Connecticut Seal

General Assembly

 

Raised Bill No. 5430

February Session, 2018

 

LCO No. 1363

 

*01363_______FIN*

Referred to Committee on FINANCE, REVENUE AND BONDING

 

Introduced by:

 

(FIN)

 

AN ACT CONCERNING TEACHERS' RETIREMENT SYSTEM CONTRIBUTIONS.

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

Section 1. Subdivision (7) of section 10-183b of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(7) "Contributions" means amounts withheld pursuant to this chapter and paid to the board by an employer from compensation payable to a member. [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 "regular contributions" and one per cent health contributions.] From July 1, 2004, to December 31, 2017, "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. [On and after] From January 1, 2018, to June 30, 2018, "mandatory contributions" are contributions required to be withheld under this chapter and consist of seven per cent "regular contributions" and one and one-fourth per cent health contributions. On and after July 1, 2018, "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.

Sec. 2. Subsection (a) of section 10-183z of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The retirement system for teachers shall be funded on an actuarial reserve basis. The retirement board shall, on or before December first, annually, certify to the General Assembly the amount necessary, on the basis of an actuarial determination to establish and maintain the retirement fund on such determined actuarial reserve basis and make such other recommendations with regard to the fund and its administration as the board deems necessary. [For the fiscal year ending June 30, 2020, and each fiscal year thereafter, the retirement board shall, in making such actuarial determination, assume that the amount of the contributions required to be withheld under this chapter is six per cent "regular contributions" instead of seven per cent "regular contributions".] On the basis of each evaluation, the retirement board shall redetermine the normal rate of contribution and, until it is amortized, the unfunded past service liability. The General Assembly shall review the board's recommendations and certification and shall appropriate to the retirement fund the amount certified by the retirement board as necessary provided said certification is in compliance with this section.

Sec. 3. (Effective from passage) Notwithstanding subsections (a) and (b) of section 10-183z of the general statutes, as amended by this act, the Teachers' Retirement Board shall, on or before June 1, 2018, (1) request a revised actuarial valuation for the fiscal year ending June 30, 2019, based on the mandatory contribution percentage for the fiscal year ending June 30, 2019, required under subdivision (7) of section 10-183b of the general statutes, as amended by this act, and (2) certify to the General Assembly for said fiscal year the amount necessary, based on such revised actuarial valuation, to maintain the Teachers' Retirement Fund on an actuarial reserve basis.

This act shall take effect as follows and shall amend the following sections:

Section 1

from passage

10-183b(7)

Sec. 2

from passage

10-183z(a)

Sec. 3

from passage

New section

Statement of Purpose:

To reduce the rate of members' regular contributions to the teachers' retirement system from seven per cent to six per cent and require a corresponding revised actuarial valuation.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]