A state audit released yesterday found that officials at the State Comptroller’s Office (OSC) incorrectly calculated retirement payments for judges, failed to finalize retirements in a “timely manner,” and had misclassified staff who returned to work after having previously retired. The audit, conducted by Connecticut’s Auditors of Public Accounts (APA), evaluated the OSC’s oversight of state retirement benefits from 2022 to 2023.
Each of the audit’s three findings had been previously reported in prior state audits, and two of them were disputed by OSC officials, who shifted the blame to other agencies, disputed the auditors’ calculations and determinations, and blamed one finding “on several mistaken premises.”
Per the audit, judges’ base retirement benefits are dictated by when they first joined the bench; those whose judgeship began on or after Jan. 1, 1981, and before July 1, 2011, receive benefits equal to their yearly salary at the time of their retirement, while for those whose judgeship began after July 1, 2011, their benefits are an average of their yearly salary for their last five years of service. Judges who served ten or more years receive longevity payments, the rates of which are determined by state law.
Upon reviewing 10 out of the 29 judges who retired during the audited period, the APA found that four judges’ retirements were “improperly calculated.” For three of these judges, the OSC used the wrong five-year average salary, while the fourth judge was shorted of additional longevity benefits because the OSC determined them to have only served 14 years, despite the APA’s finding that they “appeared to have 15 years of state service.” Per state law, judges who have served less than 15 years receive longevity payments worth 3% of their annual salary once a year, while those serving 15-2o years receive these 3% payments twice a year.
“Errors in pension benefit calculations resulted in incorrect payments to retirees,” reads the audit. “The incorrect calculations appear to be due to lack of oversight. The Office of the State Comptroller relied on incorrect or incomplete employment data, and the wrong hire dates.”
The APA recommended the OSC to “strengthen internal controls to ensure that retirement benefit payments for judges are calculated accurately” and “ensure that employment data in Core-CT is accurate.”
OSC officials rejected responsibility for the miscalculations, instead shifting blame to the State’s Judicial Branch, and called the auditors’ calculation of underpayment “misleading.”
“The exceptions cited by the Auditors do not represent either lack of oversight within the Retirement Services Division or systemic failures in the processing of judicial retirements,” they responded. “Most resulted from inaccurate information that was provided by the Judicial Branch, and on which the Division no longer relies. In another case, the Auditors challenged an accurate calculation.”
The OSC argued that most of the pay discrepancies were “immaterial,” stating “three of the auditors’ exceptions resulted in differences of, respectively, $22.67, $13.25, and $2.73 per month in each retiree’s monthly benefit.” OSC officials also said that incorrect hire dates in Core CT, the state’s payroll system, are “inevitable in a database created out of decades of records stored in paper files and various electronic platforms.” The OSC also disputed the auditors’ finding that one of the judges had 15 years of service.
“Our review of the retiree’s records confirmed the Division’s calculations and has not been provided information from the Auditors on how they arrived at a different result,” the OSC responded.
Despite their denials, OSC officials asserted that their Retirement Services Division has been working on “a years-long project of reviewing and correcting” employment records, and has stopped relying on Judicial Branch retirement calculations, instead creating an automated system to match “applicable rules to each judge’s first day of judicial service and date of retirement” to do the correct calculations.
The auditors also found that OSC failed to “promptly” finalize 15 employees’ retirements, finding it took the office anywhere from seven months to 15 years after the employees’ retirements to do so. The auditors found one retiree went 8 months after retirement without a pension payment, that OSC failed to pay over $7,420 in interest on payments owed to seven retirees, and that there were discrepancies in one retiree’s service time throughout various forms and databases. The auditors found four retirees were underpaid by $384 per month, and one retiree was overpaid $1,347. Auditors noted that “one of these retirees” was identified during a prior audit, but that “OSC did not correct the payment.”
“Retirees did not receive their proper benefit payments in a timely manner,” reads the audit. “The Office of the State Comptroller should strengthen internal controls to ensure that retirement benefit payments for SERS [state employees] and MERS [municipal employees] are promptly finalized and reviewed.”
The OSC said the APA’s “findings are based on several mistaken premises,” before listing a series of factors they claimed the auditors failed to consider, such as changes in how the OSC is supposed to manage payments to disabled retirees, changes in the state employee’s union collective bargaining agreement on the applicability of interest payments to retirees and adjustments to employees benefits post-retirement. The OSC also claimed that the auditor’s finding of “discrepancies in one retiree’s calculated credited service time” was a misunderstanding of how the OSC calculates benefits, stating that each “represents a different stage in the process of calculating a retiree’s benefit,” while “only one” is deemed a final determination.
The APA said the OSC’s response “contradicts written evidence in the audited retirement files and shows that OSC did not review our exceptions.” It noted that for two retirees, “OSC did not calculate the final benefit payments until after their death,” and another received only an “esimtated pension” for over seven years.
The only finding that OSC did not dispute was that its employees used “incorrect or incomplete employment data” when assigning rehired state employees to the correct benefits tiers. The OSC responded by saying its Retirement Services Division “has increased the training it provides to agencies and Human Resources professionals.”
