Jan. 24, 2012: Governor Dannel P. Malloy announced a proposed change in the state’s pension-funding plan intended to stabilize the fund over the long term.
Malloy's plan to shore up a woefully under-funded pension system includes eliminating the SEBAC 4 and 5 provisions on pension funding. These provisions were part of the 1997 agreement with former Gov. Rowland and allowed the state to backload its contributions.
Eliminating these deductions will increase the state's annually required contribution (ARC) by about $125 in the next fiscal year and similar amounts in future years. All told, the savings to taxpayers will be about $5.8 billion -- with no negative changes to the plan design and benefits.
"What the governor has proposed is not a concession," said Council 4 Executive Director Sal Luciano. "In fact, it will securitize state employee pensions over the long term, to the benefit of beneficiaries and taxpayers alike."
Update: On Feb. 3, 2012, SEBAC leadership and the State signed an agreement permitting the State to increase the actuarial required contribution (ARC) to pension fund. This agreement was submitted in resolution form to House and Senate.