if the state the employee previously worked for allows Connecticut state employees the same option in the event they go to work for that state.
Connecticut has the following other criteria.
1. An employee cannot base the retirement credit purchase on service time in another state for which the employee received a payout, is currently receiving regular retirement benefits, or may be used in the future for a retirement benefit (i. e. no “double dipping”).
2. The retirement purchase is limited to a maximum of 10 years credit, and the employee must work or earn two years in the Connecticut system for every year of credit purchased (e. g. after 10 years of state service, the employee would be eligible for 5 years of credit for his out-of-state service).
3. For each retirement credit year purchased, the employee must pay the equivalent of 6% of his annual starting state salary into the retirement fund (Tier II employees do not have to make such a contribution as Tier II is a non-contributory plan).
4. The employee must apply to purchase credit before retiring.
For more information on retirement credit purchases see the summary plans for Tier I, Tier II, and Tier IIA employees on the state comptroller’s web page: http: //www. osc. state. ct. us/empret/. (Tier I employees are those hired before July 1, 1984; Tier II are those hired from July 1, 1984 to June 30, 1997; Tier IIA are those hired since July 1, 1997. )
The Connecticut State Employee Retirement Commission does not maintain a list of states that have reciprocal retirement credit purchasing policies.
According to the National Association of State Retirement Administrators (NASRA) and the National Conference of State Legislatures (NCSL) states vary widely regarding purchasing service credit from another state. Many states allow it to some degree, but there is no single database on this. For example, last year Florida approved a law allowing its state employees to buy up to 10 years of credit in the Florida system based on time in another state’s system. After the one-year window closes at the end of 2004, the maximum purchase time will revert back to five years.
JM: nf