If a Connecticut school district forgot to withhold a teacher's pension contributions years ago, can the teachers' retirement board now bill the teacher (or the employer) for what's missing plus interest?

Plain-English summary

A teacher had been notified, years later, that some 1999 paycheck contributions to the State Teachers' Retirement System were never deducted by the employer or remitted to the Board, and that the interest on those missing contributions had grown to roughly twice the unpaid contribution amount. Senator McKinney asked whether the Board (a) had the statutory authority to "bill" the teacher in this situation and (b) could require the former school-district employer to pay the interest.

The Connecticut Attorney General concluded that the Board could notify the teacher directly under Conn. Gen. Stat. § 10-183ff, which requires the Board to discover and correct any record change that affects a member's benefit. It could not, however, "bill" the former employer for the interest, because the underlying statutes (Conn. Gen. Stat. §§ 10-183n(a) and (b)) impose the interest obligation only on employers who deducted contributions and then failed to forward them, not on employers who failed to deduct in the first place. The AG cited Colangelo v. Heckelman, 279 Conn. 177, 191 (2006), for the rule that the expression of one situation in a statute excludes the unmentioned one (expressio unius est exclusio alterius).

In practical terms, the teacher had a choice: forego the credit for the months without remitted contributions, or pay the System for the missing contributions with interest. The opinion expressly declined to say whether the teacher might have a civil cause of action against the former employer for the resulting financial harm; that question was outside the Board's process.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Why was the teacher hit with the interest bill and not the employer?
A: Because, under the statutes as they read in 2012, interest accrued on the missing contribution itself, not on a separate employer-liability theory. The employer's interest exposure (9% per year under § 10-183n(b)) attached only to amounts the employer had actually withheld and then failed to remit. If the employer never withheld in the first place, the salary stayed with the teacher and so the contribution-plus-interest catch-up fell on the teacher to opt into, if the teacher wanted the service credit.

Q: Can the teacher just skip the catch-up and take a smaller pension?
A: The opinion treated that as the teacher's choice. Section 10-183ff requires the Board to correct the record and notify the affected member; the member can decide whether to pay missing contributions with interest in exchange for the months of credit, or accept the credit gap and the smaller benefit.

Q: Why couldn't the Board penalize the employer?
A: Chapter 167a of the Connecticut General Statutes contains no general penalty provision for failure to deduct, and the AG's office cannot read one into the statute when the Legislature has not put it there. Connecticut Light & Power v. Dept. of Public Utility Control, 266 Conn. 108 (2003), holds courts may not supply statutory language the Legislature chose to omit.

Q: Did the AG say anything about the teacher's options against the employer?
A: Only that it offered no opinion on a separate civil claim. The opinion was confined to the Board's authority and the rights of the member and employer in the Board's own process.

Q: What other correction provisions exist in section 10-183ff?
A: Subsection (b) allows the Board to waive repayment for an overpayment that would cause hardship. Subsection (c) requires refunds with interest if a person was erroneously included in the System. Subsection (e) allows a member to purchase credit with interest if previously erroneously invoiced. Subsection (f) requires payment of the estimated benefit if a member resigned in reliance on an erroneous estimate and could not reasonably have detected the error. The AG noted these but declined to say whether any applied on the facts presented.

Background and statutory framework

The Connecticut State Teachers' Retirement System operates under Chapter 167a of the General Statutes. Section 10-183b(7) defines "contributions" as amounts withheld by an employer and paid to the Board from a member's compensation. Subsection (8) defines "credited interest" as interest at a rate set by the Board consistent with industry practice. Section 10-183n(a) places the deduction-and-remit duty on employers (currently expressed as a percentage of one-tenth of the teacher's annual salary rate). Subsection (b) charges employers 9% interest per year on amounts deducted but not forwarded to the Board by the fifth business day of the following month.

The structural gap the McKinney inquiry exposed was that no comparable statute charges employers for amounts they failed to deduct at all. The AG read the Legislature's silence as deliberate, citing the rule against supplying omitted statutory text and the expressio unius canon.

Section 10-183ff supplies the corrective machinery. When the Board discovers a record change that results in a member receiving more or less than entitled, it must notify the member and "correct the same." That correction reaches the member's options (paying the missing contributions plus interest for the credit, or accepting the gap) but does not transfer the interest cost onto the employer.

