In December 2016 (ratified by the General Assembly in February 2017), SEBAC and the Malloy administration agreed to remove the level of the wage amortization system, which slowed down unfulfilled commitments. The agreement eliminated “hot air balloon payments” that would have been prohibitive in the mid-2020s and re-started about two-thirds of the debt on a 2045 payment date. It also recommended that the Commission, for retirement, reduce the yield from 8% to 6.9%. Republican Senate Leader Len Fasano has questioned these budget savings because there is no agreement yet between the Lamont administration and SEBAC to change the payment of pension debts. As part of the 2017 SEBAC agreement, lawmakers called for regular “stress tests” to test the viability of the SERS and TRS pension funds. The 2019 stress test showed that changes in 2011 and 2017 have sharply stabilized the state pension fund. Former Governor Dan Malloy, whose government negotiated the 2011 and 2017 agreements with SEBAC, said, “The analysis shows that the steps we have taken to restructure and reform SERS have been incredibly effective.” The agreement also doubled penalties from 3% per year to six per cent per year for public servants who retire early and included additional health insurance premiums for pre-retired retirees. All public servants, regardless of the date of employment, had to increase their contributions for retired health care by 3%. The normal retirement age has also been increased by three years for current workers who will retire after June 30, 2022.
The public service increases described in the 2017 SEBAC agreement were estimated by the Bureau of Fiscal Analysis at $353 million a year, but emails between former Senator Len Suzio, R-Meriden, and OFA analyst Don Chaffee show that operating costs could be higher. According to the 2017 Email Exchange, wage increases and wage increases in general are in addition to annualized costs of $34 million to Connecticut, bringing the total cost to $387.8 million by 2022. The 2017 SEBAC agreement offered a one-time lump sum bonus of $2,000, two general salary increases of 3.5 percent, combined with two level increases for unionized public servants and the Connecticut Union Performance Agreement extended until 2027.