SB 873 — AN ACT STABILIZING THE TEACHERS' RETIREMENT FUND.

General Assembly SubstituteGovernor's Bill No.

873 January Session, 2019 ANLCO ACTNo. STABILIZING THE TEACHERS' RETIREMENT FUND.

4590 Referred to Committee on APPROPRIATIONS Introduced by:

SEN.

LOONEY, 11 Dist.

SEN.

DUFF, 25 Dist.

REP.

ARESIMOWICZ, 30 Dist.

st REP.

RITTER M., 1 Dist.

AN ACT STABILIZING THE TEACHERS' RETIREMENT FUND.

During any period when any bondsLCO securedNo. by the fund remain outstanding, amounts on deposit in the fund shall not be commingled with other state funds and the state shall have no claim to or against, or interest in, the fund, except as hereinafter provided.

4590 1 of 11 Governor's Bill No.873 bonds secured by the fund remain outstanding, amounts on deposit in the fund shall not be commingled with other state funds and the state shall have no claim to or against, or interest in, the fund, except as hereinafter provided.

The Treasurer shall enter into an agreement with LCOsuch \\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-00873-R1trust company or bank in accordance with the provisions of 12sections SB.docx1, Substitute7 Billand No.8 of this act and sections 10-183b, 10-183z, 12-801, 12- 806 and 12-812 of the general statutes, as amended by this act.

873 such trust company or bank in accordance with the provisions of sections 1, 7 and 8 of this act and sections 10-183b, 10-183z, 12-801, 12- 806 and 12-812 of the general statutes, as amended by this act.

Any moneys so pledged and later receivedLCO byNo. the state shall be subject immediately to the lien of the pledge without any physical delivery thereof or further act and such lien shall have priority over all other liens.

4590 2 of 11 Governor's Bill No.873 received by the state shall be subject immediately to the lien of the pledge without any physical delivery thereof or further act and such lien shall have priority over all other liens.

For purposes of this section, "required minimum capital reserve" means the maximum amount of principal and interest becoming due on bonds of the state issued pursuant to section 10- LCO183qq {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-0082of the general statutes, and any bonds refunding such bonds then outstanding, by reason of 12maturity R01-SB.docxor }a Substituterequired Billsinking No.fund installment in any succeeding fiscal year.

873 183qq of the general statutes, and any bonds refunding such bonds then outstanding, by reason of maturity or a required sinking fund installment in any succeeding fiscal year.

(2) if there has been deposited in an irrevocable trust for the benefit of the holders of the bonds secured by the fund either (A) moneys in an amount that shall be sufficient to pay, when due, the principal of and interest on such bonds, and any redemption premium required to be paid when such bonds are redeemed prior to maturity, or (B) noncallable and nonprepayable direct obligations of, or obligations the timely payment of principal of and interest on which are unconditionally guaranteed by, the United States of America, the principal of and the interest on which when due, without reinvestment, will provide moneys that together with the LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-0083 of 12 R01-SB.docx } Substitute Bill No.

8734590 3 of 11 Governor's Bill No.873 when due, the principal of and interest on such bonds, and any redemption premium required to be paid when such bonds are redeemed prior to maturity, or (B) noncallable and nonprepayable direct obligations of, or obligations the timely payment of principal of and interest on which are unconditionally guaranteed by, the United States of America, the principal of and the interest on which when due, without reinvestment, will provide moneys that together with the moneys, if any, deposited with the trustee at the same time, shall be sufficient to pay when due the principal of and interest on such bonds, and any redemption premium required to be paid when such bonds are redeemed prior to maturity;

(g) The state pledges to the holders of the bonds of the state issued pursuant to section 10-183qq of the general statutes, and any bonds refunding such bonds, that the state shall not limit or alter the rights of such holders under this section or reduce the transfer or deposit of moneys into the fund pursuant to section 12-812 of the general statutes, as amended by this act, or section 7 of this act until all such bonds are fully paid or until provision for the payment of such bonds has been made as provided in subdivision (3) of subsection (e) of this section, provided nothing contained in this section shall preclude such limitation, alteration or reduction if adequate provision is made by law forLCO theNo. protection of the holders of such bonds.

4590 4 of 11 Governor's Bill No.873 for the protection of the holders of such bonds.

