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June 28, 2019

Study: CT muni pensions are nearly 75% funded

By Matt Pilon

Connecticut cities and towns are doing a much better job than state government when it comes to funding their pension systems, according to fresh data analyzed by Hooker & Holcombe.

The Bloomfield-based actuarial and benefits consulting firm crunched the numbers on approximately 200 municipal pension plans in Connecticut, using year-end financial reports for June 30, 2018.

The plans, which represent more than 70,000 participants and $11 billion in assets, had an average funded ratio of 74.9 percent, up slightly from 74.5 percent in 2017.

That’s well above the State Employees Retirement System (SERS), which was 36 percent as of last year, according to the Yankee Institute.

One problem for SERS has been that over the decades, lawmakers neglected to pay enough into the system. Another has been rosy assumptions for investment returns.

Cities and towns have been lowering their assumptions in recent years, Hooker & Holcombe found.

The average investment return assumption last year for the plans analyzed was 6.81 percent. That was down from 6.92 percent in 2017, and 7.14 percent in 2015.

The firm’s analysis can be downloaded here.

Read more

Hooker & Holcombe’s office relocation

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