Presentation to the Pension Sustainability Commission Regarding Funding of the Teachers' Retirement Fund (Office of the State Treasurer)
Nov 16, 2018
This presentation from State Treasurer Denise Nappier to the Pension Sustainability Commission outlines the treasurer's recommendations and suggested plan for improving the funding and sustainability of Connecticut's Teachers' Retirement Fund (TRF). The treasurer's recommended plan includes:
- Monetizing lottery revenues and transferring other state assets to the TRF in order to mitigate the impact of moving to a more realistic investment return assumption of 7.5% (from 8%).
- Paying off the pension obligation bonds (POBs), which the State sold in 2008 in an effort to improve the funding level of the TRF, in fiscal year 2026 (the first full fiscal year they can be redeemed), thereby allowing for more options for responsible recalculation of future contributions.
- After paying off the POBs, re-amortize the TRF’s remaining unfunded liabilities and further reduce the investment return assumption to 7%, consistent with capital market expectations.
Nappier, D. (2018). Plan For Sustainable Funding of the Teachers' Retirement Fund [PowerPoint slides]. Hartford, CT: State of Connecticut, Office of the State Treasurer. Retrieved from https://www.cga.ct.gov/fin/tfs/20180710_Pension%20Sustainability%20Commission/20181116/Denise%20L.%20Nappier%20Presentation%20Final%2011_16_18.pdf.