OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 ↓ (860) 240-0200
AN ACT ESTABLISHING A RETIREMENT SAVINGS PLAN FOR LOW-INCOME PRIVATE SECTOR WORKERS.
LCO No.: 8026
File Copy No.: 309
Senate Calendar No.: 234
OFA Fiscal Note
The amendment does not result in a fiscal impact to the state in FY 14 and FY 15 as current pension benefits are governed by a collective bargaining agreement between the state and the State Employee Bargaining Agent Coalition (SEBAC) which is in effect until 2022. New employees hired after July 1, 2011 are governed by the current pension agreement and enrolled in Tier III of the State Employee's Retirement System.
It is unclear what the impact of eliminating pension negotiations from statute will have on implementing a defined contribution plan for employees hired after the expiration of the current pension agreement. Under current law when an agreement is in conflict with statute, the provisions of the agreement supersede statute (CGS Sec. 5-278(e)). The provisions of the current agreement are in place until a subsequent agreement is negotiated. However, the amendment would prohibit negotiating pension provisions in any subsequent agreement.
In addition, Section 5-278 (f) codified provisions of the Pension Agreement first agreed to in 1989, which included the requirement that the state and SEBAC negotiate pension benefits. Subsequent SEBAC agreements have extended this provision and therefore it is assumed this provision of the amendment would have to collectively bargained in order to align the provisions of the amendment with what is currently collective bargained.
The fiscal impact in 2022 will depend on whether or not a defined contribution plan is implemented for new employees and what the cost or savings to the state is from implementing the new retirement plan.
The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.