WE NEED YOU TO CONTACT YOUR STATE SENATOR TONIGHT
-(Wed Feb 1st)
(List of Senator emails and phone numbers).
Tomorrow the State Senate will vote on the pension funding agreement reached between the Office of Labor Relations (OLR) and the SEBAC unions. If adopted by the legislature, the pension funding agreement will help to ensure the long-term funding of our pensions, while at the same time normalizing long-term costs to the State. The agreement is advantageous to the State, the unions, and the citizens of Connecticut. If defeated, it could be the first step towards the end of collective bargaining altogether.
In their attempt to shake down the unions, powerful forces in the legislature are preparing to defeat the pension funding agreement tomorrow on the Senate floor. Their ultimate goal is to do away with collective bargaining. They want to make Connecticut a "right to work" state. We know that "right to work" translates as "work more for less". No surprise they want to hit your pensions too.
If our enemies succeed in defeating the Pension Funding Agreement, we may find ourselves one step closer to experiencing our "Wisconsin Moment". If that happens, all will be lost.
Please contact your State Senator TONIGHT. Tell them to support Senate Resolution 7. Remind them that the Pension Funding Agreement is fiscally responsible or all of Connecticut. The agreement normalizes pension amortization costs to the state, thus avoiding the Governor's "fiscal cliff"
Importantly, the Retirement Commission has already reduced the assumed rate of return on investment from 8 percent to 6.9 percent (as recommended per the agreement). If the changes to the amortization schedule are not also implemented (as per the agreement), the impact will be an additional $500 million dollar hit to an already precarious budget.
OLR agreed. The Unions agreed. The Comptroller agreed. The Treasurer agreed. Even the Governor agreed: The Pension Funding Agreement is good for Connecticut. Don't let obstructionist senators, led by Len Fasano, derail the agreement.
Contact your Senator before tomorrow's vote. Do it before its to late.
List of Senator emails and phone numbers
posted 1/31/2017
originally posted 12/9/2016:
No Change to Employee Healthcare, Retirement or other Benefits or Contributions
Union leaders and the Governor have arrived at a plan that DOES NOT impact retirement benefits or employee contributions. This is a pension funding change which will ensure that future pension obligations can be met and the pension system remains stable. This plan will still need approval from the legislature.
We are all aware that the pension fund is far below "fully funded" status. The Governor had been aiming to pay off the unfunded liabilities by 2032 through increasing annual pension payments. Each year, the State was committed to increasing its pension fund payments by a few hundred million dollars annually until we reached a payment of $6 billion in 2032, which the Governor consistently referred to as the "fiscal cliff". This was a growing problem for future state budgets with an increasing public impact. About a year ago, Comptroller Lembo created an alternate plan and began a conversation which would restructure (some call it re-finance) the pension funding payment plan. That conversation has continued over the past year. All parties wanted a plan that would secure our pensions while increasing stability in State budgets.
The “bullet points” of the agreement are best understood by actuaries who review the State’s financial position and to apply a rating to the State’s economic stability and to determine the State’s bond rating. The “plain english” version of the plan is that this will smooth out annual payments and stretch some of the liability over 30 years rather than all of the liability over just 16 years. It also improves (makes them more realistic) the actuarial assumptions used to calculate the pension liability.
The bullet points:
- Reducing the assumed rate of return on investment from 8 percent to 6.9 percent;
- Transitioning from "level percent of payroll" to "level dollar" amortization over five years;
- Moving to Entry Age Normal cost methodology;
- Maintaining 2032 as the payoff date for the unfunded liability accrued through December 31, 1983; and
- Extending the amortization period for the balance of the unfunded liability in a new 30-year period.
These changes, if adopted by the legislature, will NOT impact benefits or increase any cost to members.
Link to the agreement
Link to the Boston College Pension Funding Report
Link to the S&P Global Rating "revised to negative"
Originally Posted 12/9/16
