Higher Education and Employment Advancement Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-241

Title:

AN ACT ALLOWING ADJUNCT FACULTY MEMBERS OF THE REGIONAL COMMUNITY-TECHNICAL COLLEGE SYSTEM TO WAIVE MEMBERSHIP IN A STATE RETIREMENT PLAN.

Vote Date:

3/13/2012

Vote Action:

Joint Favorable Change of Reference to Labor and Public Employees

PH Date:

3/8/2012

File No.:

SPONSORS OF BILL:

Higher Education and Employment Advancement Committee on behalf of Rep. Bill Aman, 14th District

REASONS FOR BILL:

To allow part-time employees of the Community College system to opt out of the State employee retirement plan, thereby enabling them to make tax deductible contributions to an IRA within federal Internal Revenue parameters.

RESPONSE FROM ADMINISTRATION/AGENCY:

Kevin Lembo, CT State Comptroller: Submitted written testimony in support stating that part-time adjunct faculty in the State University System can waive participation in the State retirement program, but those in the Community College System cannot. Inability to opt out of the retirement program can create adverse tax consequences for those who contribute to other retirement savings programs. He said that this bill would alleviate these problems.

NATURE AND SOURCES OF SUPPORT:

Rep. Bill Aman, 14th District: Testified and submitted written testimony in support stating that under IRS rules anyone participating in a retirement plan is not allowed to make tax deductible contributions to an IRA. He explained that many adjunct faculty are sole proprietors who pay into a tax deductible IRA to fund their retirement. Unfortunately Community College employees are mandated to participate in the State retirement program. The State College System does not have such a requirement.

The effect of this mandated participation is that those who are primarily sole proprietors do not make sufficient income from their part-time position to offset what they lose in taxes. He stressed that these small business owners are often the best instructors for the job retraining that is critical at this time. Unless these employees can opt out of the retirement plan many will be unable to continue their employment in the system.

Elton B. Harvey III, Esq., Adjunct Professor, Manchester Community College: Submitted written testimony in support stating that as an attorney in private practice he funds his retirement with deposits to an IRA account. Along with his law practice, he works part-time making less than $2,000 per year as adjunct faculty at Manchester and Naugatuck Valley Community Colleges. As such, he is subject to the present collective bargaining agreement for CT State employees and required to participate in the State's retirement program.

Under the IRS code, his IRA contribution is disallowed because of his membership in the State's retirement plan. Enactment of this bill would allow him to opt out of the State's retirement plan so he can continue to teach part-time and fund his retirement.

NATURE AND SOURCES OF OPPOSITION:

None expressed.

Reported by: Jeanne Reed, Assistant Clerk

Date: March 15, 2012

 

Jeanie B. Phillips, Clerk