HARTFORD, Conn. (WTNH) — The retirement plan for city and town workers in more than 100 Connecticut towns just got a major overhaul that could save taxpayers more than $800 million, according to state leaders.
Gov. Ned Lamont, State Comptroller Sean Scanlon and other local government leaders held a press conference on Wednesday to announce that a deal to revamp the Connecticut Municipal Employees Retirement System (CMERS) has been reached.
The system is the state-run pension plan for municipal public sector employees including police officers, firefighters, board of education and public works employees.
Government officials said the new agreement will save 107 Connecticut cities and towns $32,369,00 in the fiscal year of 2024. Over the next 31 years, it may save taxpayers more than 843 million dollars.
“We have reached a deal of six things that will over the course of the next 30 years reduce the pension contribution liability of 107 cities and towns by 843 million dollars,” Connecticut Comptroller Sean Scanlon said.
Shortly after taking office, Scanlon created a working group of labor and municipal leaders to address the rising cost of the Connecticut Municipal Employee Retirement System.
According to officials, employer contribution rates have increased by 75% in the last five years. The Connecticut Municipal Employee Retirement System’s unfunded liability hit $1.1 billion.
Government officials said the working group agreed to six reforms after a month of negotiations. Several reforms will provide immediate relief to municipalities by stabilizing the fund to level out employer contributions in the future.
“During a time when pensions and benefits are under attack, and have been eroded over the past decade, we are excited that this agreement is a win for the municipality, a win for the board of ed employee, and a win for municipalities and taxpayers,” said Jody Barr, executive director of the AFSCME Public Service Union.
Government officials said the working group will align the cost-of-living adjustments to reflect current industry practice and re-amortize the unfunded accrued liability from 17 to 25 years, expected to save over $32.3 million in 2024.
The working group said multiple reforms will encourage the retention of municipal employees and will increase the pension calculator multiple for those with longer service and offer a deferred retirement option plan (DROP.)
The working group also agreed to improve data collection on municipal pension plans offered in the state, to find the best practices to make plans attractive to new towns, according to officials.