PLANNING GUIDE FOR
DEPARTMENT OF MOTOR VEHICLES EMPLOYEES
RETIRING FROM STATE SERVICE
Department of Motor Vehicles
Bureau of Administration
Human Resources, Labor Relations and Payroll Division
January, 2009
TABLE OF CONTENTS
INTRODUCTION...... 3
BRIEF OVERVIEW OF TIER I RETIREMENT……………………. 5
BRIEF OVERVIEW OF TIER II AND TIER IIA RETIREMENT…... 7
BRIEF OVERVIEW OF HAZARDOUS DUTY RETIREMENT……. 8
CONNECTICUTSTATE EMPLOYEES RETIREMENT
Survivor Benefits………………………………………………. 9
Benefit Payment Options………………………………………. 9
Examples of Options…………………………………………… 10
Vested Benefits………………………………………………… 12
Health Insurance……………………………………………….. 13
Dental Insurance……………………………………………….. 13
Health Insurance for Optionees………………………………... 14
Vacation/Sick Time Accruals and Personal Leave Days……… 14
Retirement Date………………………………………………... 14
Cost of Living Allowances (COLA’S)………………………… 15
Group Life Insurance…………………………………………... 16
Deferred Compensation………………………………………... 16
Credit Union……………………………………………………. 16
Direct Deposit………………………………………………….. 16
Pension Deductions…………………………………………….. 16
PROCEDURES FOR RETIRING
Notice of Retirement Date……………………………………... 17
Required Documents…………………………………………… 17
FREQUENTLY ASKED QUESTIONS……………………………… 19
APPENDIX A -- Summary for Non-Disability Pension Benefits, Retiree
Health Insurance and Cost of Living Allowances (COLA)
PLANNING GUIDE FOR
DEPARTMENT OF MOTOR VEHICLES EMPLOYEES
RETIRING FROM STATE SERVICE
INTRODUCTION
Making the decision to retire can be overwhelming. Being well informed should help to alleviate any anxiety you may be feeling. Try to gather as much information as possible as you consider whether or not to retire. If you have any questions or need information about planning for your retirement, the following resources may be of assistance to you when deciding your retirement options:
Refer to the applicable State Employees Retirement System (SERS) summary plan descriptions for Tier I, Tier II and Tier IIA prepared by the Office of the State Comptroller (OSC) and available on the OSC website at
Refer to “Your Personal Statement of Benefits” which is distributed to employees annually. This benefits statement provides dollar amounts of your benefit based on a normal retirement and specific to the retirement plan you are in.
Check the Retirement Division's web-site at for valuable information on medical, dental and supplemental benefits, as well as additional links for information on the State’s deferred compensation plan and to the Social Security Administration.
The Retirement Benefits Services Division of the OSCprovides retirement counseling. Effective January 1, 2009, the Retirement & Benefit Services Division no longer provides individual pre-retirement counseling sessions for SERS Tier I, Tier II and Tier IIA members. The Division provides SERS members with the opportunity to attend scheduled group counseling sessions. The information provided at these group sessions pertains to the retirement process including the benefit calculation. Therefore, any requests to attend a group session should come only from SERS members who are within six to eighteen months of the date of their retirement. Attendance at a pre-retirement counseling session is not mandatory: a member does not have to attend a session in order to be able to retire from state service. Attendance at these group sessions is by appointment only. Contact the Counseling Unit at 860-702-3490 for scheduling details.
Your financial or tax advisor can provide assistance in determining the most suitable benefit payment option and tax withholding information specific to your personal and financial situation.
The DMV Human Resources, 203.805.6268, and Payroll, 203.805.6308, Offices can assist you with the procedures, forms and necessary documents for retirement. Worksheets for calculating your own Tier I, Tier II or Hazardous Duty benefit are available on the DMV Intranet Site at by clicking on “Forms”. You only need to fill in a few areas in the form, and your benefit estimate will be calculated automatically. Human Resources and Payroll can assist you with any questions you may have on the worksheet.
