It’s one of the biggest issues facing Connecticut next year. But while the contract guaranteeing pensions and other benefits to thousands of present and retired state employees expires June 30, the question of its renewal has sparked few statements so far among candidates for governor, other s tatewide offices or for the General Assembly. For some, the pension and health insurance benefits that state government offers retirees are too lucrative. Others say the benefits have been watered down considerably, leaving understaffed state agencies unable to retain talent and forced to mandate excessive overtime. Gov. Ned Lamont, a Greenwich Democrat seeking a third term this November, has not called for any major changes to the benefits plan and told the Connecticut Mirror he expects to resolve the issue amicably with unions next spring. But unions have charged the fiscally moderate governor with leaving major agencies understaffed and diverting too many dollars from core programs to reduce debt. They’ve also received raises topping 4% annually since 2021. Lamont said his budget policy “also means [workers] have a pension they can count upon … They weren’t sure about that eight years ago.”  Since 2020, the governor has deposited $11 billion in surpluses — generated through aggressive budget caps — to reduce unfunded pension liabilities. Connecticut amassed enormous pension debt through seven decades of poor savings habits prior to 2011. Three concessions deals reshaped worker benefits Connecticut first began offering pensions to state workers in 1939, and lawmakers added retirement healthcare in 1978. But by the late 2000s, those programs were missing billions of dollars in principal and investment earnings forfeited by prior generations that failed to save for the benefits they established and promised. Gov. M. Jodi Rell and the 2009 legislature got unions to accept a one-year wage freeze and to require new workers and existing staff with less than five years of experience to contribute to their retirement healthcare. Just two years later, facing the largest budget deficit in state history, Gov. Dannel P. Malloy got unions to freeze pay for two years, force all workers to contribute toward retirement healthcare and create a reduced pension benefit for new hires. A third concessions package, under Malloy in 2017, included a three-year freeze and more healthcare restrictions. And the pension benefit, set just six years earlier, was reduced again and converted to a hybrid that also included a 401(k)-style savings program. Unions also gave Connecticut extra time to solve the pension debt left by prior generations. Catch-up payments that were supported to be completed by the mid-2030s were stretched into the early 2050s. Despite the huge financial stakes, elected officials have had few chances to vote on these benefits in recent history. Gov. John G. Rowland and the 1997 legislature set pensions and retirement healthcare for 20 years in an unprecedented contract with unions. Malloy added five years to the deal in 2011 and again in 2017 in exchange for the concessions packages he negotiated. Still, some say major and necessary adjustments to these benefits already have been made. “I think the reforms from the Malloy administration made significant changes to pensions and healthcare, which have produced considerable savings,” House Speaker Matt Ritter, D-Hartford, said Thursday. “Our pension liabilities are decreasing every year, and if we continue to meet our actuarial commitments, we should be over 80% fully funded within 15 years.” But labor leaders say the sacrifices workers made to close numerous state deficits in the 2010s left agencies in social services, healthcare, public safety and other key fields unable to retain top workers. “The private sector actively recruits state workers with higher paying positions, especially once they are fully trained and experienced,” the State Employees Bargaining Agent Coalition wrote in a statement this week, adding the hybrid pension/401(k) system “provides little incentive to stay.” Department of Transportation Commissioner Garrett Eucalitto has said that his agency has struggled to keep engineers and other key professionals from leaving for lucrative private-sector jobs. Union leaders say other departments are losing staff because shortages — created as the overall workforce shrank 10% between 2011 and 2018 — trigger too much mandatory overtime and oppressive work conditions. State agencies set an overtime record in 2023, spending $305.4 million, and have pushed well past that since. According to the legislature’s nonpartisan Office of Fiscal Analysis, overtime spending in the 2025-26 fiscal year, which wrapped last June 30, approached $338 million, up almost 7% over the prior year. More than 95% of that spending came from just five departments: Correction, Mental Health and Addiction Services, Emergency Services and Public Protection, Developmental Services, and Children and Families. “Many of our staff dedicate their careers to serving those most at risk, most in need, most vulnerable, and sometimes even most dangerous,” the coalition wrote in its statement. “Doing so understaffed with mandated double or even triple shifts makes a bad situation much worse for them and the people they care for.” Lamont also recently validated unions’ concerns and said this must be considered when a contract is negotiated next year. “In some categories, we need more people,” he added. Comptroller Sean Scanlon said there is some good news on that front. Early indications from his office indicate that state employees are not projected to retire in large numbers during the first half of next year, before the old contract expires. An unprecedented 4,834 state employees retired in 2022 — more than double the normal amount — as veteran staffers left in droves before some delayed pension restrictions left over from the 2017 concessions package took effect. With debt still high, does CT need to reduce pensions again? But Republican gubernatorial candidate Ryan Fazio, a state senator from Greenwich, says Connecticut’s taxpayers also suffered during the 2010s. Connecticut imposed three large tax hikes — all included income tax increases — in 2009, 2011 and 2015. The state also closed sales tax exceptions and boosted business taxes in 2019. And the state still owes more than $30 billion in unfunded liabilities for pensions for state employees and for municipal teachers, one of the largest burdens, per capita, among any state. And another $16 billion is due to the retiree healthcare program. Given that debt and Connecticut’s high cost of living, “there needs to be reforms or changes made to make the long-term state of the state more sustainable” for taxpayers, Fazio said earlier this month. “If Sen. Fazio is concerned about affordability for taxpayers, he should be making sure the ultra-rich pay their fair share in taxes to provide relief to middle and working-class families,” SEBAC responded. But both Fazio and House Minority Leader Vincent J. Candelora, R-North Branford, say unionized workers have fared better than the public in recent budgets. Most state employees have received annual raises of about 4.5% — a 2.5% cost-of-living adjustment and a step hike that adds about 2 more percentage points — since the 2021-22 fiscal year. Generous raises that exceed most in the private sector and significant overtime pay also will drive up the value of pensions, Republicans said. “The majority party’s approach to labor is simple,” Candelora said. “It’s more about just keeping the unions happy so Democrats get reelected. I would have a broader conversation.” Unions seeking to preserve pension benefits should scale back remote work policies, particularly in child welfare and social worker positions that often require face-to-face interaction with residents, he said. “I have a growing number of people calling me not able to get people on the phone” at state human service agencies, Candelora added. ...read more read less