Connecticut House Bill HB06089

Connecticut 2017 Regular Session

• Introduced: 1/20/17
• Refer: 1/20/17

Caption

An Act Concerning Defined Contribution Retirement Plans For New State Employees.

Impact

By mandating the participation of new state hires in defined contribution plans, HB 06089 could significantly alter the landscape of state employee benefits. This change is expected to provide greater flexibility for employees in managing their retirement savings, as defined contribution plans typically allow individuals to control their investment choices. However, it would also imply that the state would not be liable for guaranteeing a fixed retirement income, which is a hallmark of traditional pension systems. Legislators believe this shift could mitigate long-term financial liabilities for the state.

Summary

House Bill 06089 aims to introduce a defined contribution retirement plan for all new state employees and officials hired after the bill's effective date. This legislative proposal seeks to amend existing state statutes to shift away from traditional pension plans towards a defined contribution structure. The goal of this bill is to alleviate the financial burden associated with state pension costs, thereby offering a more sustainable retirement benefit model for future employees.

Contention

Opponents of the bill may argue that while defined contribution plans can be beneficial in managing immediate pension costs, they place more financial risk on employees who must navigate market fluctuations to secure their retirement. Critics may also voice concerns that such a shift could lead to reduced retirement security for state employees when compared to the reliability and stability offered by traditional pension systems. Furthermore, questions about the adequacy of retirement savings under these new plans could fuel ongoing debates about employee benefits within state governance.