Senate chamber
The Senate chamber, crowded with onlookers on the last night of the 2023 session Credit: Hugh McQuaid / CTNewsJunkie

A bill to reform a pension system for municipal employees in 107 Connecticut towns passed the state Senate on a nearly unanimous vote Wednesday night shortly before the end of the legislative session. 

The plan was negotiated by state Comptroller Sean Scanlon through talks with municipal executives and leaders of labor unions representing their workers. The Senate sent the bill to the governor on a 34 – 1 vote that followed a bipartisan House vote on Tuesday. 

It seeks to stem ballooning costs under the Connecticut Municipal Employees Retirement System, in part through changes in retiree cost-of-living adjustments and how they are calculated to reflect factors like the impact of inflation and the performance of investments. 

Scanlon has estimated the changes will save towns around $30 million in the next fiscal year and far more in the coming decades. In a Wednesday night statement, Scanlon thanked municipal and labor officials for working with his office to address a seemingly insurmountable problem. 

“Together, we crafted a win-win deal that will decrease costs for municipalities while ensuring our public employees continue to have access to a pension,” Scanlon said. 

Legislators on both sides of the aisle commended the bill in brief remarks before its passage. 

“This bill seems to make significant changes to the Connecticut municipal retirement fund, which currently is going in the wrong direction, if you will, in terms of the amount municipalities have to contribute and steadily creating a greater amount of unfunded liability,” Sen. John Fonfara, D-Hartford, said. 

Automatic 2.5% COLA increases for municipal retirees would be phased out under the bill, replaced by increases tied more directly to the rate of inflation. The change is expected to save money during years when inflation is slow. 

“The bill… will provide cost certainty and relief for these retirement costs,” Sen. Henri Martin, R-Bristol said. 

The proposal would re-amortize the fund’s pension debt from 17 to 25 years and provide incentives for employees to continue working past the date they become eligible for retirement. 

The plan has been endorsed by a group of Connecticut town and city executives as well as labor unions representing municipal workers. It now goes to Gov. Ned Lamont, who is expected to sign it into law in the coming days.