OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
HR-11
RESOLUTION PROPOSING APPROVAL OF A MEMORANDUM OF
AGREEMENT BETWEEN THE STATE OF CONNECTICUT AND
THE ADMINISTRATIVE & RESIDUAL EMPLOYEES UNION.
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 22 $ FY 23 $
Various State Agencies Various - Cost 326,210 356,511
State Comptroller - Fringe Various - Cost 49,169 53,736
Benefits1
Note: Various=Various
Municipal Impact: None
Explanation
This resolution proposes approval of an agreement between the
State of Connecticut and the Administrative and Residual (A&R)
Employees (P-5) Union concerning certain employee classifications.
The agreement moves 62 non-union positions into the A&R bargaining
unit. This agreement covers FY 21 and is retroactive to July 1, 2020. The
job classifications are:
Banking Department Manager
Banking Assistant Division Director
Chief Property Casualty Insurance Acting RC
Director of Unemployment Insurance Field Services &
Adjudications
Insurance Certification Supervising Examiner (Mgr.)
1The fringe benefit costs for most state employees are budgeted centrally in accounts
administered by the Comptroller. The estimated active employee fringe benefit cost
associated with most personnel changes is 41.77% of payroll in FY 21 and FY 22.
Primary Analyst: DC 3/11/21
Contributing Analyst(s):
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Insurance Actuary
Insurance Program Manager
Labor Department Unit Director
Transportation Assistant Planning Director
Transportation District Maintenance Special Services Section
Manager
Transportation Maintenance Manager
Transportation Transit Manager
Transportation Purchasing and Stores Assistant Director
Total estimated costs associated with this agreement are $375,379 in
FY 21 and annualized at $410,247 as reflected in the table below:
Cost Estimate1
FY 21 $
FY 21 $ Annualized
FY 21 - 3.5% General Wage Increase (GWI) 243,017 243,017
FY 21 Annual Increment 30,300 60,601
Lump Sum at Top Step 20,693 20,693
Longevity 32,200 32,200
Total Wages 326,210 356,511
Social Security, Medicare, and Unemployment 25,709 28,097
OPEB 3% 9,792 10,701
State Employee Retirement System (SERS)2 13,668 14,938
TOTAL 375,379 410,247
1 Source: March 1 roster from CORE-CT.
2 The SERS impact will not be recognized until FY 23.
Wage Increases - This agreement establishes wage increases
retroactively for FY 21, employees will receive a cost of living
adjustment (COLA) of 3.5% retroactive to June 19, 2020, as well as an
annual increment (AI) of 2 % starting January 1, 2021.
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These wages are estimated to cost $326,210 in FY 21, annualized at
$356,511. Longevity payments are retroactive in FY 21 and will cost
$30,200 in both FY 21 and FY 22. Employees at their top step in the pay
scale will receive lump sum payments totaling a cumulative $20,693 in
FY 21.
Fringe Benefits Social Security, Medicare, unemployment, and
retiree health related fringe benefit costs will be incurred based on the
wage related provisions negotiated in the contract. The current social
security rate is 7.65% of salary. The current unemployment rate is
0.23% of salary. The current state contribution towards retiree health is
3%. The estimated fringe benefit costs are $35,501 in FY 21; annualized
at $38,798.
Impact to Retirement - Employees covered by this contract are
members of the State Employees' Retirement System (SERS). The
pension impact of the wage related provisions assumes an average
normal cost SERS rate of 4.19%. The total estimated retirement cost is
$13,668 in FY 21, annualized at $14,938. The increased costs to SERS
will not be recognized in the state's actuarially determined employer
contributions (ADEC) until FY 23, as the FY 22 contribution is set
based on the June 30, 2020 actuarial valuation.
Funding Availability - The Reserve for Salary Adjustments3 (RSA)
account is for collective bargaining costs associated with unsettled
contracts. RSA currently has adequate funding to transfer to various
agencies. Lastly, the provisions of this agreement remain in effect until
a subsequent agreement is negotiated by the parties.
Member Overview There are 62 employees covered by this
agreement.
The Out Years
The agreement will expire effective June 30, 2021. The wage
provisions of this resolution will remain in effect in future years
subject to the outcome of the collective bargaining process.
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3The RSA account is used to finance collective bargaining and related costs that are not
included in individual agency budgets.