House GOP Leader Klarides Says Malloy Pension Proposal Pushes Off Problems to the Future

HARTFORD – The Governor’s proposed pension plan pushes off filling the gaping hole in Connecticut’s state employee retirement plans, House Republican Leader Themis Klarides said today, and noted that the administration and unions did not achieve any savings in employee benefits as part of their negotiations.

The Governor released the proposal today after lengthy discussions with state unions over the required state contributions.

“We appreciate all the work that went into this proposal but it does not include critical issues such as pension benefits and individual contributions that must be addressed if the state is serious about fixing the retirement system,’’ Klarides said . “These plans will grow increasingly unaffordable for future generations. Quite simply, our children and grandchildren will get stuck with the bills.’’

Republicans have proposed a variety of changes to the pension plans to achieve significant  savings:

• increase individual contributions of 6 percent of salary to their pensions;
• eliminate overtime income for the purpose of calculating pensions;
• a three-year wage freeze beginning in the current year;
• make an additional SERS payment of $100 million;
• create a mandatory Defined Contribution Plan for new state employees with the state contributing no more than 4 percent of salary. This would be in lieu of the Defined Benefit Plan currently in existence.

She questioned whether the Governor’s plan would actually work because the state’s obligations grow heavier while the rate of return on state investments have lagged and underperformed benchmarks.

“Our unfunded liability grows every year. We cannot solve this problem by looking at only one side of the equation and the opportunity to make substantial changes is ever more fleeting,’’ Klarides said.