Connecticut’s ‘defined benefits’ pension system best for retirees
In a recent article “CT still lags most states in saving for public-sector pensions,” the Connecticut Mirror wrote about a report from Pew Charitable Trusts on the strength of pension funds around the country. The Pew report ignores a number of important pieces of context regarding the growing strength of the Connecticut Retirement Plans and Trust Funds which provides a safe and secure retirement for many Connecticut families.
First, the state pension plans are well managed and do not risk failing to meet their obligations.
Like pensions and other large funds all over the world, Connecticut’s pension plans suffered during the Great Recession. Thanks to the leadership of State Treasurer Denise Nappier, the return on investments from the pension fund last year was 15 percent — or nearly twice the target for returns.
Second, while social workers, corrections officers and other public employees have contributed to the fund out of each and every paycheck during their careers, past governors and state legislatures failed to make their required contributions.
In other words, working men and women who are the backbone of our state have always paid their bills while failed politicians have not. Now, thanks to the leadership of Gov. Dannel Malloy, the state is making contributions well above the annual obligation. This bodes well for the fund in future years as it will continue to grow healthier and stronger to guarantee a secure retirement for our public servants.
Finally, buried deeply in the Pew report is the acknowledgment that the research is done in partnership with the John and Laura Arnold Foundation. As an executive at Enron, John Arnold walked away with an $8 million bonus as the company’s collapse sank $1.5 billion in public pension assets.
Now, John Arnold is on a crusade against defined benefit pensions, and he’s spent nearly $5 million of his own money to fund research at Pew to help him do so.
Objective research shows that a defined benefit pension – like the one that exists in Connecticut – is the best way to provide a secure retirement for retirees. In Connecticut, thousands of teachers, firefighters, cops, librarians, waste workers and others willingly take a lower salary so they may save for their retirement through the pension fund.
Because of the smart decisions by Gov. Malloy and Treasurer Nappier and the economic recovery from the Great Recession, the pension system in Connecticut is poised to continue providing a strong retirement in perpetuity.
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