Connecticut Senate Bill SB00371

Connecticut 2017 Regular Session

• Introduced: 1/19/17
• Refer: 1/19/17

Caption

An Act Excluding Overtime Pay From The Calculation Of State Employee Pension Benefits.

Impact

If enacted, SB00371 would significantly alter how pension benefits are calculated for state employees, thus potentially affecting the financial landscape for many current and future employees. This exclusion could lead to lower pension payouts for those who frequently work overtime, necessitating adjustments in financial planning for employees nearing retirement. The bill reflects a growing concern among lawmakers about the rising costs associated with state employee pensions, particularly those stemming from inflated final salary figures due to overtime.

Summary

Senate Bill 00371 aims to amend the existing state statutes regarding the calculation of pension benefits for state employees by excluding overtime pay from being considered as part of the salary. The primary purpose of this legislation is to put an end to the practice known as 'pension padding', where employees increase their pension benefits substantially by including significant amounts of overtime pay accrued shortly before retirement in their salary calculations.

Contention

There are likely to be varied opinions about the implications of SB00371. Proponents argue that the bill is a necessary measure to prevent fraudulent practices that exploit the pension system, ensuring fairness and fiscal responsibility. Conversely, critics might contend that the bill could disproportionately affect long-serving employees who rely on overtime compensation to reach their expected retirement income, arguing that it could disincentivize employees from working hard and earning additional pay.