Time for the Legislature to Step Up

In January, the newly elected Connecticut legislature will have to consider whether to reduce the amount of each annual payment due into the state’s pension fund from 2017 through 2032. To achieve full funding under current law, the state has to make up deficient payments to the pension fund by paying the required amount plus an increasing catch-up amount every year until 2032. The current schedule would result in the pension fund being fully funded by 2032. The new agreement would defer $13.4 billion of the catch-up amount and add it to the amount payable to the pension fund after 2032. However, such a new schedule would delay the full funding of the pension fund by an additional 13 years, to 2045.

Why would the state do this? So that it can have less pressure on the budget for current years. That would be the ultimate “kick the can down the road” maneuver. In 16 years, when a new payment schedule would have to be adopted, it would be another governor’s problem, and most of the legislators voting on the issue now will have retired to collect their pensions.