Shawn Wooden, Connecticut’s new State Treasurer, has put forth a plan that utilizes Connecticut Lottery profits to support the Teacher’s Retirement Fund. Currently, the $17.9 billion fund is 56% funded. The fund’s bonds already cost the state $1 billion a year and could reach $6 billion by 2032.
If state legislators decide to move forward with the plan, it would create the TRF Special Capital Reserve Fund. It would have an initial funding level of $380.9 million. If the teacher’s retirement fund needed extra cash flow, money would be pulled from the reserve fund to fill the gap. Additional revenue from the lottery would be transferred to the TRF Special Capital Reserve Fund to make sure it never falls below $380.9 million.
This plan is very reminiscent of what New Jersey did last year under former Governor Chris Christie. It will be up to Connecticut’s legislators to see if Wooden’s plan is implemented.