Citations and references

Statutes and regulations:

• Conn. Gen. Stat. § 1-2z
• Chapter 167a, Conn. Gen. Stat. (Teachers' Retirement System)
• Regs., Conn. State Agencies § 10-183/-22(b), (c)

Cases:

• Foley v. State Elections Enforcement Commission, 297 Conn. 764 (2010), plain meaning of statute
• Bennett v. New Milford Hospital, Inc., 300 Conn. 1, 26 (2011), use of legislative history when text is ambiguous
• Colangelo v. Heckelman, 279 Conn. 177, 191 (2006), expressio unius est exclusio alterius
• Connecticut Light & Power Co. v. Dept. of Public Utility Control, 266 Conn. 108, 119 (2003), courts may not supply statutory language

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Original PDF: https://portal.ct.gov/-/media/ag/opinions/2012/mckinneyopinion031912-pdf.pdf?rev=8682cb3b137e4efbaa9106994a5b3c4b

Original opinion text

GEORGE C. JEPSEN
ATTORNEY GENERAL

55 Elm Street
P.O. Box 120
Hartford, CT 06141-0120

Office of The Attorney General
State of Connecticut

March 19, 2012

The Honorable John McKinney

Senate Minority Leader

28" District

Legislative Office Building, Suite 3400
Hartford, CT 06106-1591

Dear Senator McKinney:

You have requested this Office’s opinion regarding whether the State
Teachers’ Retirement Board (“Board”) possesses the legal authority to “bill” a
member of the Teachers’ Retirement System (“System”) both for missing
contributions and interest due on those contributions. In addition, you have
inquired whether the Board may require the member’s former employer to
compensate the member for any interest charges related to these missing
contributions, given the employer’s statutory duty to deduct and remit such
contributions to the Board on behalf of the member.

We conclude that although the Board may perhaps not automatically “bill”
the member, it is authorized statutorily to notify a member regarding missing
contributions and interest. Moreover, with respect to contributions never withheld
by a member’s employer, we conclude that in the circumstance you describe the
Board does not have the statutory authority to require the member’s former
employer to compensate the member for interest charges, or to assess a penalty on
an employer for its failure to withhold mandatory contributions.

The information provided with your request describes a circumstance in
which the Board recently notified a member of the System that certain
contributions for a limited period in 1999 had not been deduct by the member’s
employer or remitted to the Board. In addition, you indicate that the Board
notified the member of interest due on the missing 1999 contributions. Your
letter indicates that if the member were to now remit the contributions to the
System with interest, the interest would equal twice the amount of the actual
contributions owed.

To answer your inquiries it is necessary to review the entire statutory
scheme of Chapter 167a of the Connecticut General Statutes and its implementing
regulations. Foley v. State Elections Enforcement Commission, 297 Conn. 764,

possible”). “The meaning of a statute shall .. . be ascertained from the text of the
statute itself and its relationship to other statutes.” (Emphasis added) Conn,
Gen. Stat. §1-2z. If the “meaning” of the “text is plain and unambiguous and does
not yield absurd or unworkable results, extratextual evidence of the meaning of
the statute shall not be considered.” Id. If, on the other hand, the statutory
language is ambiguous, we may analyze extratextual sources, such as legislative
history. Bennett v. New Milford Hospital, Inc., 300 Conn. 1, 26 (2011).

Your inquiry first requires us to examine Conn. Gen. Stat. § 10-183b(7),
which provides in relevant part that “‘[c]ontributions’ means amounts withheld
pursuant to this chapter and paid to the board by an employer from compensation
payable to a member,” and that “‘mandatory contributions’ are contributions
required to be withheld under this chapter.” The Board’s implementing
regulations provide that “[a] person who is a member in the State Teachers’
Retirement System shall make mandatory contributions” and further that “[a]
member shall receive a month of credit for each month of service... for which
mandatory contributions are made... .” (Emphasis added) Regs., Conn. State
Agencies § 10-183/-22 (b) & (c). Thus, clearly for a member of the System to
receive retirement credit, contributions from his or her compensation must be
remitted to the Board.

Although the legislature has placed the burden of deducting and remitting
these “mandatory contributions” upon the member’s employer; Conn. Gen. Stat. §
10-183n(a);' as set out in the immediately preceding paragraph, without those
mandatory contributions, the member is not credited with the service. Moreover,
although it is clear from the general statutes that once the employer deducts the
contributions from the employee, those “amounts shall at all times be the property
of the system” and the employer may be liable for interest at 9% per year if those
amounts are not forwarded to the system; Conn. Gen. Stat. § 10-183n(b); the
statutes do not address the situation in which the employer has failed to deduct
those contributions. We therefore cannot conclude that the Board has the
authority to bill the employer for contributions it did not withhold — and that the
member therefore retained -- even if it should have.

Rather, it appears that in the situation you describe, the member would
have a choice: to either forego the credit for the months during which the System
did not receive mandatory contributions from him or her, or to pay the System for
the missing contributions with interest. This conclusion is supported by a reading
of Conn. Gen. Stat. § 10-183ff, which provides in relevant part that “[s]hould any
change in records result in any member . . . receiving from the teachers’
retirement system more or less than he would have been entitled to receive . . .
then upon discovery... the Teachers’ Retirement Board shall notify the
member ... affected and correct the same... .” (Emphasis added) In this

' Section 10-183n(a) provides in relevant part that “[eJach employer shall . . . deduct each month
seven and one-fourth per cent of one-tenth of such teacher’s annual salary rate as directed by said
board and any additional voluntary deductions as authorized by such teacher... .”

