An Act Concerning Pension And Health Care Reform.
The bill's reforms are substantial and are expected to have notable implications on state laws regarding retirement benefits. The provisions a) implement a five-year look-back for pension benefits, b) increase employee contributions by 4%, and c) suspend cost-of-living increases for pensions until state budget deficits are resolved. Furthermore, by 2019, new employees will be required to enroll in a 401(k) plan instead of the current defined benefit pension plan, shifting the retirement savings responsibility to individual workers rather than the state.
SB00143, titled 'An Act Concerning Pension and Health Care Reform,' was introduced to amend existing legislation concerning state employee pensions and health benefits. The bill proposes to exclude overtime and longevity payments from retirement benefit calculations effective July 1, 2018. Additionally, it sets a cap on state employee pensions at $100,000 or the amount earned as of the effective date, whichever is higher. These changes aim to restore fiscal stability to the state's budget by controlling the growth of pension liabilities and associated healthcare costs.
While the intent behind SB00143 is to improve the financial sustainability of state pensions, the bill has sparked discussions about its potential impact on current and future employees. Critics argue that increasing copays and deductibles for health insurance may disproportionately affect state employees and that capping pensions could diminish the incentive for public service careers. There are concerns that the bill undermines the value of benefits promised to employees and could lead to higher employee turnover if their retirement security is compromised.