Connecticut Seal

General Assembly

Amendment

 

February Session, 2014

LCO No. 4995

   
 

*SB0024904995SRO*

Offered by:

 

SEN. MCKINNEY, 28th Dist.

SEN. FRANTZ, 36th Dist.

SEN. MCLACHLAN, 24th Dist.

SEN. WELCH, 31st Dist.

 

To: Senate Bill No. 249

File No. 276

Cal. No. 216

(As Amended by Senate Amendment Schedule "A")

"AN ACT PROMOTING RETIREMENT SAVINGS. "

After the last section, add the following and renumber sections and internal references accordingly:

"Sec. 501. (NEW) (Effective from passage) (a) The General Assembly hereby finds:

(1) Whereas, Connecticut has the second highest unfunded pension liability in the country;

(2) Whereas, Connecticut's unfunded pension liability exceeds thirteen billion three hundred million dollars;

(3) Whereas, Connecticut taxpayers contribute more towards state employee pensions than taxpayers in almost all other states, with a taxpayer to employee funding ratio at least twice the national average;

(4) Whereas, Connecticut has the third highest state and local tax burden as a share of income;

(5) Whereas, "Tax Freedom Day" for Connecticut residents falls later than any other state, May ninth, causing them to work longer than residents of any other state simply to pay their federal, state and local taxes;

(6) Whereas, the biennial budget for the fiscal years commencing July 1, 2010 and July 1, 2011, raised state taxes by two billion six hundred million dollars;

(7) Whereas, despite this tax increase, revenue fell in the most recent quarter coming in four hundred sixty-one million dollars below projections;

(8) Whereas, just two years after raising taxes by two billion six hundred million dollars, Connecticut faces yet another two billion seven hundred million dollar out-year deficit;

(9) Whereas, because of declining revenues, the state's planned one hundred million dollar contribution to the state employee pension fund has been cancelled, exacerbating our long term liability;

(10) Whereas, Connecticut is one of few states to make pensions a mandatory subject of collective bargaining, ceding legislative authority and responsibility to the executive branch; and

(11) Whereas, Connecticut residents cannot bear additional tax increases or increased debt without threatening their economic welfare and the economic stability of the state.

(b) Now therefore, it is hereby found and declared that there exists a severe financial emergency in Connecticut and that in light of the state's accumulating deficit, long term liabilities and unsustainable employee obligations, it is necessary and in the public interest to modify the state's employee pension system so that the state can meet its long term commitments to all state employees while protecting the state's financial integrity, economic stability and competitiveness for all its residents. Therefore, the following changes in sections 502 to 504, inclusive, of this act are hereby declared as a matter of legislative determination to be reasonable and necessary to implement an important public purpose.

Sec. 502. (NEW) (Effective from passage) Notwithstanding any provision of chapter 66 of the general statutes to the contrary and notwithstanding the terms of any collective bargaining agreement, the Comptroller shall establish, not later than October 1, 2014, an employee defined contribution plan described in Section 401(k) of the Internal Revenue Code of 1986, or any subsequent internal revenue code of the United States, as from time to time amended, whereby each employee, as defined in section 5-196 of the general statutes, hired on or after October 1, 2014, shall participate in said plan in lieu of any retirement program established pursuant to chapter 66 of the general statutes.

Sec. 503. Subsection (l) of section 5-154 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(l) "State employee" means a person in state service, either appointive or elective, who begins such service prior to October 1, 2014;

Sec. 504. Subsection (f) of section 5-278 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to any state employee bargaining agent coalition agreement commencing on or after July 1, 2014):

(f) (1) Notwithstanding any other provision of this chapter, collective bargaining negotiations [concerning changes to the state employees retirement system to be effective on and after July 1, 1988, and collective bargaining negotiations] concerning health and welfare benefits to be effective on and after July 1, 1994, shall be conducted between the employer and a coalition committee which represents all state employees who are members of any designated employee organization. (2) The provisions of subdivision (1) of this subsection shall not be construed to prevent the employer and any designated employee organization from bargaining directly with each other on matters related to the state employees [retirement system and] health and welfare benefits whenever the parties jointly agree that such matters are unique to the particular bargaining unit. (3) The provisions of subdivision (1) of this subsection shall not be construed to prevent the employer and representatives of employee organizations from dealing with any state-wide issue using the procedure established in said subdivision. "

This act shall take effect as follows and shall amend the following sections:

Sec. 501

from passage

New section

Sec. 502

from passage

New section

Sec. 503

from passage

5-154(l)

Sec. 504

from passage and applicable to any state employee bargaining agent coalition agreement commencing on or after July 1, 2014

5-278(f)