ELECTION 2011, THE ISSUES: The Pension Fund

It's underfunded, everyone agrees. Here's what the candidates want to do about it.

It's nothing new, and it's not going away any time soon.

Hamden's pension fund needs an injection of cash, but how that will happen is up for debate. And it was last week at the Hamden Chamber of Commerce's mayoral debate.

"The pension is about dollars, and it is funded at about 26 percent," Democratic incumbent Mayor Scott Jackson said, "one of the lowest percentage in the state.

"Does that mean we are going bankrupt? No," he said.

In 2000, the fund was funded at about 70 percent, he said, but two years later that dropped to 50 percent. And since then, it's been even touger to keep the cash flowing into the account because of the economic downturn, he said.

"The economy has an impact, as well as what we decide to put into it," he said.

Newly hired town employees no longer are part of the town's pension plan, but instead participate in a state plan. And town officials are looking into instituting a 401K option for new hires, Jackson said.

They also are looking into pension obligation bonds, a contraversial move that would allow the town to bond the money it needs to bring the pension fund up to recommended funding levels.

"We need an influx of cash into the fund to generate additional income," Jackson said. "We are going to have to have a broad community conversation about how to fill this hole."

"In some ways, it's a ticking time bomb," said Republican challenger Matthew Corcoran. "This is one of the few problems in government that can only be solved with money."

The town's auditors recommended that $19 million be put into the fund this year, but only $3 million was allocated for it, Corcoran said. 

"We simply need to make a commitment to putting more money in it," he said.

But pension obligation bonds aren't the way to do that, he said.

"I am opposed to borrowing on taxpayer money," he said. "You could end up losing money that way."

He's also opposed to the proposed revisions to the Town Charter that allow officials to go that route, he said. 

"I'm opposed to giving the town authority for non-capital bonding," he said.

Independent mayoral candidate Charles Baltayan agreed. The problem is that the pension benefits of the past were more than the town could afford, he said.

"Many in town feel that the pensions town employees get don't mirror what the rest of us have, and that's just not right," he said. "Most corporations don't even offer pensions."

The town needs to terminate its pension program, Baltayan said. 

"It's not a good thng to do to people who put their trust in us to take care of them after they work for us," he said. "But we just can't afford it and we have to find a creative way of dealing with it."

It's not legally possible to terminate town pensions, Jackson said.

"If we could, we would have," he said. 

It's also not realistic to think the town could have afforded to put $19 million into the fund this year, Jackson said.

"But if we're bound to put money into it," Baltayan said, "why haven't we?"

"Nineteen million dollars is several mills of taxes," Jackson said. "There's no easy answer to this and it's going to take a lot of hard work."

Professive Mom November 04, 2011 at 10:44 AM
professive mom said ' DO NOT VOTE for council members who would vote to bond the pension in order to avoid termination - in my estimate - they are anyone receiving or who will receive a public pension'. I think anyone receiving a public pension has a conflict of interest on this issue - whether or not it is from the town of Hamden.
John P. Flanagan November 04, 2011 at 11:25 AM
And so at last it comes out. Teachers fund their own retirement but 'progressive mom" just doesn't like any public employees getting pensions, Sorry Luv, slavery and involuntary servitude was outlawed by Constituional Amendments just after the Civil War. Oh excuse me. In your case that would probably be viewed as War between the States. And all this was negotiated into contracts or enforced by State statute! And, those are pensions are funded either, like the teachers by contributing 6 to 9% of their salaries over the past 30 to 40 years and being ineligible foe Social Security and Medicare; or, by employees taking less in salaries than they should have been paid. And, why? To keep your taxes down. Want it changed? Negotiate it or change the law! And, as far as section 18-2 of the Charter is concerned, "Progressive Mom", again you're someone who simply hasn't done the homework. This was discussed, studied, investigated, argued and debated back between 1999 & 2001. And, the Council determined it has the power to bond anything they want simply by terming it a bondable expense and/or a capital project. Wisely, we on the Council, back then, decided not to bond the pension fund. End of Story! That dog not only won't hunt. It's been dead for 10 years. And the Charter? Most current Council people don't know where to find the copy they're supposed to have or know what's in it. Let alone refer to it.
Charles Baltayan November 04, 2011 at 12:58 PM
Mr. Flanagan: A sad commentary on the Legislative Council and their relation to any charter. Progressive Mom's point, which is well taken and in no way refers to slavery, only seeks to take the obligation for public employee retirement issues out of the hands of the taxpayer as the corporate world around them has done. It does not deny a fair wage for good work. The pension shoud be terminated for all public employees if it relies on the taxpayer to support it on any level: local, state or federal.
Professive Mom November 04, 2011 at 01:49 PM
Mr. Flanagan, I don't like your tone and don't call me 'Luv'. Are you saying working for low wages and no pension constitutes 'slavery'? Well then there are a lot of people ready for emancipation! I am in favor of fair pay, good health benefits, and a matching 401K package for public workers. That is more than many people get. The guaranteed pension is fiscally unsustainable, often abused (like workers inflating their last 3 years, or double dipping by working as consultants, etc. etc.), used as political bait for union endorsement, and unfair to taxpayers in the private sector who work hard and receive no such benefits. It is well documented that public workers are not paid less than their private sector counterparts - they are paid more. As far as the council - they know full well that they are now at the 10% ceiling for any future debt. This is why new buildings such as the fire station need to be built under a lease agreement - another mistake. There is no room for additional borrowing for any 'project' - capital or non-capital before it must go to referendum. The credit card is maxed out - and the council wants a new one worth $8 million dollars each year.
John P. Flanagan November 07, 2011 at 03:18 PM
First, you set the tone by pontificating without knowledge. Second, i shall refer to anyone in that category, especially who hides behind a nom de plume in a political discussion, any way I wish. Third, the 10% limitation applies to percentage of the yearly budget and not a day longer. Fourth, whether the limit has been approached, or reached, can depend on the organization of the payment schedule. Fifth, there is absolutely no category such as "non-capital" bonds. However, I notice that you don't address that. Apparently, homework is not your strong suit. Non-capital, with relation to finance, is a term which does not exist in economics or finance. It may be a lovely innovative and even original term, invented by a lawyer, possibly referring to other than "money, goods, property, contracts or obligations owned, or possessed, by individuals, groups, corporations or government bodies"., But it's a term which doesn't exist within the restrictions placed on the bonding power of government. That it is included within the added 60 pages of verbiage cluttering the proposed new charter is rather sad. It's not the only fantasy used for that document. However, it will be the first item that will be used to attempt to stop a bonding issue. And, it won't work. Also, last time a Mayor tried to sell and lease back out own property during the Amento years, it was stopped. It's a charade which attempts to flim-flam the public. Rather like the phrase non-capital.


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