Labor and Public Employees Committee

SENATE FAVORABLE REPORT

Bill No.:

SB-746

Title:

AN ACT AMENDING THE MUNICIPAL EMPLOYMENT RETIREMENT SYSTEM FOR NEWLY HIRED EMPLOYEES.

Vote Date:

3/9/2017

Vote Action:

Senate Favorable

PH Date:

2/21/2017

File No.:

SPONSORS OF BILL:

Labor and Public Employees Committee

REASONS FOR BILL:

The Municipal Employee Retirement System for newly hired employees requires updating.

RESPONSE FROM ADMINISTRATION/AGENCY:

Senator Leonard A. Fasano, Senate Republican President Pro Tempore

This bill enables municipalities to implement reforms for new employees so they can better stabilize their pension systems and rein in costs. It would ensure these pension funds are solvent and protected and thereby give employees peace of mind.

NATURE AND SOURCES OF SUPPORT:

Daniel C. Giungi, Senior Legislative Associate, Connecticut Council of Municipalities

This bill provides much needed updates to the Municipal Employee Retirement System (MERS). Financed through employer/ employee contributions and fund earnings, these changes are reasonable measures to help municipalities provide benefits to their employees.

Changes would include increasing the retirement age to sixty-two, exclude overtime from retirement benefit calculations, limit cost-of–living increases to between zero and 4%, increase employee contributions and create a tier consistent with state employee retirement system tier III for new eligible employees.

Betsy Gara. Executive Director, Connecticut Council of Small Towns

The imbalance in funding the Municipal Employees Retirement System is straining the budgets of municipalities, forcing reductions in critical services or increases in property taxes.

Municipalities participating in CMERS are not permitted to negotiate and have no other recourse or mechanisms for negotiating changes. The state has adjusted employee retirement plans and contribution rates several times. New employees hired after July 1, 2011 should be afforded the same opportunities to adjust their plan options.

Francis R. Pickering, Executive Director, Western Connecticut Council of Governments

The common sense changes in this bill will help to create sustainability in the retirement system as well as improve fiscal stability and confidence in local government. These are preconditions for business growth and economic recovery in the state.

NATURE AND SOURCES OF OPPOSITION:

Stephen Anderson, President, CSEA SEIU Local 2001

They oppose this bill because it would weaken pension benefits for newly hired municipal employees, remove overtime from pension calculations, raise the retirement age, increase contributions and limit any cost of living increases. This lowering of standards moves Connecticut in the wrong direction and retirees.

Christopher M. Haley, Union Professional Firefighter

Like thousands of other workers, he has sacrificed and compromised repeatedly to negotiate so municipal and state leaders could meet their budget demands. This bill would set a precedent for future workers who will no longer have the security of Collective Bargaining. Financial mismanagement has caused budget gaps to widen and expand. This was not created by Connecticut workers. Penalizing hard working families is not the definition of fiscal responsibility.

Lori J. Pelletier, President, CT AFL-CIO

Ms. Pelletier's testimony opposes this bill. The CT. Municipal Employees Retirement
System has been a successful partnership between municipalities and enrolled employees and is an affordable mechanism providing meaningful deferred compression so public servants can retire in dignity. Employers and employees have acted responsibility and faithfully made their contributions to MERS. The pension is over 90% funded and is very stable. There is no urgency that would justify changes at this time.

Stacey Zimmerman, Council, SEIU

This bill, among others, attacks collective bargaining and the standards of working families and would push the state back to the 18th century . The budget is suffering because the economy and communities are suffering. Removing health care and pensions form the scope of collective bargaining would virtually ensure a freefall in the quality of retirement benefits both in the public and private sectors in CT. Lowering the standards will make our economy more ineffective and the state budget problems worse.

Reported by: Marie Knudsen

Date: March 22, 2017