Connecticut Governor Dannel P. Malloy wants towns to start paying something for teacher pensions:
Currently the state is responsible for funding, 100 percent, the Connecticut State Teachers’ Retirement System — the fund responsible for maintaining retirement benefits for over 36,000 retired and 50,000 active teachers, school administrators and their beneficiaries.
The governor said the state can no longer afford to have towns not contribute to the retirement fund for teachers.
I get the part about not paying $407 million. In New Jersey we have a long established history of payment by whim. But if Connecticut politicians also maintain a lapdog judiciary does it extend past the point of simply allowing them to shirk contributions all the way to forcing someone else (albeit the employers of the participants) to make those payments?
Since my last review of the Connecticut Teachers Retirement System the June 30, 2016 actuarial valuation has come out so it seemed like a good day for an update.
Valuations are done every two years with contributions determined two years ahead for two years as follows.
- FY 6/30/18: $1,290,429,000
- FY 6/30/19: $1,332,468,000
Total participants @ 6/30/16: 89,027 including:
- Retirees: 36,065
- Separated but entitled to benefits: 2,085
- still working: 50,877
There are also 12,667 separated participants who are not vested though presumably they appear in the valuation either on the off-chance they may return or that they still have employee contributions included in the assets that the plan does not want to let go of.
Asset Value (Market) @ 6/30/16: $15,584,564,000
Actuarial Accrued Liabilities (valued at an 8% interest rate as GASB 67 numbers are not yet out presumably so they could get in these changes before a funded ratio in the low 30s becomes the official one) @ 6/30/16: $29,839,923,000 including:
- Retirees: $18,228,918,000
- Separated with vested benefits: $376,252,000
- Separated with refunds due: $248,034,000
- Still working: $10,986,719,000
Funded ratio: 52.23%
Unfunded Liabilities as of 6/30/16: $14,255,359,000
FY 2016 activity:
- State Contributions: $975,578,000
- Employee Contributions: $290,557,000
- Payouts: $1,889,067,000
That last number is the big one. Fifteen years ago annual payouts were $691 million and, absent any meaningful reform on the benefit side, will grow over the next 15 years to $5 billion while all Connecticut politicians are looking for are ways, not to pay those future benefits but, to avoid making even their current mini-contributions.