December 7, 2000 |
2000-R-1110 | |
50-STATE SURVEY OF CERTAIN TEACHER RETIREMENT PLAN PROVISIONS | ||
By: Judith Lohman, Chief Analyst | ||
You asked for a 50-state survey of the following provisions of state retirement plans for teachers: (1) vesting service requirements; (2) purchasing credit for teaching service in another state; and (3) the minimum age and service requirements for receiving a normal, unreduced retirement benefit.
When an employee covered by a pension plan has worked long enough to qualify for retirement benefits from the plan, he “vests” in the plan. Of the 51 state teacher retirement plans surveyed for this report, 15, including Connecticut, require teachers to have at least 10 years of service to vest; two require between five and 10 years; 26 require five years; and eight require less than five years.
Nearly all the plans allow members to purchase credit for out-of-state teaching service, but most impose limits on such purchases. Among the most common are limits on the number of years of out-of-state service a member can purchase, requiring members to have a minimum number of years of service in the state plan before he can purchase other service, and limiting purchases to service for which the member will receive no other pension. Connecticut's teacher retirement system limits purchases in all three ways.
Most plans specify minimum age and service requirements before a teacher is eligible to receive a full (“normal”) retirement pension. Twenty-six states, including Connecticut, allow members to retire with a full pension at any age if they have a minimum number of years of credited service (the most common minimum is 30 years). Some states allow a member to retire with full benefits if his age and years of service added together equals or exceeds a specified number, such as 80.
The table below shows the requested information for each state, including Connecticut. Information comes from a National Education Association survey of the characteristics of 100 large public pension plans, published in September 2000, supplemented by information from state retirement system websites.
VESTING, OUT-OF-STATE SERVICE, AND NORMAL RETIREMENT AGE AND SERVICE REQUIREMENTS IN STATE TEACHER RETIREMENT PLANS
STATE |
VESTING |
OUT-OF-STATE SERVICE PURCHASES |
NORMAL RETIREMENT AGE AND SERVICE |
Alabama |
10 years |
Maximum 10 years. Must be an active member of Alabama system with at least 10 years credited service in Alabama. Out-of-state service must have been previously credited under another public retirement plan but must not qualify member for any benefits from any other plan, except Social Security. |
60/10 Any/25 |
Alaska |
8 years |
Maximum 10 years or 10 years out-of-state and military credit combined. |
Tier I (hired 7/1/55 –6/30/90) – 55/8; Any/20 Tier II (hired 7/1/90 or after) – 60/8; Any/20 |
Arkansas |
5 years |
Unlimited |
60/5 Any/28 |
Arizona |
Partial vesting – 5 years Full vesting – 10 years |
No limit if performed under another US public retirement plan and not receiving or eligible to receive benefits based on that service. |
65/5 62/10 Age + years of credited service = 80 |
California |
5 years |
Maximum - 10 years |
60/5 |
Colorado |
5 years |
Members may purchase service credit for any public- or private-sector employment in the United States and its territories provided the employment is verifiable and is not vested in another pension plan (excluding Social Security). Some restrictions apply to new members since January 1, 1999. |
50/30 55/Age+ service = 80 60/20 65/5 |
Connecticut |
10 years |
Limit – 10 years at the rate of one year of out-of-state service for each two years of Ct. service |
60/20 Any/35 |
Delaware |
5 years |
Maximum – 4 years |
62/5 60/15 Any/30 |
Florida |
6 years |
Maximum – 5 years. Members may purchase one year of out-of-state service for each year of Florida public school service, if they have at least 6 years of Florida service. |
62/10 Any/30 |
Georgia |
10 years |
Members may purchase one year of out-of-state service for each year of Georgia public school service. Limit – 10 years |
60/10 Any/30 |
Hawaii (employees hired after 6/30/84 and covered by Social Security) |
10 years |
None |
62/10 55/30 |
Idaho |
5 years |
Allowed (no additional details available) |
