Posted on 12/16/2017 5:51:05 PM PST by george76
Connecticut has the most underfunded pension system in the nation, amassing more than $127.7 billion in liabilities..
The study entitled Unaccountable and Unaffordable showed Connecticut’s pension system dropping below Illinois and Kentucky when its pension liabilities were calculated with a “risk-free” discount rate equal to the rate of a U.S. Treasury bond.
Connecticut’s unfunded pension liability rose from $99.2 billion in ALEC’s 2016 study to $127.7 billion in 2017, leaving the pension system only 19 percent funded.
The debt from the public pensions amounts to $35,721 per person in Connecticut, the second highest per capita debt in the nation behind Alaska.
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Connecticut’s pensions are part of the state’s “fixed costs” of pensions, retiree healthcare and debt service, which now comprise over 50 percent of the state budget, crowding out other state services or forcing tax increases to continue funding those services.
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Tax revenue has also been stagnant and, in some cases, falling below state projections, leaving large deficits which lawmakers then scramble to fix with either service cuts or more tax increases.
Although lawmakers can change teacher pensions through legislative action, state employee pensions are set through collective bargaining. The SEBAC benefits contract, first signed in 1997, was extended until 2027 through a union concessions deal Malloy made with union leaders earlier this year.
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Although Connecticut ranked as one of the worst states for its unfunded pension liabilities, every state had underfunded their pensions and used overly optimistic discount rates. The total liability for all 280 state-administered pension plans included in the study exceeds $6 trillion.
“The most effective way to prevent Connecticut’s pension crisis from deepening,” Powers said, “is to remove the states ability to underestimate its liabilities by switching new hires to a defined contribution plan, as Pennsylvania has for hires 2019 and later.”
(Excerpt) Read more at yankeeinstitute.org ...
Tom had two votes from this household back when.
I am posting today, Dec. 28th, after hearing about the 6.99% pension withholding trick just unveiled for CT.
I don’t see a thread on that yet.
At that time, I was single and I was at the campaign headquarters most days. It was a great time, I had fun and the Courant had a picture of me when we heard the Republicans won the house.
Time for consolidation. In Massachusetts there are a few county systems and the one for Commonwealth employees. Simpler and not in quite as bad shape as most of our neighbors.
Isn’t Illinois short by $151B? I read that earlier today.
Isn’t Illinois short by $151B? I read that earlier today.
I think almost all government pension systems are underfunded, but of course, some more than others.
We had a County Commissioner who tried to get free lifetime health insurance benefits for all Commissioners (elected to four-year terms). Fortunately, the word got out, and he narrowly escaped a community beatdown.
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