“Neither lawmakers nor taxpayers can hide from the costs any longer.”
HARTFORD, CT – Marisa Manley, independent (unaffiliated) candidate for Connecticut governor, said today that the solution to fixing the State’s underfunded pension system must start with a fundamental restructuring.
A recent report by the American Legislative Exchange Council found that Connecticut had the worst pension system in the nation - $127.7 billion in liabilities, leaving the pension system only 19 percent funded.
“We must have the will to totally restructure the system with appropriate controls on costs, as well as more flexibility and earlier vesting for employees,” Manley said.
Manley, the owner of a commercial real estate company and Harvard Law School graduate, added, “Payments on the enormous debt for these underfunded pension programs benefit the approximately three percent of Connecticut’s population that consists of current state employees and retired state employees, while they absorb budget funds that could otherwise be spent on road maintenance, safer bridges, and better education.”
The state is only one of four to set retiree benefits through collective bargaining. It is the only state where the legislature doesn't have to consent to contracts.
According to the State Comptroller Office, more than 48,000 retired Connecticut state employees drew a total of $1.8 billion in pensions during 2017. Two retired state works drew more than $300,000 pensions last year and more than 1,400 had pensions of $100,000 or more.
“Under my administration, practices which inflate pensionable salaries will be eliminated; true safety-nets will be preserved, and employees will benefit from portability,” she said.
A report published by Harvard University analysts also warned there is “significant risk” Connecticut will again look to extend those surging costs well into the future, effectively creating a series of “permanent high costs” that strip resources from other segments of the state budget.
“The years of underfunding those pension plans are catching up with Connecticut, and neither lawmakers nor taxpayers can hide from the costs any longer,” Manley said.
“Taxpayers are voting with their feet. Connecticut is one of only a few states with a consistent net loss of population. It’s time for a real solution” she said.
As governor, Manley will seek a lump-sum buyout of the accrued liabilities for all retirees and employees currently in the state’s defined benefit pension plans. These buyouts will be deposited in individual retirement accounts for each employee or pensioner with a variety of investment options.
Going forward, all pension plans will be defined contribution plans--similar to the 401(k) plans most private sector employees enjoy – and fully funded annually. These changes will be coupled with true implementation of the constitutional spending cap passed in 1991, but allowed to languish.
“My comprehensive restructuring of the pension plans will reduce debt, reduce taxes, assure that liabilities are under control for the long term, and give Connecticut new credibility in the financial markets,” Manley said.
“As governor, I will provide greater transparency and fairness to taxpayers. Taxpayer representatives as well as union members will participate in pension negotiations. I will preserve the pensions of retirees and current state employees by creating sustainable programs with a more certain payout,” she said.
“This fundamental restructuring of our pension plans is the first, necessary step to resolving Connecticut’s financial crisis, and restoring growth and opportunity.”
Learn more at http://www.manleyforct.com
Paid for by Manley for Connecticut. Pattie von Gretener, Treasurer. Approved by Marisa Manley.