Your insurance providers can address specific questions you may have about your benefits upon retirement:
Anthem Blue Cross and Blue Shield 1-800-922-2232
Anthem.com/statect
Health Net1-800-255-5019
Healthnet.com/stateofct
UnitedHealthcare (Medical)1-800-385-9055
Oxfordhealth.com/stateofct
Caremark1-800-318-2572
(prescription drug benefits, any medical plan)
Caremark.com/members/stateofct
UnitedHealthcare (Dental)1-800-896-4834
Myuhcdental.com/statect
CIGNA (Dental)1-800-244-6224
Cigna.com
**********
This booklet is intended to be a guide to the most commonly asked questions regarding retirement issues. It is neither a legal document nor a comprehensive explanation of all retirement matters. If any conflict is found between the contents of this guide and the retirement statutes or regulations, the latter are the authoritative references.
BRIEF OVERVIEW OF TIER I RETIREMENT
The complete Summary Plan Description for Tier I is available on the OSC website at Tier I primarily applies to employees hired into State service before July 2, 1984.Tier I members are eligible for a retirement pension when they reach:
Age 55 with at least 25 years of service, (normal retirement) or
Age 65 with at least 10 years of service, (normal retirement) or
Age 70 with at least 5 years of service, (age 70 retirement) or
Age 55 with at least 10 years of service, (early retirement).
The Tier I pension formula is based on a benefit percentage for each year of service, the number of years of service, and the average of the employee's three (3) highest year’s earnings.
There are three (3) different plans within the Tier I Retirement Program. They are Plan A, Plan B and Plan C. These plans are commonly referred to as defined benefit plans.
Plan A members contribute 5% of their salary and do not pay Social Security contributions. Members therefore, are not eligible to receive Social Security Benefits based on their service with the State.
Plan B members contribute 2% of their salary up to the Social Security wage maximum and 5% above the Social Security wage maximum.
Plan C members contribute 5% of their salary and pay Social Security contributions.
For Plans A, B and C the following formula is used in determining the retirement benefit at age 55 and with 25 years of service:
Two percent (.02) x Years of Service x Average Salary.
Example #1:
A retiree age 55 with 25 years of full-time service and an average salary of $50,000, using the formula for Plans A, B, and C, would receive the following retirement benefit:
.02 x 25 x $50,000 = $25,000 Annual or $2,083 Per Month.
For Plan B members, the following reduction formula is used at the age upon which full retirement age is reached under the Social Security Act, or upon receipt of a Social Security Disability Award, if earlier (assume an average salary of $50,000 with 25 years of service):
One percent (.01) x Years of Service x $4,800 Plus
Two percent (.02) x Years of Service x Average Salary over $4,800.
Example #2:
Salary $50,000
Less $ 4,800 X .01 x 25 = $ 1,200
$45,200 X .02 x 25 = 22,600
$23,800 Annual 12 = $1,983 Per Month
The Plan B reduction for a surviving spouse receiving a benefit under Tier I will take place at age 62, or upon receipt of a Social Security Disability Award, if earlier.
BRIEF OVERVIEW OF TIER II AND TIER IIA RETIREMENT
The complete Summary Plan Description for Tier II and IIA is available on the OSC website at Tier II applies to employees hired from July 2, 1984 through June 30, 1997 with no break in State service. Tier IIA applies to employees hired since July 1, 1997. (For information about plan eligibility after a break in service, please see page 21.)
The primary difference between Tier II and IIA is that II A is contributory, that is, you contribute 2% of your salary to the retirement plan.
Tier II and IIA members are eligible for a retirement pension when they reach:
Age 60 with at least 25 years of vesting service, (normal retirement) or
Age 62 with at least 10 years of vesting service, (normal retirement) or
Age 62 with at least 5 years actual State service (normal retirement) or
Age 70 with at least 5 years of vesting service, (age 70 retirement) or
Age 55 with at least 10 years of vesting service, (early retirement).
The Tier II and IIA formula is as follows:
One and one-third percent (.0133) x Average Salary Plus
One-half of one percent (.005) x Average Salary in excess of the year’s breakpoint
x years of credited service (to 35 year maximum) And
One and five-eighths Percent x Average Salary
x years of credited service over 35 years
Example #3:
A person age 62 with 10 years of full-time credited service with an average salary of $50,000 would receive the following retirement benefit:
.0133 x $50,000 = $665
Plus
.005 x $ 1,200 *= 6
$671
x 10 yrs. of credited service (to a maximum of 35)
$6,710 Annual 12 = $559 Per Month
*This amount represents the figure arrived at after deducting the 2008 breakpoint, $48,800 from the Average Salary of $50,000.
