$1.3 billion in excess revenue from Connecticut’s volatility cap program was deposited into its two public pension systems—$685.1 million for state employees and $618.9 million for teachers.
The transfer was triggered after the Budget Reserve Fund reached its legal ceiling of 18% of net General Fund appropriations, sending additional volatility-capped revenue to debt reduction instead.
Treasurer Erick Russell said the payment will strengthen the funds, cut long-term pension debt and lower annual taxpayer costs; the state also expects another $114 million in operating surpluses to reach the funds by December.
Over the past seven fiscal years, Connecticut has directed $11 billion of excess contributions to the pension systems, including $4.1 billion in 2022, under fiscal guardrails adopted in 2017 to capture volatile revenue.