Sec. 5-156a. Funding of retirement system on actuarial reserve basis.
Sec. 5-156a. Funding of retirement system on actuarial reserve basis. (a) The
state employees retirement system shall be funded on an actuarial reserve basis. The
Retirement Commission shall, on or before December first, annually certify to the General Assembly the amount necessary on the basis of an actuarial determination to gradually establish and subsequently maintain the retirement fund on such determined actuarial reserve basis, and make such other recommendations with regard to such fund and
its administration as the commission deems appropriate. The Retirement Commission
shall, at least once every two years, prepare a valuation of the assets and liabilities of
the system. On the basis of each such valuation, it shall redetermine the normal rate of
contribution and, until it is amortized, the unfunded past service liability. The General
Assembly shall review the commission's recommendations and certification and shall
appropriate to the retirement fund the amount certified by the Retirement Commission
as necessary provided said certification is in compliance with this section at the time of
certification, and the amount so certified shall not be reduced or used for other than the
purposes of this section.
(b) The Retirement Commission 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. For the first sixteen 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:
Fiscal Year
Beginning
Percentage to be paid of normal cost
plus full 40-year amortization
from the beginning of such fiscal year
7-1-7130
7-1-7235
7-1-7340
7-1-7445
7-1-7545
7-1-7650
7-1-7755
7-1-7860
7-1-7965
7-1-8070
7-1-8175
7-1-8280
7-1-8385
7-1-8490
7-1-8595
7-1-86100
7-1-87100
7-1-88100
provided said state payments shall not be reduced or diverted to any purpose other than
the payment into the retirement fund until the foregoing schedule of payments has been
completed and said fund is determined to be actuarially sound.
(c) Transfer of appropriated amounts from the General Fund to the retirement fund
shall be made in equal monthly payments during the fiscal year.
(d) No act liberalizing the benefits of the plan shall be enacted by the General Assembly until the assembly has requested and received from the Retirement Commission
a certification of the cost of such change under the actuarial funding basis adopted by
section 5-154 and this section using full normal cost plus forty-year amortization.
(e) There shall be a valuation of the assets and liabilities of the system as of December 31, 1983, June 30, 1985, and June 30, 1986. The valuation of the assets and liabilities
of the system as of December 31, 1983, shall reflect, to the greatest extent possible, any
transfers made pursuant to section 5-158h and any service credits purchased by the date
of the valuation.
(f) The same actuarial cost method and assumptions as were employed in determining the certification for the fiscal year beginning July 1, 1982, shall be utilized for the
annual Retirement Commission certification of the amount necessary to fund the system
prior to the December 31, 1983, valuation, but shall reflect the increases in percentage
indicated in subsection (b) of this section. The certification resulting from the December
31, 1982, valuation shall not estimate or otherwise reflect the effect of any contractual
changes to the retirement system approved by the General Assembly on June 30, 1982,
and effective on October 1, 1982.
(g) For any appropriation based on an actuarial valuation undertaken on or after
December 31, 1983, the Retirement Commission shall separately indicate the actuarial
cost of current service for the members of tier II. Such current service cost for tier II
members shall be one hundred per cent funded. All other funding shall be in accordance
with the provisions of subsections (a) and (b) of this section.
(1971, P.A. 666, S. 2; 1972, P.A. 71, S. 2; P.A. 75-581, S. 4, 6; P.A. 76-233, S. 1, 2; P.A. 77-390, S. 5, 8; P.A. 78-367,
S. 1, 3; P.A. 83-533, S. 4, 54; P.A. 85-422, S. 1, 2.)
History: 1972 act added "applicable special funds" to Subsec. (c); P.A. 75-581 changed timetable in Subsec. (b) regarding
funding on actuarial reserve basis from 15 to 16 years; P.A. 76-233 forbade diverting or reducing funds pledged to establishing retirement fund on actuarial reserve basis; P.A. 77-390 deleted reference to applicable special funds in Subsec. (c);
P.A. 78-367 amended Subsec. (a) to require valuation of assets and liabilities of system every two years rather than every
three years as previously; P.A. 83-533 added Subsecs. (e), (f) and (g) concerning annual valuation of the system; P.A. 85-422 amended Subsec. (a) to change date for certification to general assembly of amount necessary to maintain fund on an
actuarial reserve basis from March first to December first and amended Subsec. (e) to change dates for valuation of assets
and liabilities of system from "December 31, 1983 and annually thereafter until December 31, 1986" to "December 31,
1983, June 30, 1985, and June 30, 1986".