For Early Retirement, your basic normal benefit amount is reduced by one quarter of one per cent (.0025) for each month you retire prior to attaining age 60 if you have at least 25 years vesting service, or age 62 if you have at least 10 years vesting service. These reductions are required because your benefits are expected to be paid over a longer period time.
BRIEF OVERVIEW OF HAZARDOUS DUTY RETIREMENT
UNDER TIER I (PLANS A, B and C), TIER II AND TIER IIA
Motor Vehicle Inspectors, Sergeants and Lieutenants who are POST certified may retire at any age with 20 years of hazard duty service (HDS). Tier 1 hazardous duty members contribute 4% of their salary up to the Social Security wage maximum and 5% above the Social Security wage maximum; Tier II, 4%; Tier IIA, 5%. Additional information concerning hazardous duty is available on the OSC website at The formula for calculating the retirement benefit is the same for all Tier I, Tier II and Tier IIA retirement plans as follows:
Fifty percent (.50) for 20 years HDS x Average Salary Plus
Two percent (.02) x all service over 20 (including HDS and other credited service)
x Average Salary
Example #4
A hazardous duty member who retires with an average salary of $50,000 and 25 years of service would receive 50% of his/her average salary for 20 years, or $25,000, plus 10% for the additional five years, or $5,000, as follows:
.50 x $50,000 = $25,000
.02 x 5 yrs. x $50,000= 5,000
$30,000 Annual ÷ 12 = $2,500 Per Month
Tier 1, Plan A and C, Tier II and Tier IIA members would receive the above basic benefit for life.
Tier 1, Plan Bmembers would receive the above benefit until the age upon which full retirement age is reached under the Social Security Act, or upon receipt of a Social Security Disability Award, if earlier. Following is the reduction formula:
One and one-quarter percent (.0125) x HD prior to 7/1/88 (maximum 20 years) Plus
One percent (.01) x all additional service (over 20 years) prior to 7/1/88 (incl. HD and other credited service) x $4,800
Example #5
The hazardous duty member in Example #4 has 25 years of service. Five (5) of those years were prior to 7/1/88, including a combination of 3 years of hazardous duty and 2 years of other credited service. Using the reduction formula, this member’s monthly benefit would be reduced by $23 per month upon reaching the full Social Security retirement age:
.0125 x 3 yrs.=.0375
.01 x 2 yrs.=.0200
.0575 x $4,800 = $276 Annual ÷ 12 = $23 Per Month
CONNECTICUTSTATE EMPLOYEES RETIREMENT
The information on the following pages applies to all three (3) Retirement Plans, unless specified otherwise.
After you retire and begin receiving your pension, should you have a question regarding your retirement check please contact the Office of the State Comptroller, Retirement Division, 55 Elm Street, Hartford, CT 06106 at the telephone number(s) below:
Retirement Payroll Unit / 860-702-3528Email:
Retiree Health Insurance Unit / 860-702-3533
Survivor Benefits
Your spouse may receive monthly benefits if you die before retirement and while actively employed or while on an approved leave of absence, provided:
- You are eligible for normal, age 70 or early retirement
- You have 25 years of service at any age
The eligible amount is similar to the 50% Spousal Option. (Please see Benefit Payment Options Section below and on the next page.)
Benefit Payment Options
You may choose to receive your retirement income in the form best suited to your personal needs. If you elect to have your retirement benefits paid to someone else when you die, the recipient would be your "optionee". Your benefit payment option cannot be changed after retirement for any reason. If you have been married for at least one year prior to the commencement of your retirement benefits, written spousal consent will be required if you do not provide a lifetime guarantee (50% or 100% option) for that spouse - accordingly if you are married you cannot elect certain options unless your spouse executes the waiver of survivor benefits (Form CO-1047). Regardless of your option choice or marital status, you must submit proof and/or attest to your marital status within one year prior to the date your retirement benefits are to commence.The optional forms of payment available are:
Option 1 (D) - Straight Life Annuity
This option provides you with the highest monthly benefit for your lifetime. However, all payments stop at your death.
