June 6, 2007

REP. BUTLER APPLAUDS BILL TO FUND TEACHERS’ PENSIONS
Taxpayers’ to save billions in the long term

Representative Larry B. Butler (D-Waterbury) announced the passage of House Bill 6141, An Act Concerning Adequate Funding of the Teachers’ Retirement System to shore up finances in Connecticut’s Teachers’ Retirement Fund (TRF). Representative Butler co-sponsored this bill.

The legislation would reduce the growth in the TRF’s unfunded liability – estimated at $6.9 billion (a tripling of unfunded liability since 2000) – by authorizing State Treasurer Denise Nappier to purchase pension obligation bonds at favorable interest rates, thus allowing the state to substitute higher interest for lower interest debt.

“By restructuring the debt and committing to fully fund the teachers pension going forward, we are answering the teacher’s security for their financial future,” Rep. Butler said.

With a repayment term spread over 25 years, savings on the lower interest debt could reach $2.8 billion. The legislation was first proposed by Speaker Amann and Treasurer Nappier in February. This measure lowers the interest rate Connecticut will pay on the debt from 8.9% to an estimated 5.6%.

Rep. Butler also stated, “Thanks to the leadership of Speaker Amann and Treasurer Nappier this bill demonstrates the state’s commitment to pay its fair share to the TRF.”

As a condition of the bond sale, the legislation also commits to fund teachers’ pensions at 100% of actuarial recommended contributions, something the state failed to do from 1992-2005.

Rep. Butler represents the 72nd district in Waterbury and serves on the Finance, Revenue and Bonding Committee, the Select Committee on Housing, and the Human Services Committee.