Connecticut Senate Bill SJ00005

Connecticut 2021 Regular Session

• Introduced: 1/12/21
• Refer: 1/12/21

Caption

Resolution Proposing An Amendment To The Connecticut Constitution To Require The Establishment And Funding Of Shared-risk Pension Plans For State Employees And Teachers.

Impact

If enacted, this bill will have significant implications for how pension plans are structured for state employees and teachers. By introducing shared-risk pension plans, the state seeks to transition away from traditional defined benefit plans, which can pose substantial financial risks to state budgets during economic downturns. The requirement for the General Assembly to fully fund these plans each fiscal year aims to prevent underfunding, which has been a persistent issue in many public pension systems throughout the country.

Summary

SJ00005 proposes an amendment to the Connecticut Constitution that mandates the establishment and funding of shared-risk pension plans specifically for state employees and teachers. The bill aims to address and potentially reduce the financial burden associated with state pension costs by implementing a system where risks and benefits are shared between the state and pension plan participants. This change is envisioned as a means to stabilize state pension funding while ensuring that obligations to employees and teachers are adequately met in the long term.

Contention

The discussions surrounding SJ00005 may center on the feasibility of shared-risk pension plans and the implications for current employees and retirees. Proponents argue that these plans will create a more sustainable and predictable funding model, reducing the likelihood of shortfalls. However, critics may voice concerns regarding potential changes in benefits and security for state employees and teachers, as shared-risk plans could result in fluctuating payouts based on investment performance and economic conditions. This debate touches on broader issues of fiscal responsibility, public sector employee rights, and the role of the state in providing retirement security.