Please read carefully. If you elect Option D, at the time of your death not only do all pension payments stop, but health insurance for any dependents – including your spouse – you were covering through the State Employees Retirement System also ends. Those dependents would be offered the choice of assuming the full (100%) cost of the group health insurance for a limited period only (currently 3 years). Then all health insurance benefits available through the state would cease. Reimbursement for your dependent's Medicare Part B (normal premiums) will also end at your death.
Option 2 (A) - 50% or 100% Spousal Option
This option provides a reduced monthly benefit to you for life, but provides for continued payments to your current spouse. After your death, a percentage of that benefit, either 50% or 100%, whichever you choose, will continue for the lifetime of your current spouse. If you have been married for at least one year prior to the commencement of your retirement benefits, written spousal consent (a waiver) will be required if you do not provide a lifetime guarantee for that spouse. If you retire and have not designated in writing the benefit payment option you would prefer or have not obtained the consent of your spouse, your benefit will be paid according to your marital status when you apply for retirement benefits. Benefit options are elected when retirement forms are signed unless a spousal option had been applied for and put into effect prior to October 1, 1982.
If your current spouse dies, you will continue to receive the reduced retirement allowance. If you divorce your current spouse, s/he will still receive the benefit payable after your death. In the event of remarriage after the death or divorce of your current spouse, Option 2(A) is not transferable to your new spouse and you would continue to receive the reduced retirement allowance.
Option 3 (B) - Contingent Annuitant
This option provides for continued payments after your death to the contingent annuitant you choose who can be someone other than your spouse. The option provides a reduced monthly benefit to you for life. After your death, a percentage of that benefit, either 50% or 100%, whichever you choose, will continue for the lifetime of your annuitant. If you select this option, the state sponsored health coverage and the payment of any reimbursement of the Medicare Part B normal premiums would be extended at the time of your death to your annuitant (if your annuitant is your spouse or eligible dependent) for as long as the monthly benefit continues. After retirement, if your annuitant dies before you, you will continue to receive your reduced retirement allowance for the remainder of your lifetime with no income payments continuing after your death. After retirement, you cannot name another contingent annuitant to receive the benefits or change the percentage of reduced income.
Option 4 (C) – 10 Year or 20 Year Period Certain.
This option provides a reduced monthly benefit to you for your lifetime with payments guaranteed from your retirement date for 10 or 20 years (whichever you choose) to your contingent annuitant. If you should die within 10 years (120 payments) or 20 years (240 payments) from your date of retirement, the remaining payments will be made to your contingent annuitant(s). Because this is a period certain option, if your annuitant dies before you, you may choose a new designated annuitant (after you provide the Division with a certified copy of the death certificate). If you die before your annuitant and your annuitant dies before the expiration of the selected period, the commuted value of the remaining guaranteed payments shall be paid in one lump sum to the annuitant’s estate.
Options using retirement benefit from Example #1 on page 3:
Option Plan / Ages / AnnualBenefit / Reduced
% / Retiree
Receives $ / Spouse
Receives $
1 (D) / Straight Life / Retiree 55 / $25,000 / 0 / $25,000
Annual / 0
2 (A) / 50% Husband & Wife / Retiree 55 Spouse 52 / $25,000 / .9019 / $22,548
Annual / $11,274
Annual
3 (B) / Contingent Annuitant - 100% (50% same as 2(A) above) / Retiree 55
Spouse 52 / $25,000 / .8214 / $20,535
Annual / $20,535
Annual
4 (C) / 10 Year
20 year / Retiree 55 *
Retiree 55 * / $25,000 / .9800
.9193 / $24,500
Annual
$22,983
Annual / $24,500
Annual
$22,983 Annual
* The optionee's age is not relevant for this option.
Important items to note:
The benefit option payment you choose cannot be changed after retirement. Therefore, it is very important that you elect your “option” following careful review of your personal and financial situation as against all of the available choices.
A benefit option that continues an income to a surviving optionee reduces a retiree’s annual benefit.
If you have been married for at least one year prior to the commencement of your retirement benefits, written spousal consent will be required if you do not provide a lifetime guarantee (50% or 100% option) for that spouse. Failure to submit the required waiver and documentation prior to your effective date of retirement may result in a delay of retirement income payments.