Sen. Ryan Fazio Advocates for Enhanced Pension Management and Accountability

HARTFORD, CONNECTICUT – State Senator Ryan Fazio (R-Greenwich) today speaks out in support of S.B. 1557, an act aimed at improving the management of Connecticut’s state pension assets. The proposed legislation will establish a Board of Directors that will share fiduciary responsibility among its members while keeping the state treasurer in the role of chairman and CEO to create an oversight structure.

Currently, the state treasurer manages approximately $60 billion in pension assets for state employees and retirees. Despite significant investments, a recent landmark study by the Yale School of Management has revealed that Connecticut’s pension returns have notably lagged behind other states. The study highlights that Connecticut ranked in the bottom 10 for state pension returns from 2014-2023, resulting in billions of dollars in higher taxes.

“Connecticut is one of only two states, alongside North Carolina, that entrusts sole fiduciary responsibility for its pension investments to a single person, the elected treasurer. This system has harmed taxpayers enormously over decades. One of the only states with worse returns over time is North Carolina, and now they are about to change their system,” said Sen. Fazio, “The bill I introduced creates a more accountable and transparent investment framework that protects taxpayers and ensures our state employees and retirees have more secure pensions.”

Yale Professor Jeffery Sonnenfeld and researcher Steven Tian, who co-authored the landmark Yale study, testified in favor of S.B.1557 today:

“With North Carolina’s new Treasurer currently making a push to change North Carolina’s sole fiduciary model towards a board oversight model, Connecticut would become the only state out of 50 with this sole fiduciary model of governance over our state’s pension funds. This is not just some obscure governance debate but a very real issue of consequence, with billions at stake, because as a reminder, our state’s pension funds manage $60 billion of the retirement funds of our public employees, and every 1% of better performance amounts to $600 million more for our state.”

Had Connecticut’s investments performed at the average level of other states, the study estimates a potential $10 billion could have been added to the state’s pension assets—translating to a $6,250 tax reduction for the average household.

“By sharing fiduciary responsibility among a board of professionals, rather than concentrating $60 billion in legal power in one person, we can significantly improve our returns as a state, ultimately benefiting both our public employees and the taxpayers who support them,” Sen. Fazio added.