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News from State Senator Tim Larson

February 8, 2016

Capitol address
Legislative Office Building
Room 3600
Hartford, CT 06106-1591

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Business is Ramping Up in Region

BizRecently, Cyient, Inc., a multi-faceted aerospace engineering design and manufacturing firm, announced it is expanding its operations in East Hartford.

Cyient, which currently employs 456 full time workers in Connecticut, plans to add 85 full-time jobs over the next three years.

The aerospace supplier recently relocated its United States headquarters to 99 East River Drive in East Hartford. The company is also in the process of expanding its delivery center located at the same site. In total, the company is taking up an additional 15,500 square feet to expand its operation and accommodate employee growth over the next three years.

This news is more proof that our agreement with Sikorsky is a good investment that is already growing jobs up and down the supply chain in Connecticut's aerospace manufacturing sector. Cyient is a major employer in East Hartford, and a supplier for both Sikorsky and Pratt & Whitney. Now that Pratt & Whitney is headquartered in East Hartford, we are starting to see more and more companies like this clustering in our district--and that is great news for our region and state.

Additionally, South Windsor has great business news of its own: The Hartford Business Journal recently reported that Stamford's Hexcel Corp. has invested $10 million in South Windsor additive manufacturer Oxford Performance Materials Inc. (OPM), for a total equity investment of more than $25 million.

The momentum continues to build in our region when it comes to the aerospace manufacturing industry, proving that our district really is what I like to call "aerospace alley."

Taking Action to Stabilize the State's Pension System

It's no secret that Connecticut has been grappling with how to fund our state pension system in the last few years. The sins of past administrations from the 1930s through the early 2000s--when no contributions were made to the pension fund--have come back to wreak havoc on state finances.

In 2011, the governor and legislature began making the necessary contributions to the fund, rather than kick the can down the road as past administrations have done--but that of course comes with a cost. The state's budget deficit exists largely because we are being responsible and taking action by contributing to the fund annually.

Recently, we took another important step by approving a plan to manage the state's unfunded pension liability over the next 30 years and fully fund Connecticut's pension system.

The agreement with the State Employees Bargaining Agent Coalition (SEBAC) was previously approved by the State Employee Retirement System (SERS), before gaining bipartisan approval of the budget--writing Appropriations Committee at the end of January, before it was approved by the Senate and House of Representatives early this month.

I appreciate that Governor Malloy has taken bold steps to make the payments over the last several years to meet our pension obligations, and I congratulate the state employees who worked on this negotiation and were willing to come to the table. These are difficult times, there's no way around that, but this solution is certainly a step in the right direction and I believe our best days are ahead of us. There are opportunities ahead of us, but for today this is a very good plan which will help us balance our state budget.

Under the agreement:

  • The assumed rate of return will change from 8 percent to 6.9 percent, putting us under the national average of 7.62 percent.
  • Changing the assumed rate to 6.9 percent significantly increases our calculated unfunded liability and our normal cost calculations, but it better insulates us from volatility in our unfunded liability in the future.
  • In FY 16, paid $300 million for costs associated with current employees and $1.2 billion in costs associated with the unfunded liability.
  • Without the changes in this agreement, payments will skyrocket, potentially hitting $6 billion by 2032.
  • With the changes in this agreement, payments will level off at $2.6 billion in 2021.
  • FY 18 costs for current employees will be $365 million, and costs associated with the unfunded liability will be $1.282 billion.
  • If we change the assumed rate of return without adopting the agreement, contributions to the pension fund will have to increase in FY 18 by $570 million.

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My mailing address is:
Senator Tim Larson, Legislative Office Building, Room 3600, Hartford, Connecticut 06106
Capitol telephone: 860-240-0511

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