BFT members are encouraged to support two bills before the legislature that could greatly improve retirement benefits for teachers. Below is the information for SB 28 and SB 342.
*** BILL S.B. 28 AND WHY IT CONCERNS YOU ***
DID YOU KNOW?
- Connecticut is one of only five states in the nation that fully taxes the pensions of its teachers. As a result, one need not wonder why one fourth of our retired teachers move out of state, proven by the fact that 26% of pension checks are mailed out of state. They are motivated, at least in part, to escape the high income tax burden in Connecticut. In proposing an income tax exemption that phases in a 50% exemption over the next two years on retired teachers’ pension income, Governor Malloy is not only addressing “a very basic tax unfairness,” this initiative would also be bringing Connecticut in line with 45 other states.
VERY PERTINENT INFORMATION IS OFTEN OVERLOOKED
IN THE DEBATE ON THE MERITS OF [BILL SB 28's] PROPOSAL:
- First, it is misleading to compare the average teacher pensions ($47,000.00) with state employee average pensions ($30,000.00) as some have done. State employees range from highly skilled professionals to unskilled laborers while all teachers are professionals who must first pass state exams in respective subject areas, have an initial bachelor’s degree and mandatory post graduate degree to maintain certification.
- Lawmakers should also keep in mind that retired teachers are not unionized and must rely on legislative action for their retirement benefits. It is a stressful existence to have to worry about your retirement benefits in your old age after having followed the rules and having paid for these benefits during your teaching career. This is not an exaggerated claim. Since 2010 the state legislature has underfunded the Health Insurance Premium Account by $170 million due to Connecticut’s fiscal issues which, according to the fiscal projections of the Teacher’s Retirement Board, will result in withdrawals exceeding contributions as soon as 2018. Lawmakers tell us this will never happen, but every year due to the state’s budget shortfall, the state’s contribution to our health funds is among the first to be cut.
- Another most significant fact in the discussion surrounding lowering taxes on our pensions, and one the public should be aware of, is that Connecticut teachers cannot receive Social Security, not even from their spouse who paid into it. The only social security benefits retired teachers can claim is if they worked a second job part-time outside of public education, or worked prior to entering the teaching profession. Even then, if they do qualify for Social Security benefits in this manner, those benefits are significantly reduced (50% or more) by federal law. In the case of many of our ARTC members, the pension is all they have to live on.
- The average teacher pensions are $47,000 (with some as low as…$18,000) and state employee average pensions $30,000.00, but trying to compare the two is like comparing apples and oranges. Keep in mind that state employees range from highly skilled professionals to unskilled laborers, while all teachers are professionals who must first pass state exams in respective subject areas, have an initial bachelor’s degree and mandatory post graduate degree to maintain certification.
- Of benefit to the general public, this proposal (SB 28) also has the potential of injecting additional consumer spending into Connecticut’s economy. The most recent research (2009) by the National Institute on Retirement Security finds that each dollar paid out in pension benefits supports $1.34 in total economic activity in the state. Furthermore, every dollar “invested” by Connecticut taxpayers in pension plans supports $4.05 in total economic activity in the state.
As Tom Singleton, President of the Association of Retired Teachers of Connecticut, notes: “One wonders, what message are we sending as a state to today’s teachers, who currently pay 6% of their salary into their pension fund and an additional 1.25% into a Health Insurance Premium Account (HIPA) to ensure peace of mind in retirement? They won’t be able to collect social security and that even a modest reduction in taxes to our pension becomes political fodder because it’s an election year.”
WHAT DO UNION MEMBERS NEED TO DO?
The above information was taken from Tom Singleton’s RECENT testimony before the Finance Committee. While the bill is out of committee, your help is needed to pass this bill. Contact your representatives and ask them to support this bill.
FINANCE COMMITTEE MEMBERS
Rep. Christopher Wright: http://www.housedems.ct.gov/WrightC/
BRISTOL, NEW BRITAIN, PLAINVILLE
Rep. Betty Boukus: http://www.housedems.ct.gov/boukus/
*** BILL S.B. 342 AND WHY YOU SHOULD CARE ***
SB 342 concerns the Retired Teachers Health Insurance Premium Account (aka HIPA). It is, according to Tom Singleton, President of the Association of Retired Teachers of Connecticut, “a positive step toward reversing a pattern of underfunding our HIPA account over the past several years.” Below is an excerpt from testimony he made before the Appropriations Committee on March 07, 2014.
It is important to note that retired teachers do not have the protection of union negotiated, contractual retiree benefits as do all state employees. Active and retired teachers contribute more than 2/3 the cost of the health care benefits and rely on legislative actions for the balance.
Though the HIPA fund had been fiscally sound from 2004 to 2010, it has been underfunded since. The current language allows for automatic diversion of federal reimbursement funds (RDS) from the HIPA to being used as part of the State’s contribution to the fund. This happens without any input from [committees] or the legislature. As a result, while legislatures worked hard to restore to ¼ funding last year—the actual state contribution was 1/8 instead of ¼. If an additional $2 million is transferred out of HIPA, as recently recommended, the actual state contribution for this year drops to 10% instead of 25% or 33%.
This continuing pattern of funding is fiscally unsound and makes retired and active teachers—[86,000 in all]—feel like the HIPA has become a convenient piggy bank to shore up budget shortfalls. The process of funding HIPA needs to be more transparent for all and the current proposed legislation (SB 342) will greatly enhance that process.
WHAT DO UNION MEMBERS NEED TO DO?
This bill (S.B. 342) is currently still in committee. In order for a vote to take place, it has to be taken OUT of committee. Contact your representatives and ask them to move the bill OUT OF COMMITTEE to the legislature
APPROPRIATIONS COMMITTEE MEMBERS
Frank Nicastro: http://www.housedems.ct.gov/Nicastro/
Whit Betts: http://cthousegop.com/whit-betts/
WHETHER YOU CALL OR EMAIL, BELOW ARE SOME TIPS
o Introduce yourself
o You are a constituent from…
o You are an active/retired teacher, spouse of a teacher, etc…
- Thank them for having a hearing on these bills.
- Ask them to please support/pass/move out of committee to legislature the bills mentioned above…
- Highlight some of what Tom Singleton brought up in his testimony. Be aware of the following:
o For S.B. 28
- CT is one of only five states that FULLY TAXES teachers’ pensions
- Teachers in CT are UNFAIRLY penalized in regards to their social security benefits
- One of only 15 states that has the WEP/GPO penalties.
o The EWP (Windfall Elimination Provision) causes teachers to lose up to two-thirds of their social security benefits.
o With the GPO (Government Pension Offset), most teachers will lose their entire spousal benefit upon the death of a spouse.
o For S.B. 342
- Transparency is one major purpose of this bill.
- State lawmakers need to be/want to be aware each budget year as to how the federal reimbursement for Medicare Part D is being applied. Is it put in as part of the state’s contribution to the HIPA OR IN ADDITION TO the state’s contribution?