Final Report (Connecticut Pension Sustainability Commission)

As part of the biennial state budget for fiscal years 2018 and 2019 (Conn. Acts 17-2 (June Special Session)), the Connecticut Pension Sustainability Commission was established to study the feasibility of placing state capital assets in a trust and maximizing those assets for the sole benefit of the state pension system.

The 11-member Commission began its work in July 2018 and issued its final report on June 27, 2019. In its final report, the Commission grouped its key findings, conclusions, and recommendations under the following areas.

• Trust Concept: The Commission found it may be feasible for the State to establish a mechanism to identify and transfer state assets into a trust for the sole benefit of the State’s pension funds.
• Asset Eligibility / Public Policy Considerations: The Commission recommended that the legislature provide specific policy guidelines before specific assets are considered for potential contribution to a trust mechanism.
• Trust Governance: The Commission concluded that the Office of the State Treasurer is the appropriate authority to provide oversight and direction on the management of any kind of asset trust.
• State Lottery: The Commission found that the concept of using the proceeds of the Connecticut Lottery for the benefit of the State's pension funds or the wholesale transfer of the Connecticut Lottery, as an asset to the funds, is technically feasible. However, the Commission stated additional consideration on how either action would affect the liquidity of the pension funds would require further study.
• Further Analysis: The Commission recommended that, should the legislature wish to explore the specific concepts identified in its final report further, the work should be conducted by either the Office of the State Treasurer and/or through the Commission in order to avoid duplicative work by another newly established state entity. The Commission also recommended that the legislature, in pursuing additional analysis, designate sufficient resources to allow for professional legal, accounting, actuarial and/or other necessary consulting services to verify the feasibility of the concepts contained in the Commission's final report.