Connecticut Senate Bill SB00245

Connecticut 2013 Regular Session

• Introduced: 1/22/13
• Refer: 1/22/13

Caption

An Act Concerning Pension Preservation.

Impact

The provisions of SB00245 will lead to all new state employees being required to participate in a defined contribution benefit plan rather than the traditional defined benefit plan. This shift represents a significant alteration in how retirement benefits are structured, placing the investment risk on employees rather than the state. Additionally, the bill mandates a review of current benefits and contribution levels within the retirement system to assess their adequacy and sustainability moving forward.

Summary

SB00245, titled the Pension Preservation Act, proposes significant amendments to the state's retirement benefit structure for public employees. This bill specifically seeks to reduce the assumed rate of return on investments within the State Employees Retirement Fund to align with federally mandated levels. By implementing this change, the legislation aims to ensure the long-term viability of the pension system and safeguard retirement benefits for future state retirees.

Contention

While the intentions behind SB00245 focus on preserving pension benefits, there is potential for contention around the implications of transitioning to a defined contribution plan. Critics may argue that this shift could lead to reduced retirement security for employees who may not have the financial literacy or resources to effectively manage their contributions and investments. Consequently, the discussions surrounding this bill might emphasize the balance between ensuring a sustainable pension system and preserving the reliable retirement benefits that state employees have come to expect.