Substitute House Bill No. 7276 introduces a new tier within the Connecticut Municipal Employees Retirement System (CMERS) called "MERS 2.0," which will apply to members who become eligible for membership on or after July 1, 2026, for non-participating municipalities, and July 1, 2027, for participating municipalities. The bill establishes key definitions and retirement eligibility criteria, including specific contribution rates for members, with public safety employees contributing a higher percentage. Additionally, it mandates the creation of a defined contribution retirement plan by July 1, 2026, requiring contributions from both members and municipal employers. The Connecticut Municipal Employees Retirement Commission will oversee this new plan, ensuring it aligns with the MERS 2.0 structure.

The bill also modifies life insurance benefits for state employees and members of the General Assembly upon retirement, specifying that those retiring on or after July 1, 2025, with at least 25 years of "credited state service" will receive life insurance coverage equivalent to half of their pre-retirement amount, with a minimum of $10,000. This change narrows eligibility from the previous requirement of 25 years of "state service." Furthermore, the bill repeals certain subsections of existing law regarding life insurance contributions and benefits, streamlining the process. Overall, the bill aims to modernize the retirement system while ensuring that the distinctions between public safety and general members remain intact.