🔒City heads in right direction on pension shift

We know there are no silver bullets to solving the city of Hartford's fiscal crisis, but we applaud Mayor Luke Bronin and the city council for taking a small, if not symbolic, step to rein in long-term costs.

Last week, the city council gave Bronin and city Treasurer Adam Cloud permission to devise a plan that would require new, nonunion city employees to join a 401(k)-type retirement plan rather than a more costly defined-benefit plan.

The move away from traditional pensions to a defined-contribution model has been occurring in the private sector for years as employers make efforts to rein in costs, and it is reasonable to expect the public sector to finally follow suit.

Hartford is currently spending $41 million in annual pension contributions, and that number, along with other long-term debts, is expected to rise in the years ahead.

With the city facing a $22.6 million deficit this fiscal year, and a $50 million shortfall next fiscal year, all options to curb short- and long-term costs must be on the table and acted upon, particularly if Hartford officials want extra financial support from the state.

Bronin, of course, has been attending town hall meetings in nearby suburbs to garner regional support for a bailout of the city, which faces the prospects of bankruptcy if it doesn't receive added state funding.

In nearly all towns he's visited, Bronin has faced some criticism and skepticism from residents who feel Hartford alone is responsible for its fiscal quagmire, and is undeserving of added support. Other residents wanted to see greater progress in the city reining in its costs.

Moving to a 401(k) plan is a step in the right direction.

An analysis still needs to be done to determine how much cost savings the transition would yield. To be clear, it won't have a dramatic effect because it will only impact newly hired, nonunion employees, who make up only a sliver of the city's 1,300-person workforce.

This should only be the first step. Forcing all city employees, including union members, to move away from pensions to a defined-contribution plan must be the ultimate goal.

Liberal members of the city council unsurprisingly raised red flags about the move, arguing city employees shouldn't have to suffer as a result of the city's fiscal crisis. They argue pensions offer more reliable retirement security.

That may be true, but the city can no longer afford to give away generous benefits that seemed reasonable in good fiscal times.

State must follow suit

As the city begins to move away from pensions, we urge the state to follow suit. To his credit, Gov. Dannel P. Malloy has aggressively tried to deal with the state's own pension crisis. Last week, the Appropriations Committee approved a plan that would allow Connecticut to defer billions of dollars in required contributions to the state employees pension fund until after 2032.

The move would prevent annual pension payments from reaching unaffordable levels — as high $6.5 billion by 2032. It also means the state will prolong the agony of paying off pension debt well into the future, saddling future generations with the burden.

But more must be done to actually rein in costs, not just push them to a later date. Malloy and the legislature must demand benefit concessions from state labor unions.

Republicans have suggested removing overtime earnings from the pension calculation and requiring employees to contribute 4 percent of their pay toward their benefits. Those are reasonable demands in these difficult fiscal times.