State leaders are aiming to fix a system they say is broken.
“I say broken because for years our cities and towns across Connecticut have been seeing astronomical increases to the pension cost, they have in their communities,” State Comptroller Sean Scanlon said.
After six weeks of discussion, State Comptroller Sean Scanlon, along with municipal and workforce leaders announced they have reached a deal to change the Connecticut Municipal Employees Retirement System, known as CMERS.
CMERS is a state-run pension plan for town and city employees, including police officers, firefighters, boards of education and public works employees.
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“We have reached a deal of six things that will over the course of the next 30 years reduce the pension contribution liability of 107 of our towns by $843 million,” Scanlon said.
The savings to an impacted town like Windsor Locks would be immediate.
“What does this deal mean for a small town like Windsor Locks, 12,800 people, this year alone starting fiscal year July 1st, the town of Windsor Locks will save a half a million dollars. An expense we had budgeted for, we now get to take that out of our budget and potentially not cut that teacher that was potentially on the chopping block, that police officer, that firefighter, that is huge,” Windsor Locks First Selectman Paul Harrington said.
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One of the six reforms includes incentivizing workers to stay in their jobs longer by increasing their pension payout and offering a deferred retirement option plan.
Another reform would change when retirees would start receiving their cost-of-living adjustments, or COLA. Currently, town and city employees who retire, receive a COLA immediately on the July 1 after they retire.
Under the new plan, retirees will receive a cost-of-living adjustment the July 1 following 12 months of retirement.
In addition, Scanlon said the amount of time towns have to pay back the unfunded pension fund liability will be extended from 17 to 25 years.
“We are not changing any benefits; we are not taking anything away from anyone. We are working with labor and municipalities to try to make this fund healthier, so that more people can continue to rely on this pension fund for many years to come,” Scanlon said.
Legislators are expected to introduce a bill this session, with the language announced Wednesday.
If passed, the new deal would apply to employees who retire after July 1, 2025.
