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The Connecticut State Employees Retirement System (SERS) is exempt, under United States Code, Title 29, Section 1003, from the federal requirements of the Employee Retirement Income Security Act (ERISA) and the Retirement Equity Act because it is a governmental retirement plan. The exemption means that a member may be able to take certain actions with regard to the member’s retirement benefits without any notice or consent from the member’s spouse in the absence of an appropriate court order.
Connecticut courts execute the division of SERS retirement benefits for purposes of equitable distribution under the terms of a Plan Approved Domestic Relations Order (PADRO). There are several unique prerequisites that must be met before SERS can approve any PADRO or an amendment to an approved PADRO. No PADRO can alter SERS’ benefit structure.
SERS is a defined benefit plan funded by Connecticut on an actuarial basis. This means that no individual contributions are assigned to an employee’s account. Separate accounts are not maintained for a member and an alternate payee, nor are state contributions available to the employee or to an alternate payee for distribution. Learn more by reading our FAQs below.
Connecticut Retirement Systems QDRO Checklist
Connecticut State Retirement Systems Website
A. Tier I covers most state employees hired on or before July 1, 1984; Tier II covers state employees hired from July 2, 1984 through June 30, 1997; Tier IIA covers those hired after July 1, 1997.
A. A PADRO contains two distinct pension distribution periods: the first is the distribution period, which happens when the member is still alive, and the second is the survivor option, which happens upon the death of the participant.
A. Unlike ERISA plans, the rights of the SERS participant’s spouse -the alternate payee- are entirely derived from the participant’s rights. To that end, the participant’s spouse may not elect beneficiaries or choose benefits. for example.
A. Any substantive changes to the benefit structure are outside the jurisdiction of the courts.
A. No, SERS does not offer advice. When the SERS Retirement Services Division approves a PADRO, it simply determines whether it meets the requirements under the Internal Revenue Code and the plan. The Retirement Services Division cannot be involved in any negotiations between the parties as to the division of retirement plan benefits, nor determine whether the terms are “fair” to the parties. The Division reviews draft PADROS to determine if they can be administered.
A. A PADRO can divide a SERS account between a member and an alternate payee in three basic ways: a dollar amount method, the straight percentage method, and a service factor percentage method. In the dollar amount method, SERS is directed to pay a set monthly amount to the alternate payee upon the retirement of the member, such as $300 of the member’s gross monthly payment. In the straight percentage method, SERS is directed to pay benefits to the alternate payee under a formula such as 25% of the gross monthly benefit payable at the date of distribution (that is – at retirement) to the member. Date of distribution means date of actual retirement to SERS for purposes of benefit calculation. Service factor percentage method can be used only with regard to hazardous duty employees and only because of the special retirement rules and benefits associated with hazardous duty retirements.
In the dollar amount method, SERS is directed to pay a set monthly amount to the alternate payee upon the retirement of the member, such as $300 of the member’s gross monthly payment. In the straight percentage method, SERS is directed to pay benefits to the alternate payee under a formula such as 25% of the gross monthly benefit payable at the date of distribution (that is – at retirement) to the member. Date of distribution means date of actual retirement to SERS for purposes of benefit calculation. Service factor percentage method can be used only with regard to hazardous duty employees and only because of the special retirement rules and benefits associated with hazardous duty retirements.
1. Option A – Spousal (Joint and Survivor). Option A provides a reduced monthly benefit to the member for life. After his or her death, a percentage of that benefit (50%) continues for the lifetime of the annuitant. This option cannot be chosen as part of a PADRO (which deals with divorced spouses) but if a 50% payment option is desired, the Member can choose Option B: 50% Survivor. 2. Option B - 50% or 100% Survivor. Option B continues payments after the member’s death to a contingent annuitant. The contingent annuitant can be any person, including a former spouse. The option provides a reduced monthly benefit to the member for life. After the member’s death, a percentage of that benefit, either 50% or 100%, whichever is chosen, will continue for the lifetime of the contingent annuitant. 3. Option C - 10 Year or 20 Year Period Certain. Option C provides a reduced monthly benefit to the member for his/her lifetime with payments guaranteed from the retirement date for 10 or 20 years (whatever is chosen). If the member should die within 10 years (120 payments) or 20 years (240 payments) from the date of retirement, the remaining payments will be made to the contingent annuitant(s). 4. Option D - Straight Life Annuity. The Straight Life Annuity provides the member with the highest monthly benefit for his lifetime. However, all payments stop at the member’s death.
2. Option B - 50% or 100% Survivor. Option B continues payments after the member’s death to a contingent annuitant. The contingent annuitant can be any person, including a former spouse. The option provides a reduced monthly benefit to the member for life. After the member’s death, a percentage of that benefit, either 50% or 100%, whichever is chosen, will continue for the lifetime of the contingent annuitant.
3. Option C - 10 Year or 20 Year Period Certain. Option C provides a reduced monthly benefit to the member for his/her lifetime with payments guaranteed from the retirement date for 10 or 20 years (whatever is chosen). If the member should die within 10 years (120 payments) or 20 years (240 payments) from the date of retirement, the remaining payments will be made to the contingent annuitant(s).
4. Option D - Straight Life Annuity. The Straight Life Annuity provides the member with the highest monthly benefit for his lifetime. However, all payments stop at the member’s death.
A. No matter what is ordered in the PADRO, state statutes still require that the member provide his or her current spouse with a lifetime benefit unless the current spouse “waives” his or her right to it. Therefore, at retirement, if the member designates the alternate payee as the contingent annuitant, the selection must be signed off by the current spouse. If the current spouse does not “waive” his or her right to a lifetime benefit, the Plan cannot enforce the option contained in the PADRO. Regardless of what it states in the PADRO, the alternate payee will not receive a benefit after the death of the member. If the member chooses the correct option but the current spouse refuses to execute a spousal waiver, the Division will notify all parties of this refusal. SERS cannot change the option election.
Regardless of what it states in the PADRO, the alternate payee will not receive a benefit after the death of the member. If the member chooses the correct option but the current spouse refuses to execute a spousal waiver, the Division will notify all parties of this refusal.
SERS cannot change the option election.
