The Connecticut General Assembly approved a plan to restructure state pension obligations, said a news release issued by the governor's office.
The plan to modify the funding calculation and amortization schedule for the $11 billion Connecticut State Employees Retirement System, Hartford, was agreed upon in December by Gov. Dannel P. Malloy and the State Employees Bargaining Agent Coalition.
Lt. Gov. Nancy Wyman broke a 17-17 tie in the Senate, while the House voted 76-72 to approve the deal. Mr. Malloy is expected to sign the bill.
The deal includes reducing the assumed rate of return to 6.9% from 8%; transitioning to level dollar amortization from level percent of payroll over five years; maintaining 2032 as the payoff date for the unfunded liability accrued through Dec. 31, 1983 (about $4.3 billion in unfunded liability); and extending the amortization period for the balance of the unfunded liability to 2046 from 2032.
Connecticut Speaker of the House Joe Aresimowicz said in a statement: “This agreement has the endorsement of the major bond rating agencies and our business community, and will benefit Connecticut taxpayers for years to come by improving the fiscal stability of the long-term obligations of the state. Gov. (John G.) Rowland started us down this path in the early 1990s by deferring future obligations, and it is good to see all sides working together now to help get us back on track.”
Following the votes, Mr. Malloy said in a statement: “This agreement was created to help put our state's finances on a path toward stability and predictability, which we need to create confidence and growth.”
The new agreement does not affect benefits or employee contributions, and does not affect the other retirement systems that make up the $30.1 billion Connecticut Retirement Plans & Trust Funds, Hartford, said Larry Perosino, spokesman for House Democrats.