Two recently released independent reports show growth in Connecticut’s pension funds for state employees and for teachers.

Members of Gov. Ned Lamont’s administration, including Comptroller Sean Scanlon and Treasurer Erick Russell, recently announced actuarial assets in the State Employees’ Retirement System (SERS) grew by more than $2.3 billion in fiscal year 2025 and by more than $1.6 billion in the Teachers’ Retirement System (TRS).

Unfunded liabilities in SERS also decreased from $19.2 to $17.6 billion. According to the reports, the funded ratio in SERS increased to 59.6 percent, and the funded ratio for TRS rose to 63.7 percent.

At a press conference announcing the release, Russell, Scanlon, Lamont and Office of Policy and Management interim secretary Josh Wojcik touted the state’s accomplishments in paying down its unfunded pension liabilities.

Russell said the state has made over $10 billion in additional contributions above what is required to the pension funds since 2021. In November, the treasurer’s office announced roughly $1.5 billion in additional payments had been paid into pension funds. Russell called it an “incredible amount of progress” and said it is the result of commitments made by Lamont and legislators to fund the pension system.

Russell further said that this not only impacts the pension fund, but has led to numerous credit rating upgrades and put the state in a position to make investments.

In 2017, Connecticut’s pension system was among the worst in the nation, with over $127 billion in unfunded liabilities. As part of the deal that implemented the state’s fiscal guardrails, when revenue placed in the Budget Reserve Fund reaches its cap excess is used to pay down the pension debt. Since 2020, those payments have resulted in more than $10 billion in revenue being paid toward pension debt.

“According to an analysis requested by Comptroller Scanlon’s office and conducted by Cavanaugh Macdonald, an independent actuarial firm, these contributions will save taxpayers $18 billion over the next two decades through reduced annual payment obligations. Without them, this year’s state budget would require an additional $850 in pension-related funding.” a press release announcing the improvements stated.

Russell also announced earlier this year that returns on the state’s trust funds and pension portfolio grew to 10.4 percent in fiscal year 2025, “surpassing the assumed rate of return of 6.9% for the third year in a row.”

At the press conference, Scanlon added that paying down the pension debt has put the state in a good place to deal with the “dual man-made crises” of a potential artificial intelligence bubble worrying Wall Street and uncertainty stemming from politics in Washington. Scanlong said Connecticut is better prepared than most states to “weather that storm.”

Lamont added that paying down the debt means the state has an extra $800 million in revenue that can be put towards programs like social services, improves public perception of the state, and also removes doubt for state employees about whether their pension will be available.

He added that the positive news doesn’t mean the state can take its eye off the ball. Though markets are currently at an all time time high, Lamont warned that capital gains are very volatile and the state can’t take returns for granted.

Lamont further said that he is worried about using volatile revenues for long-term operating expenses and said this is a mistake municipalities and the state have made for “many a year.” Lamont stated he wanted to be “very careful” about what happens with the budget so that the public can be assured it’s an “honestly balanced budget.”

But recent reports on Connecticut’s pension debt have a less rosy outlook. A recent study from the libertarian Reason Foundation found that Connecticut’s per capita pension debt was among the highest in the nation, trailing only behind Illinois. The study also found Connecticut has the 11th-highest unfunded pension debt liability in the nation.

The House Republican caucus criticized the news conference for not addressing returning additional available revenue as pension obligations are paid down to taxpayers.

“While pension funding ratios have improved, Connecticut still faces $79 billion in long-term debt obligations. My view of the state’s fiscal health isn’t as rosy as Treasurer Russell’s. As we’ve paid down pension debt, our annual required payments have decreased—creating new room under the state spending cap. Unfortunately, what we heard from Democrats today was how to spend that money, not how to return it to taxpayers. Tax relief was barely mentioned.” House Minority Leader Vincent Candelora said in a statement. “Democrats want to expand social services programming, and we know generous state employee raises are also on the table. It’s a troubling combination. If Democrats are serious about Connecticut’s housing affordability crisis, they need to address the elephant in the room: property taxes are crushing homeowners and renters alike. We should be using this fiscal breathing room for property tax relief, not growing government.”

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