HARTFORD -- Governor M. Jodi Rell yesterday signed legislation that authorizes the borrowing of money to reduce a $6.9 billion shortfall in the state teachers' pension fund.
The law calls for issuing $2 billion in pension obligation bonds, and it requires the state to fund the pension system at 100 percent of the actuarial-recommended level, which the government failed to do from 1992 to 2005.
"Teachers should not have to worry that there will be insufficient funds for their retirement pensions," Rell said in a statement.
The nonpartisan Office of Fiscal Analysis said the net impact of the bill would be to reduce the teachers' pension fund liability by $1 billion.
While assets would increase by $3.6 billion from the bond issue and other moves, there would be an increase of $2.6 billion in liability from reinstating guaranteed cost-of-living increases for retired teachers.
The pension fund now holds $10.2 billion, Rell's office said.