One day after Gov. Dannel P. Malloy promised to contribute more money to the woefully underfunded state employee pension system, Republican Sens. Andrew Roraback and Sen. Jason Welch made a controversial pitch to change how state employees negotiate their pensions.
At a Capitol press conference Roraback and Welch said they want to remove pensions from collective bargaining for all new state employees and they want to change how pensions are calculated by lowering the amount of overtime and longevity included in those final calculations.
The later was pitched by Malloy himself after the first State Employees Bargaining Agent Coalition agreement vote failed this summer. Determined to whittle away at the state’s unfunded pension liability without $1.6 billion in concessions from the labor unions, Malloy proposed changing how pensions are calculated. The legislation passed the Senate, but never made it to a vote in the House.
The bill Malloy proposed focused largely on eliminating longevity payments for state employees not yet eligible for them and freezing longevity payments for those already receiving them. It would have also changed the definition of “salary” for pension calculations in order to exclude overtime, longevity, fees or any other payment after the contract expired in 2017.
The current SEBAC agreement which was finally approved in August doesn’t expire until 2022.
“We already have an agreement,” Malloy said Tuesday when asked if he would support changes to pension calculations. “We’re not in a position to make a meaningful change.”
In Connecticut state employee unions bargain for their pension benefits with the governor’s office. None of Connecticut’s neighboring states allow unions to bargain for their pension benefits and many according to Roraback have moved to 401k type plans and away from defined benefit plans.
“Is he running for office?” Malloy asked of Roraback.
Roraback is one of several candidates running for the Republican nomination in the 5th Congressional District, but held the press conference Tuesday in his capacity as a state senator.
Roraback said allowing the legislature to make these types of changes now makes sense and it improves the viability of the pension fund for those employees already contributing.
“If they adopt this change, it will make the pension stronger for existing state employees,” Roraback said. “It will prejudice no one because new employees will know the rules under which they are being hired.”
Sen. President Donald Williams, D-Brooklyn, said he hadn’t seen Roraback’s proposal but would be happy to look at. However, he said the state already has a binding contract with its state employees.
“It’s my understanding that collective bargaining agreements as to pension are stretching for another five or six or seven years,” he said. “My guess is that those folks would still be covered under the existing collective bargaining agreements, but I’d have to see Sen. Roraback’s proposal to understand it better.”
Rorback argued there’s no time like the present to tackle these issues.
“We have a structure in our retirement benefits, which is clearly unsustainable,” Roraback said. He cited the recent decision by Moody’s to downgrade Connecticut’s bond rating, a result of having one of the worst funded pension system in the nation.
“Moody’s cited the need for more substantive pension changes than what Governor Malloy negotiated with state employees or has so far proposed,” Roraback said. “While aggressively paying down our long-term pension obligations should be a priority for state government and is good fiscal policy, it must be done within the context of a budget Connecticut’s taxpayers can afford.”
On Monday Malloy proposed increasing the amount of money the state contributes to the state employee pension fund to ensure it’s fully funded by 2032.
Roraback said while that sounds good closing the loopholes in the current system, which currently pays 376 retired state employees more than $100,000 a year, would eliminate the need to dedicate large sums of money to pensions in the future.
“It is unfortunate that Governor Malloy, after blaming past Governors for tying the state’s hands with a long term pension contract, actually extended that contract into the next decade,“ Roraback said. “And it is unfortunate that after criticizing the gross inflation of pensions through overtime abuse, the governor completely failed to address the issue in his contract with state employee unions.”
Roy Occhiogrosso, Malloy’s communications adviser, said the governor believes deeply in the collective bargaining process and the deal he negotiated with the state employees will save taxpayers $21. 5 billion over 20 years.
He said Sen. Roraback knows these proposals and knows they’re covered in the collective bargaining agreement.
Roraback maintained he will be able to find bipartisan support for his proposals, but he won’t find the support of state labor unions.
Larry Dorman, spokesman for AFSCME Council 4, said the issue is a “non-starter” with the unions since they already reached an agreement with the Malloy administration that saves the state millions of dollars.
“This just proves Roraback is out of touch with the reality of working class people,” Dorman said. “That doesn’t bode well for his Congressional bid.”
He said 401k plans are savings plans which are difficult to administer while the defined benefit plan state employees have is a retirement plan. He said instead of looking to take benefits away from people Roraback should concentrate on making sure everyone has a good retirement plan.
