OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http://www.cga.ct.gov/ofa

sHB-5591

AN ACT CREATING THE CONNECTICUT RETIREMENT SECURITY PROGRAM.

AMENDMENT

LCO No.: 5673

File Copy No.: 747

House Calendar No.: 227

Senate Calendar No.: 522

OFA Fiscal Note

State Impact: See Below

Municipal Impact: None

Explanation

The amendment strikes the underlying bill and its associated fiscal impact. The amendment does not result in a fiscal impact to the state in FY 17 and is not anticipated to result in a fiscal impact in FY 18 as (1) 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 and (2) the FY 17 actuarially determined employer contribution was established as of the June 30. 2014 actuarial valuation and will remain unchanged.

New employees hired after passage of the amendment are governed under the terms of the current pension agreement and enrolled in Tier III of the State Employee Retirement System if applicable. Non-union employees have historically been governed by the terms of SEBAC agreements concerning pension, it is uncertain if the provisions of the amendment can be applied to this subset of employees. There may be a fiscal impact in FY 18 if the provisions of the amendment can be implemented for non-union employees.

The fiscal impact in 2022 will depend on whether or not a defined contribution plan is implemented for state employees and what the cost or savings to the state is from implementing the new retirement plan.

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.

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. Therefore the provisions of the amendment would have to collectively bargained in order to align the provisions of the amendment with what is currently collective bargained.

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.