65/5 Age + service = 90 |
Illinois |
5 years |
Maximum – 40% of Illinois service or 10 years, whichever is less |
62/5 60/10 55/35 |
Indiana |
10 years |
Members hired before 7/1/81 - Maximum 8 years of credit at the rate of one year of out-of-state service for each 4 years Indiana service. Members hired on or after 7/1/81 - No limit. In either case, member must have at least 10 years of Indiana service credit to purchase out-of- state service. |
65/10 60/15 Age + service = 85 |
Iowa |
4 years or age 55 |
No limit |
65/Any 62/20 Age+ service= 88 |
Kansas |
10 years |
No limit |
65/Any 62/10 Age+ service=85 |
Kentucky |
5 years |
Limit – 10 years at the rate of one year of out-of-state service for each two years of Kentucky service. |
55/5 Any/27 |
Louisiana |
10 years |
Limit – 5 years Member must have at least 10 years of Louisiana service. |
60/10 Any/20 |
Maine |
10 years |
Limit - 10 years Member must have at least 20 years of Maine service. |
62/10 |
Maryland |
5 years |
Limit – 10 years |
60/Any Any/30 |
Massachusetts |
10 years |
Limit – 10 years or total amount of Massachusetts service, whichever is less |
65/10 |
Michigan |
10 years |
Limit – 15 years |
60/10 Any/30 |
Minnesota |
3 years |
Yes, but purchase option is scheduled to expire on 5/16/02 |
65/3 62/30 |
Mississippi |
4 years |
Limit - 5 years Members must have at least four years of Mississippi service. |
60/4 Any/25 |
Missouri |
5 years |
Limit – 10 years |
60/5 Any/30 Age + service = 80 |
Montana |
5 years |
Limit – 5 years Member must have at least at least five years of Montana service. |
60/5 Any/25 |
Nebraska |
5 years |
Limit – 10 years |
65/5 Age 55 to 64 – Age + service = 85 |
Nevada |
5 years |
Limit – 5 years Member must be vested |
65/5 60/10 Any/30 |
New Hampshire |
10 years |
Unlimited for teachers hired after 6/30/90 |
60/Any |
New Jersey |
10 years |
Limit – 10 years |
60/Any |
New Mexico |
5 years |
Limit – 5 years |
65/5 Any/25 Age + service=75 |
New York |
5 years |
Allowed only for Tier I members (those joining before 7/1/73) |
Tiers 3 and 4: 62/5 55/30 |
North Carolina |
5 years |
Unlimited at the rate of one year of out-of-state service for every two years of N.C service. Members joining after 6/30/81, must have five years of N.C. service. |
65/5 60/25 Any/30 |
North Dakota |
3 years |
Unlimited if member is not eligible for pension for service from other state |
65/3 Age + service = 85 |
Ohio |
5 years |
One year for each year of Ohio service |
65/5 Any/30 |
Oklahoma |
10 years |
Limit – 5 years |
62/10 Age + service = 90 |
Oregon |
5 years |
Limit – 4 years, if member ineligible to receive pension benefits based on the service |
58/Any Any/30 |
Pennsylvania |
10 years |
Limit – Amount equal to Pa. service or 12 years, whichever is less |
62/1 60/30 Any/35 |
Rhode Island |
10 years |
Limit – 5 years Member must be vested. |
60/10 |
South Carolina |
5 years |
Unlimited if the service would be covered in S.C. and the member is not eligible for any pension for the service |
65/Any Any/30 |
South Dakota |
3 years |
Unlimited if the member is not eligible for any pension for the service |
65/3 60/25 55/30 |
Tennessee |
5 years |
One year for each year of Tennessee service |
60/5 Any/30 |
Texas |
5 years |
Limit – 10 years or number of years of Texas service, whichever is less |
65/5 Age + service = 80 |
Utah |
4 years |
One year for each year of Utah service |
65/4 Any/30 |
Vermont |
5 years |
Limit – 10 years |
62/5 Any/30 |
Virginia |
5 years |
Unlimited for vested members |
65/5 50/30 |
Washington Plan 1 (member before 10/1/77) |
5 years |
One year for each year of Washington service. Limit – 4 years Member must not be eligible for pension benefits from other retirement system for the service. |
Any/30 60/5 55/25 |
Washington Plan 2 (member since 10/1/77) |
5 years |
Unlimited but may be used only to qualify for retirement. Does not affect benefits. |
65/5 |
West Virginia |
5 years |
Limit – 10 years at the rate of one year of out-of-state service for two years of W. Va. service |
60/5 55/30 Any/35 |
Wisconsin |
Immediate |
One year for each year of Wisconsin service Limit – 10 years |
65/Any 57/30 |
Wyoming |
4 years |
Limit – 5 years Member must be vested. |
60/4 Age + service = 85 |
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