(a)(1) 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.
(2) Notwithstanding the provisions of subdivision (1) of this subsection, the Retirement Commission shall not finalize any valuation prepared pursuant to said subdivision, or certify the amount necessary to maintain the retirement fund on an actuarial reserve basis pursuant to said subdivision, until such valuation and certification account for any funds deemed to be appropriated to the State Employees Retirement Fund pursuant to subsection (c) of section 4-30a.
(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:
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; June Sp. Sess. P.A. 21-2, S. 10.)
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”; June Sp. Sess. P.A. 21-2 amended Subsec. (a) to designate existing provisions as Subdiv. (1) and add Subdiv. (2) re delay of valuation and certification pursuant to Subdiv. (1) until valuation and certification account for any funds deemed appropriated pursuant to Sec. 4-30a(c), effective July 1, 2021.