Leaders of Connecticut’s teachers’ unions are applauding the new trust established in September by the Teachers’ Retirement Board (TRB) to better protect and sustain beneficiaries’ healthcare over the long term. The board last month voted unanimously to establish the legal structure after receiving approval from the Office of the State Attorney General.
Connecticut Education Association (CEA) President Sheila Cohen said, “Teachers contribute their hard-earned dollars to the fund, so they count on the fund to be safe. The latest move by the Teachers’ Retirement Board helps teachers rest assured that their futures are secure.”
“We have always said that a more secure retirement fund will enable and empower Connecticut’s teachers—who have dedicated their careers to educating our children—to retire with dignity,” said AFT Connecticut President Melodie Peters. “We applaud the TRB’s efforts because they’re consistent with our commitment to ensuring that all Americans—whether they’re working or retired—have access to quality, affordable medical coverage.”
Historically, the retiree healthcare funds, which are managed by the Office of State Treasurer Denise Nappier, have needed to be invested in a short-term investment fund since the retiree health program is funded on a pay-as-you-go basis. State Attorney General George Jepsen also was instrumental in establishing the trust.
Cohen said, “Creating a trust for teachers has been on Nappier’s radar for some time. Her goal has been to be able to invest over the long-term, allowing her to yield higher returns, which in turn keeps the fund healthy. Since the new trust provides a more productive way of doing that, we’re excited.”
Cohen also added, “We are pleased that Jepsen stepped up to the plate to help teachers, recognizing that their years of service and dedication to children make them a priority.”
“The Board deserves recognition for their tireless efforts for the past two years to establish this new trust. In particular, we appreciate the Treasurer for her leadership on this issue—and for committing the time and resources of her office staff who put the pieces together,” said Peters.
The new trust prohibits funds from being used for any purpose other than paying for retiree health care. As the amount of the trust begins to grow, the funds will be invested over a longer investment horizon, allowing for higher returns and greater security for the fund.
“I voted to accept this new trust because it’s a ‘win-win’ for retirees and Connecticut taxpayers,” said Al Bredehorst, who was elected in 2013 to serve on the Teachers’ Retirement Board. “A more secure retirement isn’t just good for beneficiaries; it’s also good for the economy. Most teachers I know don’t plan to stash their retirement income in some offshore Cayman Islands account. They’re going to spend most of it right there in our communities,” said Bredehorst, an active member of the Meriden Federation of Teachers.
Nappier will be responsible for the long-term asset allocation of the trust with input from the Investment Advisory Council (IAC), which includes two CEA members and a member of AFT Connecticut. The IAC was created by the legislature to assist the Treasurer regarding policy for investing the Connecticut Retirement Plans and Trust Funds through distinct approval, review, advice and notification roles.