September 24, 2024
Treasurer Russell deposits $608.2 million in volatility transfers to state pension funds
HARTFORD, Conn. – Connecticut State Treasurer Eric Russell on Tuesday certified 2024 data that $608.2 million in excess revenue generated through the state’s volatility cap will go to retired teacher and state employee pension funds. announced that it had been accumulated. At the direction of the Secretary of the Treasury, $335 million was deposited into the State Employees Retirement System (SERS) and $273.2 million was deposited into the Teachers Retirement System (TRS).
“These funds will be used to repay debt and grow pension fund assets,” Treasury Secretary Russell said. “Connecticut has taken significant steps to overcome the legacy of pension liability and fiscal mismanagement inherited by current taxpayers. This is the fifth consecutive fiscal year that funds have been deposited into the fund. My office will begin investing these funds immediately with the goal of maximizing performance and building on the success of recent investments. Strengthening the pension fund benefits all taxpayers by reducing debt, reducing annual spending, and protecting obligations to retired public servants.”
The deposits were divided proportionately between the two funds according to their unfunded liability balances, resulting in an approximately 55% to 45% split. The rationale and the amount of the deposit were communicated to labor leaders and rank-and-file union members in a letter from Treasury Secretary Russell last week.
The new transfer is expected to take place later this year, once operating surplus for fiscal 2024 is certified. At that time, an estimated $327.6 million would also be deposited using the same pro rata formula.
Volatility transfer (September)
(millions of dollars)
SERS (55.08%)
TRS (44.92%)
total
$335.0
$273.2
$608.2
Operating surplus (December)
(Millions of dollars) * Estimated value
*$180.4
*$147.2
*$327.6
total
(millions of dollars)
*$515.4
*$420.3
*$935.7
Budget controls introduced in 2017, known as fiscal guardrails, capture excess revenue in particularly volatile categories and automatically deposit it into the state’s budget reserve fund (commonly referred to as the “rainy day fund”). . The fund is currently at a statutory cap, which was recently raised to 18% of net general fund disbursements, triggering a provision that directs the remainder of volatility transfers to be used to service debt, including pension funds. The budgetary surplus certified at the end of the fiscal year is also credited following the same process. Additional contributions have been made to the state pension fund in each of the past five fiscal years, totaling more than $8.5 billion.
・61.6 million dollars in FY2020.
・$1.6 billion in fiscal year 2021.
・$4.1 billion in fiscal year 2022.
・$1.8 billion in fiscal year 2023.
· An estimated $935.7 million in fiscal year 2024.
Earlier this month, Treasurer Russell Russell announced that the state’s pension fund added $6.7 billion in assets in fiscal year 2024, thanks to additional contributions from the previous year and an 11.5% increase in performance. Updated funding ratios for SERS and TRS will be included in new actuarial valuations published this winter.
Contact: Tyler Van Buren
tyler.vanburen@ct.gov | (959) 529-2468
