HB 6375 — AN ACT CONCERNING THE UNFUNDED PENSION LIABILITY PORTION OF THE FRINGE BENEFIT COST FOR EMPLOYEES OF THE CONSTITUENT UNITS OF THE STATE SYSTEM OF HIGHER EDUCATION.

House of Representatives General Assembly RaisedFile Bill No.

6375301 January Session, 2021 LCOSubstitute House Bill No.

26156375 ReferredHouse toof Representatives, April 7, 2021 The Committee on HIGHERHigher EDUCATIONEducation ANDand EMPLOYMENTEmployment ADVANCEMENTAdvancement Introducedreported by:through REP.

(HED)ELLIOTT ANof ACTthe CONCERNING88th THEDist., UNFUNDEDChairperson PENSIONof LIABILITYthe PORTIONCommittee OFon THEthe FRINGEpart BENEFITof COSTthe FORHouse, EMPLOYEESthat OFthe THEsubstitute CONSTITUENTbill UNITSought OFto THEpass. STATE SYSTEM OF HIGHER EDUCATION.

AN ACT CONCERNING THE UNFUNDED PENSION LIABILITY PORTION OF THE FRINGE BENEFIT COST FOR EMPLOYEES OF THE CONSTITUENT UNITS OF THE STATE SYSTEM OF HIGHER EDUCATION.

(NEW) (Effective Julyfrom 1,passage) 2021) For thefiscalthe fiscal year ending June 30, 2022,2021, and for each fiscal year thereafter, the Comptroller shall fund, from resources appropriated for the State Comptroller-Fringe Benefits, the unfunded pension liability portion of the fringe benefit costs of the constituent units of the state system of higher education for employees compensated through resources other than the General Fund.

ThissHB6375 act/ shallFile takeNo. effect as follows and shall amend the following sections:

LCO301 1 sHB6375 File No.

2615301 1This ofact 2shall Raisedtake Billeffect No.as follows and shall amend the following sections:

6375 Section 1 Julyfrom 1,passage 2021 New section StatementHED ofJoint Purpose:Favorable Subst.

TosHB6375 require/ theFile ComptrollerNo. to fund the unfunded pension liability portion of the fringe benefit cost for employees of the constituent units of the state system of higher education.

[Proposed301 deletions2 aresHB6375 enclosedFile inNo. brackets.

Proposed301 additionsThe following Fiscal Impact Statement and Bill Analysis are indicatedprepared byfor underline,the exceptbenefit thatof whenthe members of the entireGeneral textAssembly, solely for purposes of ainformation, billsummarization orand resolutionexplanation orand ado sectionnot ofrepresent athe billintent orof resolutionthe isGeneral new,Assembly itor iseither notchamber underlined.]thereof LCOfor No.any purpose.

2615In 2general, fiscal impacts are based upon a variety of 2informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Fund-Effect FY 21 $ FY 22 $ FY 23$ Affected Resources of GF - Cost Approximately Approximately Approximately the General $75 Million $100.2 Million $104.1 Million Fund Higher Various - Approximately Approximately Approximately Education Savings $75 Million $100.2 Million $104.1 Million Constituent Units Note:

GF=General Fund;

Various=Various Municipal Impact:

None Explanation The bill results in a cost to the General Fund of approximately $75 million in FY 21, $100.2 million in FY 22, and $104.1 million in FY 23, and equivalent aggregate savings to the higher education constituent units.

The bill requires that beginning in FY 21, the General Fund defrays the cost of the State Employees Retirement System (SERS) unfunded accrued liability (UAL) attributed to non-General Fund supported positions at the higher education constituent units.

The table below describes the estimated savings to each institution and associated cost to the General Fund:

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301 $ Millions FY 21 FY 22 FY 23 Institution Est.

Est.

Est.

UCONN Health 30.2 31.7 33 UCONN - Storrs & Reg.

25.6 26.9 27.9 BOR - State Universities 18.7 19.6 20.4 BOR - Community Colleges* 0 21.3 22.1 BOR - Charter Oak 0.6 0.7 0.7 TOTAL 75.0 100.2 104.1 *The Community Colleges receive $20.35 million in FY 21 (only) to defray the entire estimated non-General Fund supported SERS UAL cost.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to the amount of the SERS unfunded accrued liability attributed to non-General Fund supported positions at the higher education constituent units, as affected by an annual SERS actuarial valuation and the amount of non-General Fund personnel costs at each constituent unit.

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301 OLR Bill Analysis sHB 6375 AN ACT CONCERNING THE UNFUNDED PENSION LIABILITY PORTION OF THE FRINGE BENEFIT COST FOR EMPLOYEES OF THE CONSTITUENT UNITS OF THE STATE SYSTEM OF HIGHER EDUCATION.

SUMMARY This bill requires the state comptroller to fund the unfunded pension liability portion of UConn’s, the Connecticut State Universities’, the community colleges’, and Charter Oak State Colleges’ fringe benefit costs beginning in FY 21.

It limits this funding to costs related to employees who are compensated through resources outside of the General Fund.

The bill also specifies that it does not change the comptroller’s funding of these institutions’ fringe benefits costs for employees who arecompensatedthroughtheGeneralFundusingappropriationsforthe State Comptroller-Fringe Benefits in the state budget.

EFFECTIVE DATE:

Upon passage COMMITTEE ACTION Higher Education and Employment Advancement Committee Joint Favorable Substitute Yea 22 Nay 0 (03/22/2021) sHB6375 / File No.

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