(The Center Square) – A historical payment is headed to Connecticut’s pension plan.
State Comptroller Natalie Braswell is in the process of transferring $3.1 billion from the state’s operating surplus into the rainy day fund, triggering a one-time, special payment of $2.8 billion into the state’s unfunded pension liabilities, Gov. Ned Lamont said.
“Connecticut’s pension liabilities have been decades in the making and are the result of decisions by officials no longer in office who decided that it would be easier to kick the can down the road rather than make the tough choices that the state needed at the time,” Lamont said in a release. “This move today is what Connecticut has needed to do for many years and brings the state on firmer financial ground than we’ve seen in a generation.
Lamont went on to say that since he took office he made it “a top priority to address our unfunded obligations” and move the state fiscally into a position to grow the economy.
According to the release, the payment into the pension funds is the largest in state history. The payment is on top of the state’s required appropriations into pension funds.
The move, according to the release, will save taxpayers $6 billion over the next quarter-century, the Office of Policy and Management estimated.
“Gov. Lamont is the first governor in the history of Connecticut’s modern pension system to make additional payments to reduce the state’s unfunded pension liabilities,” OPM Secretary Jeffrey Beckham said in a release. “These historic payments are the direct result of a sustainable combination of tax cuts, spending cuts, and investments in our businesses and residents that have helped to grow our economy. With global economic uncertainty ahead, these additional payments, along with our budget reserve fund, will help to fortify our state budget against a future possible economic downturn.”
Under Public Act 22-118, Section 229, according to the release, the payment will consist of $1.9 billion into the State Employees Retirement Fund and $900 million into the Teachers’ Retirement Fund. More deposits into pension funds will be coming later in the year.
State statutes, according to the release, mandate that when budget reserves accumulate to more than 15% of general fund appropriations, excess revenue amounts are to be transferred to pension liabilities. In 2021, $1.623 billion was transferred into funds and $61.6 million was transferred in 2020, the only other times the state has done so.