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Wed Nov 11, 2015, 01:05 PM

Connecticut would be first state to split pension liability

Connecticut would be first state to split pension liability

Published November 11. 2015 6:28AM
Associated Press

Hartford Connecticut would be the first state to split its pension system into two funds in order to more easily pay off the unfunded liability, pension experts from Boston College said Tuesday.

Democratic Gov. Dannel P. Malloy, whose administration hired his alma mater to review the state's public employee pension and teacher pension systems, wants to create one fund for so-called "Tier 1" retirees, people hired before 1984. The approximately 30,000 recipients make up the bulk of the state's unfunded pension liability, which would be funded on a pay-as-you-go-basis.

The second fund would cover pensions for newer hires, which is currently about 95 percent funded.

Alicia Munnell, director of the Center for Retirement Research at Boston College, praised Connecticut for considering something no other state has done, adding that there should be no concerns.


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