Connecticut Gov. Dannel Malloy (D) has unveiled proposals for changes to the state retirement plan that would affect both current and future state employees.
Current state employees would contribute more, and the state would contribute less, toward their pensions in fiscal year 2019 under the proposal. Malloy proposed that employees’ pension contributions increase by 2% of pay, while the state would pony up between $400 million and $500 million less, Reuters reports.
The proposals also would create a hybrid retirement plan for new state employees that would combine a defined benefit plan and a defined contribution plan, Pensions & Investments reports (registration required). A 1.3% multiplier would calculate the DB portion of the plan while employees would contribute 5%, or up to 7% if the return is less than 6.9%, P&I adds.
The proposal comes three months after Malloy proposed in the 2018-19 state budget that towns and cities in the Nutmeg State contribute to the cost of teacher pensions. In his February budget address, Malloy called the teachers’ retirement program “a sustainable, well-organized system,” and said that he was “not proposing that teachers’ benefits be limited or cut back.” He noted, however, that the burden of paying for it has not been equitably handled.
“Teachers retirement pension system has always been funded without any contribution from towns or cities,” Malloy said, and noted that “teachers are municipal employees” and that the state doesn’t pay the pensions of policemen, or firemen, or anyone else.” He added, “As such, my budget asks our towns and cities — all of them — to contribute one-third of the cost toward their teacher pensions.”
Current state employees would contribute more, and the state would contribute less, toward their pensions in fiscal year 2019 under the proposal. Malloy proposed that employees’ pension contributions increase by 2% of pay, while the state would pony up between $400 million and $500 million less, Reuters reports.
The proposals also would create a hybrid retirement plan for new state employees that would combine a defined benefit plan and a defined contribution plan, Pensions & Investments reports (registration required). A 1.3% multiplier would calculate the DB portion of the plan while employees would contribute 5%, or up to 7% if the return is less than 6.9%, P&I adds.
The proposal comes three months after Malloy proposed in the 2018-19 state budget that towns and cities in the Nutmeg State contribute to the cost of teacher pensions. In his February budget address, Malloy called the teachers’ retirement program “a sustainable, well-organized system,” and said that he was “not proposing that teachers’ benefits be limited or cut back.” He noted, however, that the burden of paying for it has not been equitably handled.
“Teachers retirement pension system has always been funded without any contribution from towns or cities,” Malloy said, and noted that “teachers are municipal employees” and that the state doesn’t pay the pensions of policemen, or firemen, or anyone else.” He added, “As such, my budget asks our towns and cities — all of them — to contribute one-third of the cost toward their teacher pensions.”
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