Teachers Speak Out On Retirement Plan (Connecticut)

February 5, 2007
By ROBERT A. FRAHM, The Hartford Courant

Retired and active teachers urged support today for legislation designed to wipe out a burgeoning deficit in a state teachers' retirement plan. The deficit has more than tripled since 2000 and has reached $6.9 billion, threatening to burden state taxpayers with huge debts in the future, state officials have warned. Under the proposal, the state would sell $2 billion in bonds to apply to the deficit and would pledge to support fully the annual cost of the teachers' retirement fund while the state repays the bonds over the next 25 years. "We're hoping at the end of the process we'll have a fully funded pension system," said Jeff Leake, a technology teacher at Dodd Middle School in Cheshire and one of more than 50 people at a press conference in Hartford where the proposed legislation was outlined. The pension shortfall, Leake said, has been worrisome not only to teachers approaching retirement, but to "a lot of younger teachers [who] are looking at the long haul, and they're wondering what will be there when they retire." By getting a favorable interest rate to repay the bonds, the state, in effect, would refinance its debt to the retirement system, with a projected savings of $2.8 billion over the 25-year life of the bonds. The bond sale, the pledge to support the full cost of the retirement system annually, and the projected annual investment returns on the retirement fund should eliminate the deficit by the time the bonds are repaid, officials said. "This is huge, in my opinion, for the taxpayers," said Speaker of the House James A. Amann, a Milford Democrat who outlined the proposal along with state Treasurer Denise L. Nappier. Amann called the proposal "the biggest and best deal for taxpayers in recent history" while Nappier described it as "fiscally prudent . . . and in the best interests of the state." State Rep. Andrew M. Fleischmann, D-West Hartford, co-chairman of the legislature's Education Committee, said the prospects for passing the legislation are good. Connecticut is one of 13 states in which public school educators do not take part in the federal Social Security system, relying instead on state retirement programs. The state has about 76,000 current and retired teachers. The current average pension for a retired teacher is $37,864 a year, union officials said. About half the state's teaching force is expected to retire over the next decade, increasing the stress on the pension system. Teachers and administrators contribute a portion of their pay to the system while the state also supports the fund, but state contributions fell short of actuarial recommendations for much of the last decade. "Without a secure retirement system, Connecticut will not be able to attract and keep the teachers it needs for our schools," said Phil Apruzzese, president of the Connecticut Education Association, the state's largest teachers' union.