Long Needed CMERS Reform Proposed

CMERS working group recognized need for change

For years, towns and cities have been looking to find a way to reform the Connecticut Municipal Employees Retirement System or CMERS. Contribution rates have surged for many – if not all – of the 107 entities in this system, creating a ticking time bomb on the longterm viability of these pensions. Fortunately, for now, crisis was potentially averted by a working group agreement convened by State Comptroller Sean Scanlon, including representatives from CCM member towns and labor. Now the agreement has to work its way through the legislative session, which adjourns on June 7.

The final agreement, formalized in late April just a month and a half after this working group was convened, contains six main points: Adjust the Cost of Living Adjustments (COLA) and Increase the Multiplier, institute a Deferred Retirement Option Plan or DROP Plan, Re-Amortization of the Fund from 17 to 25 years, Reform the Governance Structure to include municipal officials, Data Collection and convene a working group to establish a New Plan/Tier to be considered during 2024 legislative session.

Currently, CMERS is the highest funded public employee pension plan thanks in large part to the statutory mandate that municipalities fully fund their pensions, one that is not shared by the state pension plans. According to figures retrieved from the CT Mirror, the state employee pension is funded at 46% and the municipal teacher pension is funded at 57%.

While much of the inner workings of the agreement consists of retirement jargon – minimum and maximum COLAs, multipliers, Deferred Retirement Option Plans – the important part is the agreements made from both sides of the issue. This is perhaps best seen in the governance structure, which, if enacted, will be made up of equal representation from labor and management for a total of seven members including actuaries from each side and a neutral chair. Management representatives will be nominated by CCM to the Governor for consideration. And in a second phase of reform, the group will continue to research best practices for a more permanent governance structure.

Two other notable points include the research and negotiation on a new plan or tier to bring additional reform to the legislature next year with the intention of recruiting new entities. As noted, there are 107 entities in this system, and the final agreement allows the Comptroller to pursue data from the non-MERS towns on retirement plans offered there.

When forming this group, Comptroller Scanlon noted in a press conference that he told both sides that “everything should be on the table.” After so many years of standstill, there is finally movement on an issue that was heading for a cliff. A surge of retirements, increasing costs, and more have made CMERS unsustainable. This working group agreement puts us in the right direction and now the legislature must act in order for these provisions to become law.