(6) "Lottery fund" means a fund or funds established by, and under LCOthe {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-0084management and control of, the corporation, into which all lottery revenues of 12the R01-SB.docxcorporation }are Substitutedeposited, Billfrom No.which all payments and expenses of the corporation are paid and from which transfers to the General Fund or the Connecticut Teachers' Retirement Fund Bonds Special Capital Reserve Fund, established in section 1 of this act, are made pursuant to section 12-812, as amended by this act;

873 the management and control of, the corporation, into which all lottery revenues of the corporation are deposited, from which all payments and expenses of the corporation are paid and from which transfers to the General Fund or the Connecticut Teachers' Retirement Fund Bonds Special Capital Reserve Fund, established in section 1 of this act, are made pursuant to section 12-812, as amended by this act;

(c) (1) On a weekly basis, the president shall estimate, and certify to the State Treasurer, that portion of the balance in the lottery fund which exceeds the current needs of the corporation for the payment of prizes,LCO theNo. payment of current operating expenses and funding of approved reserves of the corporation.

The4590 corporation5 shallof transfer11 theGovernor's amountBill soNo.873 certifiedprizes, from the lotterypayment fund of thecurrent corporationoperating toexpenses theand Generalfunding Fundof [,]approved uponreserves notification of receipt of such certification by the Treasurer,corporation. except if the amount on deposit in the Connecticut Teachers' Retirement Fund Bonds Special Capital Reserve Fund, established in LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-008735 of 12 R01-SB.docx } Substitute Bill No.

873The corporation shall transfer the amount so certified from the lottery fund of the corporation to the General Fund [,] upon notification of receipt of such certification by the Treasurer, except if the amount on deposit in the Connecticut Teachers' Retirement Fund Bonds Special Capital Reserve Fund, established in section 1 of this act, is less than the required minimum capital reserve, as defined in subsection (b) of said section, the corporation shall pay such amount so certified to the trustee of the fund for deposit in the fund.

SubsectionSection (h)10-183z of section 10-183g of the general statutes is repealed and the following is substituted in lieu thereof (Effective Julyon 1,the 2019):date the Treasurer certifies, pursuant to section 1 of this act, that the amount on deposit in the Connecticut Teachers' Retirement Fund Bonds Special Capital Reserve Fund LCO No.

(h)4590 A6 benefit computed under subsections (a) to (d), inclusive, of this11 sectionGovernor's andBill underNo.873 subsectionsequals (a)or toexceeds (g),the inclusive,required ofminimum sectioncapital 10-reserve, 183aaas shalldefined continuein untilsaid thesection): death of the member.

[If] Notwithstanding the provisions of subsection (a) of section 10-183c, if twenty-five per cent of the aggregate benefits paid to a member before July 1, 2019, and prior to death, plus fifty per cent of the aggregate LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-008736 of 12 R01-SB.docx } Substitute Bill No.

873 benefits paid to a member on or after July 1, 2019, and prior to death, are less than such member's accumulated regular contributions, including any one per cent contributions withheld prior to July 1, 1989, and any voluntary contributions plus credited interest, the member's designated beneficiary shall be paid on the death of the member a lump sum amount equal to the difference between such aggregate payments and such accumulated contributions plus credited interest that had been accrued to the date benefits commenced.

Sec.

7.

Section 10-183z of the general statutes is repealed and the following is substituted in lieu thereof (Effective on the date the Treasurer certifies, pursuant to section 1 of this act, that the amount on deposit in the Connecticut Teachers' Retirement Fund Bonds Special Capital Reserve Fund equals or exceeds the required minimum capital reserve, as defined in said section):

On and after the effective date of this section, no public or LCOspecial {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-0087act of 12the R01-SB.docxGeneral }Assembly Substituteshall Billreduce No.such appropriation to an amount below such amount certified unless the Governor declares an emergency or the existence of extraordinary circumstances, in which the provisions of section 4-85 are invoked, and at least three- fifths of the members of each chamber of the General Assembly vote to reduce such appropriation during the biennium for which the emergency or existence of extraordinary circumstances is determined.

873 special act of the General Assembly shall reduce such appropriation to an amount below such amount certified unless the Governor declares an emergency or the existence of extraordinary circumstances, in which the provisions of section 4-85 are invoked, and at least three- fifths of the members of each chamber of the General Assembly vote to reduce such appropriation during the biennium for which the emergency or existence of extraordinary circumstances is determined.

(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 andLCO (2)No. the unfunded past service liability.

4590 7 of 11 Governor's Bill No873 and (2) the unfunded past service liability.