May 2, 2007 |
2007-R-0350 | |
TEACHERS' RETIREMENT SYSTEM SERVICE CREDIT PURCHASES | ||
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By: Judith Lohman, Chief Analyst | ||
You asked for (1) an explanation of the Teachers' Retirement System (TRS) service purchase requirements, (2) a list of types of service currently approved for credit purchases, (3) whether a request for permission to purchase teaching service under the Manpower Development Training Act (MDTA) is similar to any service currently authorized for purchase, and (4) if there is any way to determine how many people would qualify to purchase MDTA service.
TRS SERVICE PURCHASE REQUIREMENTS
The law allows TRS members to purchase credit in the TRS for specified kinds of non-TRS service. A member can generally purchase one year of service credit for each year of TRS service, but not more than 10 years in total, provided the member is not going to receive any other government pension or Social Security benefits for the service purchased.
A TRS member must pay 50% of the present-value actuarial cost of the service. The actuarial cost is the increase in the member's retirement benefit attributable to the additional service. The amount a member must pay for purchased service is determined by the Teachers' Retirement Board and must be based on the member's age at the time of purchase, his or her actual or projected salary, and the earliest date the member would be eligible to retire. A member may make service purchases (1) before retiring, (2) before a surviving spouse chooses benefits, or (3) when benefits begin.
SERVICE CREDIT APPROVED FOR PURCHASE
The following types of employment currently qualify for purchased TRS credit:
• Teaching in a U. S. Defense Department school for military dependents
• Out-of-state public school teaching at the rate of one year of out-of-state service for each two years of Connecticut service
• Wartime U. S. military service
• Up to 30 months of peacetime U. S. military service
• Full-time, permanent state service
• Teaching service at UConn prior to July 1, 1965
• Teaching service before September 1, 1949 at the Wheeler School and Library, North Stonington
• Teaching service before September 1, 1948 at the Gilbert Home, Winsted
• Up to one year of service for any board of education-authorized leave of absence for each five years of active Connecticut teaching service, provided the member returns to service for at least one year after the leave
• Teaching service at the American School for the Deaf, the Connecticut Institute for the Blind, or the Newington Children's Hospital
• 40 or more days of service as a substitute teacher, or equivalent service rendered less than half-time, in a single Connecticut public school system in any one year
• Service as a full-time, salaried, elected state or local official during or after 1978, provided the member returns to teaching for at least one year afterwards
• Up to two years of service in Connecticut public schools as a member of the federal Teacher Corps
• Service in the U. S. Peace Corps
• Connecticut public school service as a social work assistant between January 1, 1969 and December 31, 1986, if the member subsequently became certified as a school social worker and remained in service in a public school after being certified
• Service in the U. S. Volunteers in Service to America (VISTA) program
MANPOWER DEVELOPMENT TRAINING ACT (MDTA) SERVICE
The MDTA was a federal job training law passed in 1962. It was intended to give youth who were not successful in regular school short, job-specific training. Services were provided outside of schools, usually by community-based organizations. The MDTA programs were later consolidated into the Comprehensive Employment and Training Act (CETA) of 1973 and then reorganized into the Job Training Partnership Act of 1981.
Teaching in an MDTA program would appear to be somewhat similar to service as a VISTA volunteer, in that it was not done in a school setting. However, without a more detailed description of the type and circumstances of the work performed, it is not possible to compare it very exactly to any of the existing types of authorized service. Likewise, it is impossible to determine how many TRS members would qualify for or would actually purchase such service if it were authorized since the Teachers' Retirement Board does not collect data on the number of TRS members who have this service.
The fiscal note for the PA 06-190, which added VISTA service to the authorized service purchases, states, “on average, the unfunded liability of the TRS will increase $ 7,000 for each year of additional service credit. ”
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