State Senator Art Linares announced that the legislature’s Appropriations Committee approved a bill he requested to study the long-term financial impact of state employees’ and elected officials’ pay and benefit compensation on the state. The bill now moves to the Senate for consideration.
“Connecticut has been in a state of fiscal crisis for the last several years with budget deficit after budget deficit. This is despite the two largest tax increases in the state’s history,” Sen. Linares said. “We have to look at the state’s fixed costs and why they have gotten so far out of control.”
Sen. Linares said a review of state employee and elected officials compensation could examine ways to save money when the current state employee contract ends in 2027.
“I believe one area that should be considered is capping pension payout at $100,000 a year. The number of retirees receiving pension payments in excess of $100,000 has been growing at an unsustainable rate,” he said. “What do we tell the rank-and-file employees receiving smaller pensions when the pension fund is drained by retirees receiving six-figure payments? We have to make sure the pension plan stays solvent for all retirees.”
Currently, more than 1,400 retirees collect annual pensions in excess of $100,000, Sen. Linares said. The highest paid retiree received more than $300,000 a year.
“Retirement payouts like this were unheard of in the private sector even before most businesses moved away from pensions. Now employees and employers contribute to 401K-type plans,” he said. “We also have to remember that pensions are not the only form of retirement income state retirees receive. They contributed to and can collect Social Security.”
Sen. Linares said he also believes the lowering the expected return on investment in the fund from 8percent to 6 percent should be considered. The 10-year return for the 41 largest state pension funds was 6.59 percent.
“State employees, like their private sector counterparts, work hard to earn the paychecks they receive. We need to ensure that each of them receives the retirement funding they earn, by making sure the pension fund does not run dry due to the excessive pensions of a few,” he said. “I believe a comprehensive review of benefits that includes a $100,000 cap on pensions after 2027 will do that.”
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