OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http: //www.cga.ct.gov/ofa

HB-7601

AN ACT CONCERNING DEFICIT MITIGATION.

AMENDMENT

LCO No.: 7069

OFA Fiscal Note

State Impact:

Note: GF=General Fund; TF=Transportation Fund

Municipal Impact: None

Explanation

The amendment establishes an Early Retirement Incentive Program (ERIP) effective January 1, 2009 – March 1, 2009. It is anticipated that an ERIP will save approximately $67.2 million in the General Fund and $6.7 million in the Transportation Fund in FY 09. In FY 10, an ERIP is estimated to save $78.9 million in the General Fund and $11.2 million in the Transportation Fund.

Under the amendment, General Fund accrual leave payments are to be paid in three annual installments of approximately $27.8 million per fiscal year beginning in FY 12. Transportation Fund accrual leave payments are to be paid in three annual installments of approximately $2.9 million per fiscal year beginning in FY 12.

An ERIP increases the state's long-term liabilities which will be calculated by the consulting actuaries. Currently, the State Employees Retirement System has an unfunded actuarial liability of $9.3 billion and an additional unfunded liability for retiree health insurance of $21.7 billion.

The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General Assembly or either chamber thereof for any purpose.