Gov. Dannel P. Malloy released the following statement after his office and representatives from the State Employees Bargaining Agent Coalition (SEBAC) announced on Friday that "after months of productive negotiations between the administration and SEBAC representatives, an agreement has been reached to modify the funding calculation and amortization schedule for the State Employee Retirement System (SERS) to help avoid the fiscal cliff the state would otherwise face in the coming years."
“I am very grateful to SEBAC leadership that we were able to reach this much-needed and forward-looking agreement. It was incumbent upon us to reform this system before facing the fiscal crisis that could have resulted from $4 to $6-billion-dollar annual ARC payments. This agreement does not alter employee benefits or employee contributions in any way – it simply allows the state to fully fund its obligations at realistic amounts that will end with Connecticut resolving the unfunded liability and emerging with a system that is fully funded. We are holding true to the ideal of improving the financial landscape for future generations.”
Senate Republican Leader Len Fasano (R-North Haven) released the following statement regarding the pension financing proposal released by Governor Dannel P. Malloy on Friday:
“This is an incomplete bailout of a pension system that’s completely out of control. Simply refinancing our debt is not the structural change we need to change the direction of our state. This package will add billions of dollars in new costs onto taxpayers beyond what is reflected in the governor’s summary. It’s not a solution and taxpayers deserve better.
“We are in this mess because over the last six years Democrats who had complete control of our state didn’t want to address this issue. Lawmakers need to get serious about looking at the whole picture. We need a two pronged approach that not only looks at how to pay for past debts, but that makes structural changes to state benefits to get future spending under control. You can’t call refinancing a solution. You can’t add extra costs onto taxpayers that they will have to bear forever without also offering changes to provide future relief and reduce expenses.
“Standard & Poor’s has already raised concerns about proposals to increase and extend unfunded liabilities. If this credit rating agency didn’t like this idea the first time they heard it, what makes anyone think they will view it differently now? This could prompt further downgrades, which could put all our state’s borrowing at risk. We have to be aware of these risks and we need actuarial analyses on the impact of this proposal over time. This plan absolutely must come before the legislature for a vote.”
Lt. Governor Nancy Wyman released this statement on the new plan:
“I applaud Governor Malloy and SEBAC for finding resolution to these very complex issues. These negotiations highlight how committed we all are to addressing the budget challenges facing the state – keeping our promises to the men and women who have given years of service to Connecticut, and ensuring budget sustainability. I congratulate the Governor and SEBAC on this success and thank them for their work,” said.
Office of Policy and Management Secretary Ben Barnes said the following about the new plan:
“Under the new methodology, the state will remain on schedule to vanquish $4.3 billion in unfunded liability by 2032 and will resolve the remainder of the unfunded liability by 2046 – but with the ARC smoothing out over the new 30-year schedule to remain between $1.5 billion and about $2.3 billion, providing much needed stability and predictability to the budget and to the marketplace,” . “I would like to thank the leadership of SEBAC for being great partners throughout this process and helping us reach an agreement that will improve the state’s finances and help support the SERS system into the foreseeable future. I would also like to thank Treasurer Denise Nappier and Comptroller Kevin Lembo for their contributions.”
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