This is an historic agreement that prioritizes structural, verifiable reductions to long-term pension and benefit costs, while also achieving significant savings in the coming biennium. This groundbreaking agreement substantially reduces the unfunded liability for both the state employee retirement system and our retiree health benefits trust fund.
Under this labor deal, the State Employee Bargaining Agent Coalition has agreed to zero wage increases for three years, higher health co-pays and premiums, and three unpaid furlough days in 2017-18.
“This labor agreement is the first step toward solving our budget deficit as it adopts a spending plan that generates new revenue, restructures our pension system into the future, while respecting the promises made in the past, and takes advantage of our demographic reality.” Rep. Gentile said. “This deal will put Connecticut on the path to financial sustainability, produce immediate savings in healthcare and enact several significant structural changes by gradually shifting costs onto employees and retirees into the future.”
Other structural changes include overtime capped at 60 percent, health insurance redesign, pension reforms, increased co-pays, premium cost sharing and COLA reforms.
Additionally, the plan will require all employees to pay 2 percent more into their pension over biennium and establish a new tier IV of employees going forward that will have a defined benefit and contribution plan.
In regards to savings, this agreement:
- Saves taxpayers approximately $710 million in Fiscal Year 2018 and $850 million in Fiscal Year 2019,
- Savings grows to $24 billion over the next 20 years,
- Turns a $20.7 billion unfunded liability into a $1.5 billion surplus over 30 year
(This is a press release from Gentile's office)