Effort stalls to change Bradley employees’ retirement plan
The Bradley International Airport operator’s proposal to change the retirement plans of nonunion employees has been dealt a major setback, after the state legislature’s Transportation Committee signaled that it would not move forward this year with any legislation to accommodate that plan.
Connecticut Airport Authority officials have called for legislation that would allow it to start moving non-union employees from the state retirement system to defined-contribution plans, in an effort to save millions of dollars, savings that it said are necessary to keep Windsor Locks-based Bradley attractive to increasingly cost-conscious airlines during the coronavirus pandemic.
But the Transportation Committee approved last week HB 6426, without revising the bill to support the CAA’s proposed changes. HB 6426 focuses on a contract for security services at Bradley between the CAA and the state Department of Emergency Services and Public Protection and safety standards for meteorological-evaluation towers.
As a result, the Transportation Committee will not be drafting or advancing any legislation this year related to changing CAA non-union employees’ retirement plans, according to state Rep. Devin Carney, R-Old Saybrook, a ranking member of the committee.
“Though doubtful, it is possible these changes could be heard in another committee,” Carney told Hearst Connecticut Media.
CAA officials said they would not give up on the proposal.
“We are disappointed that the bill does not include the CAA’s proposed changes to non-union employee retirement plans,” CAA Executive Director Kevin Dillon said in a statement. “However, we plan to continue working with the legislature to identify alternatives during the 2021 legislative session.”
Messages left for state Rep. Roland Lemar, D-New Haven, the Transportation Committee’s chairman, were not returned.
While the CAA’s operations are entirely funded by its revenues, it functions as a quasi-public agency. Its approximately 150 active employees — most of whom are based at Bradley — participate in the state retirement system, which covers state employees and public-school teachers. The system largely comprises pension plans.
CAA officials said that their organization is shouldering a heavy burden in its employee-benefit contributions to help the state make up for years of retirement underfunding. In total, Connecticut faces more than $40 billion in unfunded retirement liabilities.
Implementing a defined-contribution framework could initially save the CAA up to $1.25 million per year and eventually up to $3 million annually, according to the organization.
Current non-union employees would choose whether to stay in the state system or set up a 401(a) plan that would essentially be the same as a 401(k) offering. All new employees at a certain point would join a 401 plan.
But Transportation Committee members were not persuaded. Some of them said that they were reluctant to pursue changes only for CAA employees because such revisions might more broadly affect state pension funds and collective-bargaining agreements.
“I think it is always worth exploring potential ways to find savings in government expenses and vetting those proposals to find if they make sense or not,” Carney said. “In this instance, there appeared to be considerable pushback, and those issues should be addressed internally at the CAA before coming to the legislature.”