Welcome to the latest edition of This Week in Pensions! We have gathered the best stories about pensions and retirement security from the previous week. You need to know this news in the fight for a secure retirement.
CT Now Sitting On $4.1 Billion Budget Reserve
Connecticut has seen a massive windfall in the state’s rainy day fund, which now stands at $4.1 billion after legislators increased the amount of taxpayer dollars that can be held in reserve.
The Governor’s 2024 budget ended with $1.64 billion left over. This will increase the reserve from 15% of the General Fund to 18%.
The remainder, around $850 million, will be used to pay down state pension debt. The state entered the year with more than $7 billion in unfunded pension debt, and this will be an excellent step in helping to reduce the Unfunded Actuarial Liability (UAL).
One supporter of using of the budget reserve sooner rather than later is Democratic House Speaker Matt Ritter, who argues these funds can defend against spending reductions during economic crises.” There will come a day when that Budget Reserve Fund stops state government from making massive budget cuts.”
Including the funding allocated by the reserve, the state will have made $8.5 billion in contributions to the pension system since 2020. As the state continues to allocate the surplus funds towards the pension system, the UAL becomes increasingly manageable.
Chris Collibee, the spokesperson for the Governor’s budget, has said, “The state’s financial position is the best that we have seen in decades. Our collective responsibility is to maintain this position and continue to deliver for the residents of the state.” Collibee also noted that this will be the sixth consecutive year that Connecticut has used budget surplus to whittle down pension debt.
“Every month now, we are met with new evidence that shows how Gov. Lamont’s short-sighted fiscal controls are deepening racial, gender, and economic disparities,” said Norma Martinez-HoSang, director of CT For All. “While he touts financial stability, families are struggling to get by. Lamont needs to start caring more about the hard-working residents of Connecticut rather than the creditors on Wall Street.”
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