Pension Commission Still Wrestling With Asset Question
HARTFORD, CT — Would $500 million in state-owned property be enough to create a trust fund to help stabilize one of the nation’s worst under-funded pension liabilities? Should state parks and forests be exempt from consideration? What about polluted or historic properties?
Those were just a few of the unanswered questions the Pension Stability Commission wrestled with Thursday.
Rep. Jonathan Steinberg, D-Westport, said in the next few weeks the commission, which is already in overtime, will have to start making recommendations to the new legislature.
He said the commission won’t have time to go over every asset the state owns and determine whether it could be added to a Legacy Obligation Trust. However, he sought to get the commission to offer up some guidelines for what property might be included or excluded.
Under the Legacy Obligation Trust model, the trust would get credit against an unfunded liability based on the valuation of the asset in the trust.
But not every member of the commission believes that model is feasible.
Erin Choquette, legislative and policy adviser at the state Department of Administrative Services, questioned whether there are enough assets to generate enough money to help prop up the pension plans.
“I don’t think we should discount the LOT, but based on my discussions with Paul I’m not sure there are sufficient assets to create a LOT at this time,” Ted Murphy, a Litchfield real estate professional on the commission, said.
Choquette said she doesn’t believe anyone on the commission is uncertain about how they feel regarding the LOT concept.
The commission is still working on creating an inventory of state assets. Working through the legal obligations of each piece of property will require greater expertise than the commission possesses.
Steinberg said back when the commission was formed the initial goal was to create $1 billion in value to support the pension plans.
“No matter how many assets there are it’s not solving the entire pension problem,” Steinberg said.
Michael Imber, another member of the panel who has touted the LOT concept, said this would be the first time any government has formally tried to evaluate this idea.
The commission is also considering recommending using assets from the Connecticut Lottery to shore up the Teacher’s Retirement System. That was a recommendation by former state Treasurer Denise Nappier.
The commission suggested the new state Treasurer Shawn Wooden should have an opportunity to weigh in on the issue.