February 6, 2017

Rep. Rutigliano: Time for Real Pension Reform

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No More Delaying the Problem for Future Generations

HARTFORD- State Representative David Rutigliano (R-132) opposed a state employees’ pension refinancing agreement debated in the House of Representatives Feb 1^st saying the state could have gotten a much better deal if all sides were invited to the negotiating table.

Initially represented as creating interim savings on the state’s unfunded pension liabilities, an actuarial analysis, actually revealed that the deal provides no savings over the term of the agreement, and lays an additional $11 Billion burden on Connecticut taxpayers over the lifetime of the new agreement.

The State House voted 76 to 72 to ratify the deal on a nearly party-line vote, while the State Senate voted 18-17 with Lt. Gov. Nancy Wyman casting the tie-breaking vote in favor of the deal.

Rep. Rutigliano along with other lawmakers released data obtained from two actuarial analyses that show how additional steps can rein in the state’s unfunded pension liabilities. Both reports show how pairing pension finance changes with modifications to state employee benefits could increase the solvency of the state pension plan.

“Regrettably the governor’s deal does nothing to fix the structural problems with our state pension system and uses accounting gimmicks to cover up our financial problems and immorally pushes the burden of debt onto future generations, children who aren’t even born yet,” said Rep. Rutigliano.

Information attached includes:

An analysis from actuaries at the Reason Foundation modeling changes to SERS that could be added to the SEBAC agreement funding policy changes including: adopting a defined contribution retirement plan for new hires, increasing employee pension contributions to 4%, and capping cost of living adjustments to 2% – which would save the state approximately $100 million annually.
An analysis from actuaries at the nonprofit Pew Charitable Trusts showing the reduction in unfunded liability that could be achieved with $200 million in state employee pension benefit changes. Pew confirmed that if the $200 million is sent back into the fund it would cut 7 years off the length of the refinancing, thereby saving taxpayers billions in future payments.
Comparison of Unfunded Liability Reduction Chart
State Pension Contribution Comparison
Pension Integrity Project