Connecticut’s backlog of retirement applications has been growing steadily, and the situation has the potential to continue long into the future, according to a recently released audit report.
The Retirement and Benefits Services Division had a backlog of approximately 6,500 retirement applications not yet finalized as of April, a number that swelled considerably following the 2003 Early Retirement Incentive Program, according to an audit of the State Comptroller’s Office unit. The ERIP was offered for a few months in 2003 to state employees as a strategy to trim the state’s payroll costs.
The state had long struggled with backlog problems, which averaged about 1,200 before the 2003 ERIP. Even though the early retirement offer has been off the table for five years, the state has been unable to catch up. The backlog skyrocketed to between 5,500 and 6,500, where it continues to hover. Notably, the state has not finalized benefits for about 1,500 retirement applications dating from the 2003 ERIP.
While the finalization of retirement benefits represents just a small amount owed to each retiree, the cost adds up for the state. The division must pay 5 percent interest per year on any lump sum amount owed to the retiree at the time of finalization that has not been paid within six months.
Nagging Problem
Most of the old records have not yet been digitized, making finalization a much more difficult process. Though records are now digitized, the retirement division may still be dealing with paper records 30 years from now, which makes streamlining the finalization process an uphill battle, said Robert Jaekle, auditor of public accounts.
“Thirty years from now it shouldn’t be a problem, but that’s not a good enough answer for thousands of people about to enter retirement,” Jaekle said.
Both Jaekle and state Comptroller spokesman Steve Jensen noted the hefty backlog has been a sore spot for legislators.
Steps toward decreasing the backlog included hiring consultants in March 2007 and authorizing $80,000 worth of overtime costs charged to the State Employees Retirement Fund. The division also requested additional clerical positions and two retirement benefits officers, but those positions have not been added yet, Jensen said. In the audit report, the division painted a bleak picture for the backlog problem if it does not receive extra help.
“Significant progress will not be made … until the state makes an equally significant commitment in terms of additional personnel and resources to enable full automation of the retirement calculation and benefit audit process,” the division said.
