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Connecticut’s state employee unions are gearing up to rewrite a pension deal they negotiated and overwhelmingly approved less than a decade ago.
SEBAC-affiliated unions have made “Fix Tier IV” a priority heading into the 2027 pension and health care negotiations.
The language mirrors New York’s successful “Fix Tier 6” campaign, which won richer pension benefits for newer public employees.
There is one problem with that pitch: Tier IV was the deal they made.
The Deal SEBAC Made
When Connecticut lawmakers approved the 2017 state employee deal, Senate Majority Leader Bob Duff (D-Norwalk) touted it as a major step toward making government “more affordable and more efficient for taxpayers.”
Duff said the agreement would save taxpayers roughly $24 billion over 20 years and “completely restructure Connecticut’s pension system for the future.”
So far, those savings have not fully materialized. Comptroller reports show the agreement was cumulatively $537.9 million behind its projected savings through fiscal year 2025, with only one year exceeding its target.
The State Employees Bargaining Agent Coalition (SEBAC), which bargains over pensions and health benefits for Connecticut’s state employees, negotiated the deal.
One of its biggest changes created Tier IV, a retirement plan for employees hired after July 31, 2017. The new tier was designed to lower the state’s long-term pension costs by making retirement benefits for future hires less expensive than the older tiers. Tier IV combined a traditional pension with a defined-contribution account and required newer employees to put more toward retirement than workers hired earlier.
Union leaders then went out and sold the deal.
Eighty-three percent of votes cast backed the pension, health care and other benefit changes, and 15 of SEBAC’s 16 unions endorsed those changes.
The unions got plenty in return. Bargaining units that accepted the wage agreement received four years of protection from layoffs, while the pension and health care agreement — already extended through 2022 under the 2011 SEBAC deal — was pushed out another five years, through 2027.
AFSCME Council 4 Executive Director Sal Luciano acknowledged the effort union leaders put into getting members on board.
“We hoped if we explained it, everyone would pass it,” Luciano said after the vote.
They did.
At the July 2017 ratification press conference, union representatives stood behind signs declaring “We did our part” and “Collective bargaining works for CT.”
Ron McLellan, then-president of Connecticut Employees Union Independent, SEIU Local 511, was even more enthusiastic. He told members they had an opportunity to emerge from the state’s fiscal crisis with “the best and longest public sector pension & healthcare contract in the country.”
Now Comes ‘Fix Tier IV’
The complaints center on two parts of the plan: the pension multiplier and the risk-sharing provision.
CSEA SEIU Local 2001, one of the unions participating in SEBAC, says the multiplier — the formula used to calculate a worker’s pension — is too low and that the risk-sharing provision puts too much financial risk on newer employees.
Put another way, a higher multiplier would mean a bigger guaranteed pension check in retirement. Changing the risk-sharing provision could mean employees pay less when the pension fund misses its investment target, leaving the state to absorb more of the shortfall.
So far, that risk-sharing provision has been triggered once. After the pension fund missed its investment benchmark, Tier IV employees were required to make an additional 2 percent pension contribution for one year.
SEBAC opposed the surcharge, called it a “financial hardship” and said the provision would likely become an issue in the 2027 pension and health care negotiations.
CSEA has not released a detailed bargaining proposal, so taxpayers still do not know how far the unions want to go — or what the bill would be.
New York Shows Where This Can Go
New York public employee unions spent years campaigning under the slogan “Fix Tier 6,” targeting the less-generous pension system created for newer government workers.
That campaign paid off in 2026 with changes that lowered contribution rates for many Tier 6 workers and allowed qualifying teachers and teaching assistants to receive an unreduced pension at age 58 after 30 years of service instead of waiting until 63.
New York State United Teachers President Melinda Person credited organized labor directly, saying the Tier 6 deal showed that when workers “organize and stay united, change is possible.”
That win didn’t come cheap — the deal is projected to cost New York taxpayers $557 million a year. It shows that “Fix Tier” campaigns can carry a real price tag if they succeed — and CSEA hasn’t said what its version would cost Connecticut.
No Do-Over for Tier IV
Tier IV was not some surprise provision dropped into a contract after everybody went home. It was the part of the 2017 bargain meant to curb pension costs for the next generation of state workers.
SEBAC negotiated that bargain; union members overwhelmingly approved the benefit changes, and organized labor received valuable protections in return.
Now the unions want to undo the portion designed to save taxpayers money.
Connecticut should not “fix” Tier IV by making it more generous. If lawmakers change it at all, they should move in the opposite direction: require employees to contribute more toward their pensions and health care, or move future hires entirely into a defined-contribution retirement plan.
The difference is simple. A traditional defined-benefit pension promises workers a retirement benefit based on a formula. If the pension fund falls short, the state remains responsible for funding the promised benefits, leaving taxpayers on the hook for the gap. A defined-contribution plan sets the state’s contribution upfront and puts the money into an employee’s individual retirement account.
Tier IV already moved Connecticut partway in that direction. Sweetening the guaranteed-pension side now would undo the reform taxpayers were promised in 2017.
SEBAC can ask for more in 2027. Whoever wins the governor’s race will be across the bargaining table — and should treat “no” as a complete sentence.
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