February 22, 2018

Lembo says staff has eliminated retirement backlog

PHOTO | Contributed
PHOTO | Contributed
Comptroller Kevin Lembo

Comptroller Kevin Lembo said Thursday a retirement backlog has been eliminated that for decades undermined retirement administration efficiency and cost Connecticut millions of dollars in interest.

The massive undertaking was accomplished through a combination of automating retirement payroll calculations – shifting from a manual to electronic system – and an intensive focused review by retirement audit and payroll staff, Lembo said.

Under the old system, when state employees left state service, a preliminary slightly reduced estimated pension payment was provided. Subsequently, each retirement had to be manually audited to ensure accurate calculation of salary history, overtime, hazardous duty and many other factors that could complicate these calculations.

The retirement backlog dated back to at least 1992. Previous attempts to reduce it were undermined by frequent early retirement incentives that compelled thousands of employees to retire at once – making it impossible for a manual finalization system to keep pace, Lembo said.

As a result, the finalized audits required years to accomplish and ended up requiring the state to pay years' worth of interest on back payments. When preliminary pensions were overestimated in rare cases retirees were forced to pay back to the state any overpayment. Annual costs for these interest payments over the years ranged anywhere from $400,000 to nearly $850,000, he said.

By incorporating retirement auditing and payroll into the state's automated system, retirements are now more rapidly finalized – ensuring, he said, no recurrence of a retirement backlog.

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