Sec. 10-183z. Funding of system on actuarial reserve basis. Use of funds. - Connecticut Statutes

      Sec. 10-183z. Funding of system on actuarial reserve basis. Use of funds. (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.

      (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 7-1-8565 7-1-8670 7-1-8775 7-1-8880 7-1-8985 7-1-9090 7-1-9195 7-1-92100  

Commencing with the fiscal year beginning July 1, 1992, the unfunded liability shall be amortized over a period of forty years. 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 and this section using full normal cost plus thirty-year amortization. Any unfunded liability created by such change shall be amortized over a period of thirty years.

      (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.

      (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.)

      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.