Pension agreement to affect Connecticut jobs
Posted on December 31, 2016
A new pension agreement that goes into affect will impact Connecticut jobs.
Governor Dannel P. Malloy and Office of Policy and Management Secretary Ben Barnes are applauding the State Employees Retirement Commission on their unanimous vote to lower the assumed rate of return for the State Employee Retirement System (SERS) from 8 percent to 6.9 percent.
The action was prompted by the agreement Governor Malloy and the State Employees Bargaining Agent Coalition (SEBAC) announced last week that will allow the state to fully fund its pension obligations on a stable, predictable basis while continuing to support the state’s retirement system.
Governor Malloy said, “I would like to commend the Retirement Commission for having the wisdom and foresight to make this necessary and much-needed change in the assumed rate of return. It is imperative we take action to staunch growth in the unfunded liability for our pension system and today’s change provides the state with a realistic and reasonable rate moving forward. The lowering of the rate will put Connecticut in line with other states and private sector plans, and will strengthen confidence in the state’s ability to resolve the unfunded liability – as we saw today with the credit positive from Moody’s.”
Secretary Barnes said, “The unnecessarily optimistic 8 percent assumed rate of return was creating significant growth in the unfunded liability – as much as $4.2 billion from 2001 to 2014 – and I would like to thank the Retirement Commission for taking the prudent action of lowering the rate to 6.9 percent. This change puts us on a much better path moving forward. This important and vital change will allow the state to resolve large portions of the unfunded liability without the fear that the liability is continuing to grow due to unrealistic planning.”