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Final Report (Connecticut State Post-Employment Benefits Commission)

Oct 28, 2010

On February 3, 2010, Governor M. Jodi Rell issued an executive order establishing the State Post-Employment Benefits Commission to examine the unfunded liabilities, costs, and budgetary impacts associated with the State's public pension systems and other post-employment benefits (OPEB).

The governor executive order charged the Commission with delivering a report that:

  • Identified the amount and extent of unfunded liabilities for pensions and other post-employment benefits;
  • Compared and evaluated the advantages and disadvantages of various approaches for addressing unfunded pension liabilities and post-employment benefits; and
  • Proposed short and long-term plans for addressing unfunded pension liabilities and post-employment benefits.

After meeting for seven months and reviewing information regarding Connecticut’s retirement systems and OPEBs, the Commission issued its final report on October 28, 2010. The Commission's final report included the following short-term and long-term plans.

Short Term Plan

  • Pre-Fund OPEB
  • Pay the ARC, and Eliminate Any Adjustments to Such.
  • Increased Member Contributions. The State and SEBAC should consider additional employee contributions for reinvestment in the plans (with a 1 percent increase totaling about $32 million), while the State should consider enacting a provision that would dedicate, for example, a portion of future surpluses for the plans.
  • Increasing the Retirement Age or Incentives to Retire Later. The State and SEBAC should consider raising the retirement age for those in Tiers II and IIA and increasing reductions related to early retirements, with any savings to be reinvested into the plans. For SERS, the projected savings totaled $135 million related to these changes in the first year, savings would increase going forward.
  • Other Plan Design Strategies. The State and SEBAC should consider plan modifications to SERS and OPEB, with any savings to be reinvested in the plans. In terms of OPEB, the changes for consideration include increased premium sharing and additional eligibility changes for employees moving directly to retirement from state service.
  • Service Delivery Changes. It is also critical to continue slowing health care inflation through plan and service delivery changes, including through the implementation of medical homes and other initiatives. A one percent reduction in the annual health inflation below the actuary’s assumed level would lower the calculated actuarial liability from $26.6 billion to $22.1 billion.

Long Term Plan

  • ARC and Funding Strategies. The State should commit to a funding strategy targeting funding ratio benchmarks (e.g. 55 percent by 2018 for SERS), and consider establishing a “floor” below which ARC will not go below.
  • Actuarial Analysis and Projections. The biennial actuarial valuations should reflect projections for liabilities and ARC amounts for all remaining years of the amortization schedule (not just two years).
  • Future Changes. No action, such as a retirement incentive program or plan changes, should be enacted without a full actuarial analysis.


State of Connecticut, Office of the Governor. (2010). Connecticut State Post-Employment Benefits Commission - Final Report. Retrieved from


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