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Connecticut Officials Vow to Close Loopholes in Disability Pension System

State leaders promised a series of sweeping reforms to address problems in the disability pension system, just hours after the publication of a report highlighting poor management.

Top Connecticut state officials — including the governor, legislative leaders and those overseeing the retirement system — vowed to make a series of sweeping reforms to address glaring loopholes in Connecticut's $130 million taxpayer-funded disability pension system, which provides benefits to thousands of former state workers.

The promises — including plans to conduct more investigations to ensure only those eligible for disability pensions receive them — came hours after CT Insider published an investigation outlining a lack of fiscal guardrails of the system and an absence of enforcement when recipients ignore the rules.

The report highlighted a series of problems, including: many former state employees collect disability pensions despite working new jobs and making significant income; hundreds of recipients have not submitted surveys used to determine if they still qualify; state officials have routinely failed to find less-exertive state jobs to transfer workers who were cleared by doctors for such a role after an injury.

Reporters began the investigation after learning a state senator, Paul Cicarella, received the largest pension in the state in 2022 when he was paid $412,000, largely from one-time retroactive payments.

That investigation found Cicarella became eligible for a pension even though doctors determined he was capable of working a non-exertive job with his partial disability; state officials never found him such a role. He also has been able to collect a disability pension despite questions from state officials, including when they discovered after his injury he worked as a wrestling coach and had opened multiple businesses. His pension was revoked due to such questions but reinstated after he became a senator and later boosted significantly.

Cicarella was adamant he received no special treatment as a state senator and is just collecting benefits entitled to him by law.

Taken individually, most of the concerns surrounding Cicarella's disability pension are common among many of the recipients. But Cicarella's case stands out because it highlights so many shortfalls of the system simultaneously.

CT Insider's investigative report became a major point of discussion at the state Capitol complex soon after the story published online Wednesday.

"When there's a case like this, it really calls into question the system," Sen. Julie Kushner, the co-chair of the legislature's Labor Committee, which oversees benefits provided to state employees, said during an interview. "Because this has been brought to our attention, we do have an obligation now to address it."

Other top lawmakers, officials, and union leaders echoed that sentiment.

State Comptroller Sean Scanlon — whose office runs the state employees' retirement program under the retirement commission's supervision — has "plans to unveil a comprehensive series of reforms next week," his spokesman said.

Speaker of the State House of Representatives Matt Ritter said he spoke with the comptroller and along with changes that office plans to make, Ritter said he expects lawmakers to consider additional measures before they adjourn May 8.

"It's an important issue that we will find time to address," said Ritter, D- Hartford. "The story demonstrates there are a lot of interesting questions that involve hundreds of people. I think that's where you rise to the level of the legislature having to do something and the comptroller having to do something."

Hours after the story was published, Gov. Ned Lamont said during a wide-ranging interview with CT Insider about disability pensions that he is working to craft specific solutions. He said his team is figuring out whether that will come in the form of proposed legislative fixes, executive orders, regulations or administrative changes.

He said the investigation "has us doing some work" to begin to fix the shortfalls so that only those who should be getting disability benefits do, and so that those who have been cleared by their doctors to work non-exertive jobs are transferred to new roles.

Lamont appoints the majority of the members, including final say over who is chair, of the State Employees Retirement Commission, which determines who does, or doesn't, get a disability pension. His administration is also tasked by state law with finding new state jobs for those unable to return to their exertive state job. Officials at the agency responsible, the Department of Administrative Services, do not believe they have ever successfully found a state job to transfer someone to.

"We should do better on that," Lamont said. "Maybe they can't keep working at [the Department of] Correction, but there's a variety of other places to keep them employed as good members of our state employee workforce."

He said he spoke with the DAS commissioner after the story ran and is working on a plan to improve the state's process for finding new jobs for employees whose doctors say can work rather than paying for them to retire.

His budget secretary is also tasked by state law with approving — or denying — applications to significantly boost pension payments for those deemed to have "extraordinary circumstances." That office has approved every request that has been made to it and has no standards for granting that status other than that person collecting a regular disability pension.

Lamont said he wants the legislature to clarify the law that allows for these boosted pensions so it's clear who his administration should be granting "extraordinary circumstances" status.

"We've got to work with the legislature to see what the rules of the road" should be, he said.

The governor also said he was surprised to learn hundreds of recipients aren't turning in the surveys and wants completion of those mandatory for people to continue receiving benefits.

"You're going to fill out those forms or you're not going to get the benefit," Lamont said. "For folks who don't play by the rules — folks who maybe inadvertently even are not providing us the income data or maybe are purposely not providing the data because they're earning a lot more and also collecting a benefit — we're gonna be really strict there and come down harder on them."

He also wants to see more investigations than the six that happened last year to make sure there is proper oversight of those collecting benefits.

"The investigations of those who are abusing the system are gonna be ramped up big time," he said.

Kushner, the senate chair of the Labor Committee, said the most jarring problem with the system is that some former state workers are collecting disability pensions while making significant income from a new job.

CT Insider reported that when someone reports significant outside income officials virtually never follow state law and reduce their pension so it's not above their prior job's current pay. In one case, a former nurse collected a $33,000 disability pension while making $792,000 at a pharmaceutical sales job. In 2021, 14 retirees made over $100,000 at new jobs while still collecting disability pensions. Another 59 people made over $40,000.

Meanwhile, many former state employees with significant disabilities and unable to work are provided very little to live on. The average state disability pension last year was just under $38,000.

"There needs to be an adjustment so that we are taking care of the most disabled people who cannot work at all," Kushner said. "That should be our top priority. I feel like there's an imbalance here in what we are doing as a state for people who can't work in that exact same job, but find other employment that actually earns them more money than they were making as a state employee. There's something wrong with that."

CT Insider reported that discussions by the retirement board about whether to grant someone a disability pension take place entirely behind closed doors, including deliberations about if someone's new job is "suitable and comparable" — a murky standard that Kushner said she wants to be clarified further with the union so only those who should be getting disability benefits are.

She said she has spoken with officials at the State Employees Bargaining Agent Coalition (SEBAC), the union coalition representing state employees.

"I've had conversations with representatives of SEBAC, and I think that we all want to see this addressed, and I'm hopeful that we can find a good solution to the problem because it needs to be fixed," she said.

Danny Livingston, the union's chief negotiator, acknowledged the problems in the system and an eagerness to address them in a statement.

"We have long pursued win/win solutions that would improve the process for all concerned. We hope to continue this work with the Lamont administration to explore those ideas," he said.

Meanwhile, those who have long advocated for those with disabilities were shocked to see a system with glaring differences in benefits available to injured state workers compared to a "frayed safety net of benefits for the public" who have disabilities.

"It just shows the difference between the safety nets for some people versus the safety nets for others," said Kathy Flaherty, executive director of the CT Legal Rights Project. "The reality is I think everybody deserves a safety net. But that safety net keeps getting shredded, and shredded and shredded for the people I work with."

She pointed to the case of the former state nurse who was collecting a $33,000 disability pension while also making $792,000 at a pharmaceutical sales job.

"The folks that I work with would be thrilled with a fraction of what that person is receiving," she said referring to the $33,000 pension. "It's the folks that I serve who seem to be in the pot of dollars that there never seems to be money for — and I think that that is frustrating."

(c)2024 The Hour (Norwalk, Conn.) Distributed by Tribune Content Agency, LLC.
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