CT Pension Officials Appeal Pension Increase Ruling

March 6, 2006 (PLANSPONSOR.com) - The Connecticut State Employees' Retirement Commission (SERC) is appealing a lower court ruling granting a pension bump of nearly $10,000 to a state lawyer for the value of unused vacation time.

Letting a December 2005 appellate court ruling in favor of former Assistant Attorney General Donald Longley stand could have an “enormous” impact on state pension funds and “increase the state’s unfunded pension liability by $800 million to $1.14 billion over the next quarter century,” the SERC contended in its appeal, according to the Connecticut Law Tribune.

The appellate court ruling agreed with the 36-year legal veteran that, not only did he deserve to get cash for his 120 unused vacation days, but that money should be counted to substantially increase his lifetime state pension from $90,600 to $99,700 annually.

Under Connecticut’s State Employees’ Retirement Act, pensions are calculated based on the salary average of an employee’s three highest-paid years. Longley’s final year was enriched by $53,000 for his missed vacation days. The statute defines “annual salary” as “any payment for state service” including accrued vacation time.

According to the news report, for years, the commission has converted unused vacation days into a period of employment, in effect, in Longley’s case, extending his final year by five months and 22 days of “calendar time,” and subtracting an equal amount of time from the earliest of his three averaged years.

The appellate court ruled that public policy considerations were not its concern when interpreting the meaning of the statute. Longley had a statutory right to factor accrued vacation time into his retirement income and if the commission wanted to impose a policy that relies on a “hypertechnical” reading of the statute, it would have been wise to create a regulation that would give potential retirees advance warning, the appellate court said.