The Connecticut State Employees’ Retirement System hit a low point recently, with new metrics revealing the pension is just 38% funded. Gov. Ned Lamont announced he’s struck a deal with state unions that would substantially provide budgetary relief for the situation.
The plan is to re-amortize a portion of the state’s liability over the next 15 years, resulting in budgetary savings of approximately $115 million to $121 million each year until 2032.
The retirement system’s plan includes a stipulation for . Once the budget reserve fund equals 15% of the general fund, additional surplus funds would be used directly to pay down the pension’s unfunded liability, or to mitigate outstanding debt.
“I refuse to take a passive approach and sit on the sidelines when faced with the need to make reasonable adjustments to address the state’s structural deficits,” Lamont said in a prepared statement. “The pension liability we face is decades in the making and will take decades to resolve.”
Through the governor’s plan, which still needs to be approved by the state legislature, the retirement system should be fully funded by 2047.
The state’s newly elected treasurer, Shawn Wooden, has also worked to fix the state’s retirement systems. He’s been open to ideas to further stabilize the pension plans.
There’s also a task force commissioned To assess the feasibility of creating a trust to possibly transfer state assets to the state’s pension funds.
Connecticut recently lowered its assumed rate of return from 8% to 6.9% for the teachers’ retirement system and the employees’ fund.
“Some may have doubted our ability to achieve the budgeted pension savings, but here we are, and I am sure even they will enthusiastically agree that today’s news positions our state on firmer financial ground well into the next decade,” Lamont added in a statement.
Top Republican Len Fasano has been known to put pressure on Lamont to address the pensions’ issues.
His office did not respond to questions by press time.
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Tags: Connecticut, Connecticut State Employees' Retirement System, Pension, Shawn Wooden