Connecticut could feasibly transfer assets into a trust to benefit the state's pension funds to address a funding crisis, concluded a new report issued by Connecticut's Pension Sustainability Commission.
In the report, the commission recommends that the Connecticut state legislature provide specific policy guidelines before specific assets are considered for potential contribution to a trust. The report also concludes that the state treasurer should be the government office that provides oversight and direction on managing any kind of asset trust.
The commission also said using the proceeds of the Connecticut Lottery to benefit the state pension funds or the wholesale transfer of the state lottery as an asset to the funds is also feasible.
However, additional consideration about how either action would affect the pension funds' liquidity would require further study.
"The Commission recommends that, should the legislature wish to explore the specific concepts identified in this report further, that such work be conducted by either the Office of the State Treasurer and/or through the continuation of the existing Connecticut Pension Sustainability Commission in order to avoid duplicative work by another newly established state entity," the report said.
The 13-member commission was first established in October 2017 to "study the feasibility of placing state capital assets in a trust and maximizing those assets for the sole benefit of the state pension system," said the description on the state general assembly's website. It is looking to explore the legitimacy of a legacy obligation trust as a means of mitigating the unfunded liability of the $34 billion Connecticut Retirement Plans & Trust Funds, Hartford. The pension fund was about 45% funded as of April 2018, the most recent data available.
