§ 10-183z — Funding of system on actuarial reserve basis. Use of funds.

Connecticut § 10-183z

• Jurisdiction: Connecticut
• Title 10: Education and Culture
• Ch. 167a: Teachers' Retirement System

Text

(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. 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. On and after the effective date of this section, no public or special act of the General Assembly shall reduce such appropriation to an amount below such amount certified unless the Governor declares an emergency or the existence of extraordinary circumstances, in which the provisions of section 4-85 are invoked, and at least three-fifths of the members of each chamber of the General Assembly vote to reduce such appropriation during the biennium for which the emergency or existence of extraordinary circumstances is declared. The amount appropriated by the General Assembly shall be deposited by the Treasurer into the retirement fund in quarterly allotments on July fifteenth, October first, January first and April first. (b) The board shall determine on an actuarial basis (1) a normal rate of contribution which the state shall be required to make into the retirement fund in order to meet the actuarial cost of current service and (2) the unfunded past service liability. In making such determination the board shall assume that the annual rate of interest earned by the funds of the system invested by the State Treasurer pursuant to section 10-183m equals the total assumed rate of return adopted by the board under the provisions of section 10-183nn . For the first eight years, the funding program for the actuarial reserve basis shall consist of the following percentages of the sum of normal cost and the amount required for a forty-year amortization of unfunded liabilities, provided, if in any such year the amount required to be paid by this section is less than the amount which would be required to fund the system on a terminal basis and to pay the annual cost of benefits payable under subsection (j) of section 10-183g or under other prior legislative adjustments to retirement benefits, the state shall pay the greater amount: FISCAL YEAR BEGINNING PERCENTAGE TO BE PAID OF NORMAL COST PLUS FULL FORTY-YEAR AMORTIZATION FROM THE BEGINNING OF SUCH FISCAL YEAR 7-1-85 65 7-1-86 70 7-1-87 75 7-1-88 80 7-1-89 85 7-1-90 90 7-1-91 95 7-1-92 100 Commencing with the fiscal year ending June 30, 1993, and through the fiscal year ending June 30, 2019, the unfunded liability shall be amortized over a period of forty years. Commencing with the fiscal year ending June 30, 2020, the unfunded liability as of June 30, 2018, shall be separately amortized over a closed period of thirty years and future actuarial gains and losses shall be amortized over separate closed periods of twenty-five years, beginning the year each separate base is established. The phrase “fund the system on a terminal basis” means contribution by the state of such moneys as are certified by the Teachers' Retirement Board as necessary, according to the mortality table adopted yearly, for the full reserve for pensions for retiring teachers provided under sections 10-183f , 10-183j and 10-183aa , but not such moneys as are necessary to make payments under subsection (j) of section 10-183g or under other prior legislative amendments to retirement benefits. (c) No act liberalizing the benefits of the retirement system shall be enacted by the General Assembly until the assembly has requested and received from the retirement board a certification of the unfunded liability created by such change and the cost of such change under the actuarial funding basis adopted by section 10-183b . Any unfunded liability created by such change shall be amortized over a period consistent with actuarial recommendations approved by the retirement board. (d) The funds of the teachers' retirement system, except the expense fund, shall not be reduced or used for other than the purposes of said system.

Legislative History

(P.A. 79-436, S. 3, 5, 6; P.A. 80-273, S. 1, 2; P.A. 85-594, S. 2, 4; 85-613, S. 22, 154; P.A. 89-333, S. 1, 2; P.A. 92-205, S. 9, 12; May Sp. Sess. P.A. 92-14, S. 1, 11; June Sp. Sess. P.A. 17-2, S. 559; P.A. 19-117, S. 88.) History: P.A. 80-273 amended Subsec. (b) to include with amount required to fund system on terminal basis, the annual cost of benefits payable under Sec. 10-183g(j) or other legislative adjustments in comparison with yearly required payments and to define “fund the system on a terminal basis”; P.A. 85-594 amended Subsec. (a) to change date for certification to the general assembly from February first to December first; amended schedule of state payments in Subsec. (b) by replacing 14-year schedule with 8-year schedule and amended Subsec. (b) to change the fiscal year for commencement of 40-year amortization of unfunded liabilities from July 1, 1994, to July 1, 1992; P.A. 85-613 made technical changes; P.A. 89-333 amended Subsec. (b) to require board to assume and 8.5% annual interest rate earned by invested funds of the system in determining funding requirements of the system and made technical change; P.A. 92-205 amended Subsec. (b) to replace requirement that board assume annual rate of interest earned by invested system funds equals 8.5% with requirement that rate earned equals total assumed rate of return adopted by board under Sec. 10-183nn, effective February 1, 1996; May Sp. Sess. P.A. 92-14 changed effective date of P.A. 92-205 but did not affect the date applicable to this section; June Sp. Sess. P.A. 17-2 amended Subsec. (a) by adding provision re fiscal year ending June 30, 2020, and each fiscal year thereafter, board to assume 6 per cent regular contributions in making actuarial determination, effective October 31, 2017; P.A. 19-117 amended Subsec. (a) to delete provision re contribution assumptions for fiscal year ending June 30, 2020, and each fiscal year thereafter, and to add provisions re restrictions on reduction of appropriations to retirement fund, timing of deposits into fund, amended Subsec. (b) to replace “beginning July 1, 1992” with “ending June 30, 1993, and through the fiscal year ending June 30, 2019” and amortization of unfunded liability and future actuarial gains and losses, amended Subsec. (c) to delete “and this section using full normal cost plus thirty-year amortization” and replace provision re thirty-year amortization period with provision re period consistent with actuarial recommendations approved by the retirement board, and made technical changes, effective on the date the Treasurer certifies, pursuant to section 10-183vv, that the amount on deposit in the Connecticut Teachers' Retirement Fund Bonds Special Capital Reserve Fund equals or exceeds the required minimum capital reserve, as defined in said section.