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situation, the “change in records” would stem from the Board’s determination that
certain contributions had not been remitted, and would result in the member
receiving less than he or she “would have been entitled to receive” if the
contributions had been received and credited. Thus, the Board is obliged to notify
the member “affected and correct the same” in this instance because mandatory
contributions were not made in 1999, and his or her benefits would be affected.

The second part of your inquiry concerns whether the Board may require
an employer to pay the interest charges that have accrued on the mandatory
contributions the employer failed to deduct. Conn. Gen. Stat. § 10-183b(8)
provides in part: “[C]redited interest shall be assessed on any mandatory
contributions which were due but not remitted prior to the close of the school year
for which salary was paid.”

Again, we find no authority for the Board to require the employer to pay
this interest. Our conclusion is buttressed by the fact that the legislature has
obligated the employer to pay interest on amounts it has deducted from the
employee’s compensation and failed to forward to the System, but it has not
obligated the employer to pay interest in the situation you describe. Specifically,
should an employer deduct the mandatory contribution from a member’s salary,
but “such amounts are not accompanied by the reports and information deemed
necessary or desirable by the board for the proper administration of the system .. .
the board may deem such amounts not received . . . until the date on which such
reports and information are received. Said board shall be entitled to receive from
an employer interest at the rate of nine per cent per year from the due date on all
amounts deducted by such employer and not received by said board by the fifth
business day of the following month.” (Emphasis added) Conn. Gen. Stat. § 10-
183n(b). The statute, is silent, however, with respect to any course of action the
Board may take against the employer regarding interest should it fail to deduct the
mandatory contribution from the member’s compensation. See Colangelo v.
Heckelman, 279 Conn. 177, 191 (2006) (citing rule of statutory construction
expressio unius est exclusio alterius, or “the expression of one thing is the
exclusion of another’’).

2 Although we conclude that the language of § 10-183ff is plain and unambiguous with respect to
permitting the Board to directly notify a member regarding their benefits, further support for our
conclusion is found in the legislative history surrounding P.A. 83-397. Specifically, Senator
O’Leary explained that “the bill as amended will provide a structure for correcting errors and
benefit payments which result from changes or errors in the teacher’s retirement board records.
Once discovered, the member... will be notified and the overpayment or underpayment will be
corrected where practical by adjusting future payments so that the acturial [sic] value of the
proper benefit will be paid.” (Emphasis added) 26 Senate Proc., 1983 Sess., pp. 3317-19 (May
31, 1983) (remarks of Sen. O’Leary). Thus, the Legislature clearly intended that the Board notify
the member directly in this instance because the member’s benefit could be affected by the
missing 1999 contributions.

3 Conn. Gen. Stat. § 10-183b(8) further defines “[c]redited interest” to mean “interest at the rate
from time to time fixed by the board consistent with industry standards and practices.”

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In addition, there is no statutory provision in Chapter 167a that authorizes
the Board to assess a fee or penalty on an employer regarding its failure to deduct
a mandatory contribution. Therefore, absent express statutory language
authorizing the Board to “bill” the employer for interest on missing contributions,
or to penalize the employer for its failure to deduct a contribution, such a
construction cannot be read into Chapter 167a. See Connecticut Light & Power
Co. v. Dept. of Public Utility Control, 266 Conn. 108, 119 (2003) (courts “are not
permitted to supply statutory language that the legislature may have chosen to
omit”).

It is also noteworthy that the legislature has provided for several ways to
correct errors concerning a member’s records or adjusting a member’s benefits,
including situations in which the Board has some discretion with respect to
correcting such errors. See, e.g., Conn. Gen. Stat. §§ 10-183ff(b)@epayment for
overpayment may be waived if Board believes it “would cause hardship); 10-
183ff(c)(Board shall refund contributions and interest for erroneous inclusion of a
person in System); 10-183ff(e)(member afforded opportunity to purchase credit
with interest if erroneously invoiced previously); 10-183ff{(f)(Board shall pay
member as reflected in erroneous estimate of benefits if member resigned in
reliance on the estimate and could not reasonably have detected error). From the
facts provided we are unable to opine on whether any of those statutory avenues
might be available to the member or might result in any relief.’ However, in light
of the fact that the legislature has addressed the correction of certain types of
errors, the fact that it has failed to do so in this context further supports our
conclusions. Id.

Thus, we conclude that the Board was authorized to notify the member
directly regarding missing 1999 contributions and interest due. In addition, we
conclude that there is no statutory authority for the Board to “bill” the member’s
former employer for interest on mandatory contributions that were not withheld
from the member’s compensation in 1999,

We trust that we have answered your questions.

GEORGE JEPSEN

GI/KDO/gr

• Also, we can offer no opinion on whether the member might have a cause of action against the
  former employer under any theory. Rather, we must confine our opinion to the obligations of the
  Board and the rights of the member and the employer before the Board.

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