OLR Bill Analysis

SB 905

AN ACT CONCERNING TECHNICAL CHANGES TO THE CALCULATION OF COST OF LIVING ALLOWANCES FOR MEMBERS OF THE TEACHERS' RETIREMENT SYSTEM.

SUMMARY:

This bill corrects a typographical error in a provision of a 2007 act dealing with promised annual pension cost of living adjustments (COLAs) for Teachers' Retirement System members who join the system on or after July 1, 2007.

The bill applies percentage COLAs for such members after they retire to the basic retirement benefits they received on the last day of the preceding December or June and excludes from the COLA calculation any benefits based on one percent or voluntary contributions (see BACKGROUND). This matches the COLA calculation for all other members. Current law would result in a higher COLA for these newer members by including some of their voluntary contributions in their COLA base.

EFFECTIVE DATE: Upon passage

BACKGROUND

One Percent or Voluntary Contributions

One percent or voluntary contributions are additional pre-tax or after-tax contributions a member chooses to make to the Teacher's Retirement Fund. Such contributions receive credited interest and, at the member's option, may be paid out in a lump sum, rolled over to or from an IRA according to Teachers' Retirement Board rules, or paid as an extra annuity after retirement.

COMMITTEE ACTION

Finance, Revenue and Bonding Committee

Joint Favorable