Chris Perone-D Norwalk co-sponsored a bill that would allows state treasurer Denise Nappier to buy pension obligation bonds instead of higher interest rate options. The current Connecticut Teachers Retirement Fund stands at a $6.9 billion unfunded liability, or as we prefer to say, deficit. All the talk about the budget surplus is in fact false, since you can’t really ignore unfunded liabilities in real life. At least according to GAAP. From the Perone press release:

Legislation designed to allocate $6.9 Billion to the Connecticut Teachers Retirement Fund (TRF) passed through the House of Representatives Monday night by a near-unanimous vote. Chris Perone (D-Norwalk), who co-sponsored the legislation, praised the bill for it’s effectiveness in funding the pensions, while saving taxpayers billions of dollars in the long term.

“The obligation that we have to our teacher’s pensions is pressing and cannot be ignored,” Rep. Perone said. “By acting now we are going to save the state’s taxpayers a ton down the line.”

The bill aims to reduce growth in the TRF’s unfunded liability, which is estimated at $6.9 billion, by giving state treasurer Denise Nappier the ability to buy pension obligation bonds at favorable interest rates, allowing the state to substitute higher interest for lower interest debt.

With a term of repayment that spans 25 years, the lower interest debt could net taxpayers $2.8 billion.
“This bill is really a win-win situation for the state,” said Rep. Perone. “On the one hand we are investing in our children’s future and the future of our state educators, and on the other we are offering our taxpayers a nice fat savings package.”

Among the conditions of the bond sale is legislation that commits to fund teachers’ pensions at 100 percent of the actuarial recommended contributions – something that hadn’t been done by the state from 1992-2005.

The final vote on the bill was 145-5. The bill now awaits action in the State Senate.

Good job Chris Perone.