Comptroller Scanlon Announces Continued Progress Towards Paying Down Pension Debt
Report shows funded ratio above 50% for first time since 2008, reinforcing importance of fiscal guardrails
(HARTFORD, CT) – Comptroller Scanlon today announced the release of the State Employee Retirement System (SERS) Actuarial Valuation, which was approved by the State Retirement Commission this morning. This annual report states the progress that Connecticut has made towards paying down its SERS pension debt obligations, as well as the state’s legally required payment for the upcoming fiscal year (FY).
The valuation highlights the benefits and savings of the fiscal guardrails, or the bonding, revenue, and volatility caps enacted in 2017 and extended last legislative session. Roughly $1.05 billion was deposited into the SERS system this fall thanks to these reforms, which will reduce Connecticut’s payment obligations by $87.5 million for FY 25.
“In 2016, our state employee pension fund was just 35% funded,” said Comptroller Scanlon. “The next year, we adopted the fiscal guardrails that have helped get our fiscal house in order. As a result, we’ve paid down nearly $8 billion in pension debt, and that plan is now 52% funded, the highest it’s been since 2008. By adhering to the guardrails and paying off our debt, we are seeing immediate savings that has been put to other uses, such as a historic tax cut and investments in education, while also relieving the burden on future generations of Connecticut residents.”
This payment marks the fourth consecutive year that additional contributions have been made to pay down pension debt, totaling over $7 billion. Cumulatively, the fiscal guardrails and the deposits they have enabled us to make have freed up approximately $512 million annually in the budget ($738 million when combined with the Teachers’ Retirement System) to be budgeted elsewhere.
Highlighted yesterday in a bipartisan press conference with Governor Lamont and lawmakers, progress on these payments will not only save future generations millions, but they allowed the Governor to institute the largest tax cut in the state’s history for this upcoming year.Download as PDF More News