Governor discusses pension restructuring plan - WFSB 3 Connecticut

Governor discusses pension restructuring plan

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Controversy is swirling around the passage of a new state pension plan.

While the deal does prevent Connecticut from coming face to face with a $6 billion burden it is not prepared for, others are upset because there is currently no plan in place to create a solution.

The plan that was passed on Wednesday saves money in the short term, but it does mean that residents in their 20s, teens and newborns will have to deal with it years from now.

According to a 2016 CNBC study, Connecticut's pension debt equaled $14,769 per person, which is more than tripling the national average of $4,383.

In a 40 year deal reached under Gov. Lowell Weicker back in 1992, the state would owe a balloon payment as high as $6 billion per year to the pension fund.

"No one in this room, on one in this state believe we could afford to pay $6 billion toward pensions. Our total spending package is about $18 billion," said Gov. Dannel Malloy.

His plan leaves benefits or contributions of any current employee or retiree untouched. It funds pensions by spreading out payments.

33% of each tax dollar goes to funding pensions and healthcare fore retired state employees. Republicans said it now extends Weicker's plan to 2046.

"I think there are a lot of state employees who are wondering what will be left for them if we do not get these reforms under control," explained Rep. Melissa Ziobron.

She wants state employees to pay 4% into their pension, which she knows is on the low end. "If you look at the national average for the amount of employees contribute to their pensions, we're seeing between 6-7%," said Ziobron.

She believes that would save the state $75 million. She is envisioning a bleak future if changes are not made.

"It's going to be very tough if they are not able to control some of these structural reforms that are needed because we are going to have more and more balloon payments over the years."

Since the initial deal was made more than 20 years ago, Gov. Malloy has inherited the backed end of it. He said he had to fund the pensions by about $1 billion and make drastic cuts along the way.

He is looking for accountability from the administrations in between that he said could have guided the state away from this situation.

"Everybody out there is complaining about the terrible things I've had to do. Yet, republicans were presented with an opportunity and rather than being part of the answer, they elected to be part of the problem," said Malloy.

It was a very tight vote on Wednesday. Since the state senate was tided, Lt. Gov. Nancy Wyman was the one who cast the tie-breaking vote.

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