GOP Senate leader: Malloy, unions ducked legislature on pensions

The top Republican in the state Senate charged Gov. Dannel P. Malloy and state employee unions Friday with making an end run around the legislature to resolve a disability pension controversy that the state auditors said may have cost Connecticut millions of dollars in improper payments.

Senate Minority Leader Len Fasano, R-North Haven, also called upon Democratic legislative leaders to insist Malloy submit the agreement reached with unions – which endorses a more lenient standard for awarding disability pensions – to the General Assembly for consideration. The auditors also recommended the legislature consider the issue.

“Untold millions of taxpayer dollars have already flown out the door in unwarranted disability benefits for ineligible state government retirees,” Fasano said. “Now, Governor Malloy has handed over rule-making authority to state employee unions and said, ‘OK, go ahead and write your own eligibility standards.’

“Can you say ‘conflict of interest’?”

Fasano’s objections concern a memorandum of understanding signed by Malloy’s administration and ratified Thursday by the State Employees Bargaining Agent Coalition.

Both sides effectively agreed on how the state would implement Connecticut law regarding disability pensions. And because the parties don’t consider it to be a new contract or a contract amendment, it will not be submitted to the legislature for action, the Democratic governor’s budget office confirmed Thursday.

Spokesmen for the Democratic majorities in the House and Senate declined to comment.

But the process Malloy and the unions took runs counter to the recommendation of the state auditors of public accounts, Robert M. Ward and John C. Geragosian.

In a special June 17 report to the governor, the auditors detailed a problem that also was highlighted in a lawsuit filed this summer by state whistleblower Virginia Brown, a former attorney with the retirement services division in the comptroller’s office.

According to state law, an employee is disabled for up to 24 months if unable to perform the duties for which he or she was hired because of job conditions. After that, the employee may continue on disability retirement only if certain other conditions are met. In particular, that employee must not be able to perform some other “suitable or comparable” state occupation.

Both the auditors and Brown assert that, at times, workers have been allowed to maintain disability pay as long as their injury prevented them from returning to their original job.

“Democrats will likely not want to touch this issue with a ten-foot pole, but it is not something that is going away,” Fasano said, adding that Senate Republicans would introduce legislation next year to reform the disability pension system. “… Republicans will not allow Connecticut taxpayers to be disrespected as their money gets wasted time and time again in our one-party-rule state.”

“Isn’t it pretty hypocritical for the minority leader to advocate for this for his friends on one day, but send out statements (of opposition) the next?” Malloy spokesman Devon Puglia responded.

Puglia was referring to Fasano’s advocacy for a publicly financed pension for East Haven Mayor Joseph Maturo.

“Seems like he has one standard for his friends and then another standard for everyone else,” Puglia said.

The state retirement commission, which also administers the Connecticut Municipal Employees Retirement System, determined Maturo, a Republican, could not collect a disability pension – related to his work as a firefighter – while also collecting his salary as mayor.

Fasano argued this was unfair given that the commission originally allowed longtime Democratic activist Marilynn Cruz-Aponte to collect a regular pension for her work in New Britain government while also receiving a salary as assistant to the public works director in Hartford. The commission later reversed itself and determined Cruz-Aponte could not collect both the pension and salary.

Hartford attorney Daniel Livingston said the memorandum on disability pensions basically returns the state to an interpretation it has followed for most of the past three decades: If a disabled worker cannot return to his or her original job within 24 months, they are entitled to an ongoing disability pension. Livingston could not be reached for comment Friday.

Comptroller Kevin P. Lembo also questioned whether this was the correct interpretation of the law after he took office in 2011. And while Brown asserts that Lembo and his staff pressured her not to raise concerns about how pensions were awarded, the comptroller – who insists Brown was not coerced in any way – directed the state’s Medical Examining Board to impose the more stringent disability pension standard in the fall of 2013.

But after this resulted in a significant increase in disability pension denials – and complaints from the unions – Lembo suspended all 24-month reviews and asked the administration and the unions to negotiate a solution.

Ward and Geragosian, who warned in June that millions of dollars in pension payments likely were improperly issued, either because of an incorrect standard or because of the suspension of medical reviews, urged the legislature to clarify the matter.

“This is a matter of state statute and legislative and regulatory authority,” Fasano said, adding that the legislature enacted a statute creating disability pensions and establishing the State Employees Retirement Commission to administer it, working with the comptroller. “SEBAC has no authority to draft or approve administrative rules or interpret state statutes. … This is another secret deal negotiated in the dark and is a bad joke on Connecticut taxpayers.”