Gov. Malloy Statement on Reports of Costs Related to the Teachers’ Retirement System
(HARTFORD, CT) – Governor Dannel P. Malloy today released the following statement in response to recent reports of a memo from State Treasurer Denise L. Nappier citing the additional costs associated with recent changes to the Teachers’ Retirement System:
“I agree with Treasurer Nappier that any increase to Connecticut’s unfunded liabilities should be avoided at all cost. In fact, rather than adding to our liability, we need to take action to make our teachers’ retirement system more sustainable and more cost-effective for taxpayers – both now and well into the future. Changes my administration put forward last session would have made this system more affordable, more stable, and more able to absorb changes in the market. I will continue to advocate for these commonsense reforms in 2018 and look forward to working with the Treasurer and leaders in the General Assembly to lower all of Connecticut’s unfunded liabilities.
“Connecticut simply cannot afford annual payments of $4 to $6 billion into this fund – we must make smart reforms now to fix the system, and we can do it without curtailing benefits for teachers. If we don’t act, there will be no way to meet these obligations without hollowing out major state programs such as Medicaid and municipal aid. It’s that simple.”Governor Malloy proposed amortization and refinancing changes to the Teachers’ Retirement System in his FY18-FY19 budget proposal, which included extending the amortization period – similar to steps taken to the State Employees’ Retirement System in December 2016. The proposal would help the state avoid crippling Actuarially Determined Employer Contribution payments next decade without affecting benefits and while still paying the off the full amount of the unfunded liability. Without any action by the General Assembly, these payments are scheduled to double in the coming years, with the potential of quadrupling or quintupling in the 2030s.