HB 5609 — AN ACT CONCERNING RETIREMENT BENEFITS AND WORKERS' COMPENSATION BENEFITS.

House of Representatives General Assembly CommitteeFile Bill No.

5609504 January Session, 2025 LCOSubstitute House Bill No.

54905609 ReferredHouse toof Representatives, April 3, 2025 The Committee on LABORLabor ANDand PUBLICPublic EMPLOYEESEmployees Introducedreported by:through REP.

(LAB)SANCHEZ, ANE. ACT CONCERNING RETIREMENT BENEFITS AND WORKERS' COMPENSATION BENEFITS.

of the 24th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT CONCERNING RETIREMENT BENEFITS AND WORKERS' COMPENSATION BENEFITS.

(NEW) (Effective July 1, 2025) Notwithstanding any provision of the general statutes or special act, a municipality or special taxing district that provides a defined benefit pension and retirement system for its officers and employees and their beneficiaries shallshall, for purposes of calculating the pension or retirement benefits to be paid to an employee in retirement, consider as wages the greater of the (1) wages used to calculate the final average salary of such employee pursuant to the terms of such pension and retirement system, or (2) temporary total disability and temporary partial disability benefits received by ansuch employee pursuant to chapter 568 of the general statutes asover wagesthe forcourse purposes of the calculationtime ofperiod pensionused orto retirementcalculate benefitsthe tofinal beaverage paidsalary toof such employee inpursuant retirement.to the terms of such pension and retirement system.

Nothing in this section shall be construed to impair or alter the provisions of any collective bargaining agreement in sHB5609 / File No.

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504 effect before July 1, 2025.

Section 1 July 1, 2025 New section StatementLAB ofJoint Purpose:Favorable Subst.

TosHB5609 prohibit/ employersFile fromNo. reducing retirement benefits due to an employee receiving workers' compensation benefits.

LCO504 2 sHB5609 File No.

5490504 1The offollowing 2Fiscal CommitteeImpact Statement and Bill No.Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

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REP.OFA Fiscal Note State Impact:

SHAKE,None 120thMunicipal Dist.Impact:

H.B.Municipalities Effect FY 26 $ FY 27 $ Various Municipalities Cost Potential Potential Explanation The bill increases costs to municipalities offering defined benefit pensions and retirement systems as it requires the inclusion of temporary total disability and temporary partial disability benefits in pension calculations if the wages are greater than the employee’s final average salary.

5609This LCOwould No.increase the benefits paid out and the liability for the retirement systems.

5490The 2cost ofto 2municipalities is dependent on the instances where disability benefits that would not otherwise be used in the calculation are now included and the associated benefit differential.

The Out Years The annualized ongoing fiscal impact identified above is subject to instances where disability benefits are used in calculating retirement benefits and would continue into the future subject to inflation.

sHB5609 / File No.

504 3 sHB5609 File No.

504 OLR Bill Analysis sHB 5609 AN ACT CONCERNING RETIREMENT BENEFITS AND WORKERS' COMPENSATION BENEFITS.

SUMMARY This bill requires municipal or special taxing district defined benefit pension systems, when calculating an employee’s pension benefits, to consider as the employee’s wages the greater of the:

1.

wagesused to calculate theemployee’sfinalaverage salary (FAS) under the pension system’s terms or 2.

workers’ compensationtemporarytotaldisability andtemporary partial disability benefits the employee received over the period used to calculate the employee’s FAS under the pension system’s terms.

In other words, under the bill, if the wages used to calculate an employee’s FAS are less than the workers’ compensation benefits the employee received over the FAS period, then the pension system must use the workers’ compensation benefits to calculate the employee’s FAS instead of the wages.

Generally, defined benefit pension systems calculate an employee’s pension benefit as a percentage (based on the employee’s years of service) of the employee’s FAS.

The bill’s requirement applies regardless of any other statute or special act, but does not impair or alter any collective bargaining agreements in effect before July 1, 2025.

EFFECTIVE DATE:

July 1, 2025 COMMITTEE ACTION Labor and Public Employees Committee Joint Favorable Substitute Yea 9 Nay 4 (03/18/2025) sHB5609 / File No.

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