Robbing Peter To Pay Paul

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Battle brews over selling assets to pay pensions

HARTFORD — The partisan battle over state government's finances heated up again in the first days of May after a top Republican lawmaker questioned the sale of pension fund assets to cover benefits owed to retired workers.

But state Treasurer "">Denise L. Nappier countered May 3 that "nothing constructive can be gained" by House Minority Leader "site/">Lawrence F. Cafero's comments, adding that state assets have to be sold on occasions during tough fiscal times.

"This ""> more troubling proof that Connecticut's finances are in crisis and that our spending exceeds our revenues in every corner of the state bureaucracy,'' said Cafero, a Norwalk Republican. "We are continually told that our budgets will balance and that we have enough "">buy coming in the door. Neither is true.''

Nappier recently informed the state's Investment Advisory Council (IAC) that her office would liquidate $266 million in "core long-term public investments" from the pension fund for state employees, and $161.5 million from the teachers' fund.

Cafero added that Nappier also notified the IAC that both pension funds "are projected to continue to have insufficient contributions and dividend and interest receipts,'' to meet pension payrolls.

Both pension programs suffer from decades of underfunding as past governors and legislatures raided or deferred payments in tough fiscal times.

According to the last actuarial analyses, the state employees' fund held enough assets to cover about 42 percent of its long-term obligations, and the teachers' fund held 55 percent.

Analysts typically cite 80 percent as a healthy ratio.

But Nappier wrote in a statement Friday that "the sale of ... pension assets in order to pay benefits has become a normal course of business. This is not news."

She noted that while pension investment earnings have improved since the last recession, there are still signs that the economy is far from strong.

State budget analysts recently downgraded revenue expectations for the next two fiscal years by nearly $500 million this week.

—  Keith M. Phaneuf


This story originally appeared in, where a longer version of it may be read.


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