Connecticut Teachers’ Retirement Board at Risk of Insolvency

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HARTFORD — February 21, 2017 — Darlene Perez, the administrator of the Connecticut Teachers’ Retirement Board, today expressed support for the Governor’s Proposed FY 2018-2019 Budget during a meeting of the Appropriations Committee held at the Connecticut General Assembly State Government Office.  The budget would increase the amount of state funding allocated toward the Teachers’ Retirement Board, which provides teachers with retirement benefits and manages the Health Insurance Program for Retired Teachers.

The meeting convened in order to address the board’s fears regarding it’s low finances and inability to support retired teachers, whose numbers are expected to increase over the next few years, as the generation of baby boomers enters into retirement.  Perez related how the Teachers’ Retirement Board needs funding now more so than ever because “among the professional fields, teachers have the longest life-spans and Connecticut teachers have the longest life-spans out of all teachers”.  None of the Appropriations Committee members asked Perez to give evidence for her claim about the life span of teachers.  The Teachers’ Retirement Board can only provide retired teachers with health insurance benefits if the Board receives the funding needed to keep the Health Insurance Program intact.  The Governor’s Proposed FY 2018-2019 Budget would increase the contribution, which the state government allocates to the Board, to 20 percent so that the Board can continue to provide teachers with health benefits after retirement.  Unlike her fellow Teachers’ Retirement Board members, who do not advocate for the Governor’s Proposal because they feel that the state government should fully fund the board, Perez realizes that a fully funded board is out of reach and rather hopes to convince the Governor to increase the contribution to at least 33 percent.

Dr. Joseph A. Fields, the Health Insurance Consultant for the Connecticut Teachers’ Retirement Board since 1999, spoke alongside Perez in order to help address teacher health insurance budget issues. After the hearing, Dr. Fields noted that beginning in 2010, the Connecticut state government decreased the amount of funding allotted to the Connecticut Teachers’ Retirement Board.  Fields’ fears that the continued lack of funding will lead the Board to insolvency.  According to Fields, “the state stopped putting in their share.  So in 2010 and 2011, they put in nothing, now they put in about 14 percent of the cost of the program and over the next two years, there is danger of insolvency… If nothing is done, there will absolutely be an insolvency within three years”.  Fields also described the growth of the Teachers’ Retirement Board programs and a need for an increase in funding when he said that  “in essence, we’ve been growing at about 8% a year and that means you double the enrollment every eight or nine years”.  According to Fields, the increase in funds granted through the Governor’s Proposal FY 2018-2019 Budget would keep the Teachers’ Retirement Board “from going insolvent for three to four years”.

The Governor’s Proposed FY 2018-2019 Budget will provide the Teachers’ Retirement Board with short term relief but it will not solve the board’s long term issues.  Since Fields estimates that the Governor’s Proposal will only help the Board remain intact for three more years, the board will continue to advocate for its programs in order to ensure that the large number of retired teachers receive health benefits.IMG_1462