Final Report on Connecticut's State Employees Retirement System and Teachers' Retirement System

Abstract

The report’s key findings are:• Connecticut’s pension systems for state employees and teachers face large unfunded liabilities, despite recent efforts by the State to fund.• A significant source of the problem is the "legacy debt" built up before the State began pre-funding its pensions in the 1970s.• Since pre-funding began, inadequate contributions from the State and low investment returns have added to the problem.• One way to address the problem is through a two-step approach:1. separately finance the legacy debt over multiple generations; and2. fund ongoing benefits using a level-dollar amortization method over a reasonable rolling period; and reduce the long-term assumed return.