Connecticut’s unfunded pension liabilities continue to grow despite efforts to curb the growing costs to the state. In hard numbers, Connecticut’s pension liability - the money owed to future state workers - has grown from $11.8 billion in 2010 to 20.4 billion in 2016, according to a fact sheet released Thursday by the Office of Fiscal Analysis.
Fringe benefit costs for Connecticut state employees can range anywhere from 56 percent of payroll to 86 percent for judges, family magistrates and compensation commissioners, according to a memorandum from state comptroller Kevin Lembo.
One of the major selling points of the union concessions agreement negotiated between Gov. Dannel Malloy and state union leaders is a new Tier IV hybrid retirement plan, which combines a 401(k) style retirement account with a pension. Proponents claim that this move will save the state money and help stabilize the state employee retirement system, but questions remain as to how the retirement payout would be calculated between the two different plans.
In a cautiously worded opinion issued Thursday, Attorney General George Jepsen said the state legislature does have the ability to change existing labor contracts but would need “substantial justification.”
Union members will receive $2,000 lump sum payments, which will count toward their pensions, next July as part of the concessions deal worked out between Gov. Dannel Malloy and union leaders. SEBAC, the bargaining coalition that negotiates benefits for state government unions, represents approximately 40,000 members, meaning the state of Connecticut could have to make a payout as high as $80 million, although the lump sums will be pro-rated for part-time employees.
On the same day that state employee unions announced the ratification of Gov. Dannel Malloy’s concessions deal by union rank and file, House Republican Leader Themis Klarides, R-Derby, held a press conference saying the concessions deal is “tying the hands of the Connecticut taxpayers for the next ten years.”