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:
- separately finance the legacy debt over multiple generations; and
- fund ongoing benefits using a level-dollar amortization method over a reasonable rolling period; and reduce the long-term assumed return.