Lamont reaches pension restructuring deal with unions
HARTFORD, Conn. (AP) — Another agreement has been reached with Connecticut state employee union leaders on a plan to extend the schedule for paying off pension liability, a move designed to provide budget relief.
It marks the second time in three years the state has restructured its pension payments.
Democratic Gov. Ned Lamont on Thursday said this latest deal reached with the State Employees Bargaining Agent Coalition will result in annual savings to the state’s main spending account — the general fund — that will range from $115 million and $121 million, through 2032.
“Some may have doubted our ability to achieve the budgeted pension savings, but here we are, and I am sure even they will enthusiastically agree that today’s news positions our state on firmer ground well into the next decade,” Lamont said in a written statement. The governor was alluding to criticism from Senate Republican Leader Len Fasano of North Haven, who has argued it was unconstitutional for Lamont to sign a Democratic budget that counted on labor savings that hadn’t been finalized yet by state employee union leaders.
Under this plan, which requires legislative approval, liability for pensions earned as of 1984 will be paid off in 2047 instead of 2032.
A vote is not needed among rank-and-file union members because there’s no change to contractual benefits. While open to changes they consider to be a “win-win” with Lamont, such as restructuring pension payments, SEBAC leaders have said they’re “not open to a penny of further concessions beyond the $24 billion in savings we are already providing” through an agreement reached in 2017 with former Democratic Gov. Dannel P. Malloy.
“SEBAC will not be part of asking for more sacrifices for state employees, who have already given so much for the people we service,” SEBAC said Wednesday in a statement.
In 2016, Malloy reached a similar agreement with the unions to extend the amortization period for unfunded pension liability in a new 30-year period in order to smooth out projected spikes in state pension payments. Union leaders have viewed such debt restructuring as a way to stabilize state employee pensions by ensuring the state’s obligations to current and future retirees are fully funded.