Connecticut's MERS 2.0 plan outlines retirement eligibility and conditions

Connecticut's House Bill 7276, introduced on April 10, 2025, aims to reform the Municipal Employees Retirement System (MERS) by establishing a new tier, MERS 2.0, designed to enhance retirement benefits for municipal employees. This legislation seeks to address the growing concerns over retirement security for public workers, particularly in light of changing demographics and financial pressures on municipal budgets.

Key provisions of the bill include eligibility criteria for retirement benefits that allow members to retire without actuarial reductions after a specified period of service. For general members, the bill stipulates that individuals can retire after 30 years of aggregate service or after five years of continuous service upon reaching age 65. Public safety employees benefit from a slightly reduced requirement, allowing retirement after 25 years of service or five years of continuous service upon reaching age 55.

The bill has sparked notable debates among lawmakers and stakeholders. Proponents argue that MERS 2.0 is essential for attracting and retaining talent in municipal jobs, which are often seen as less lucrative compared to private sector positions. Critics, however, express concerns about the financial implications for municipalities, fearing that enhanced benefits could strain already tight budgets and lead to increased taxes or reduced services.

The economic implications of House Bill 7276 are significant. By potentially increasing the retirement benefits for municipal employees, the bill could improve job satisfaction and retention rates, ultimately benefiting local governments. However, the long-term sustainability of these benefits remains a contentious issue, with experts warning that municipalities must carefully balance employee benefits with fiscal responsibility.

As the bill progresses through the legislative process, its future remains uncertain. If passed, MERS 2.0 could reshape the landscape of municipal employment in Connecticut, setting a precedent for how public sector retirement systems are structured in the state. The ongoing discussions will likely focus on finding a compromise that addresses the needs of employees while ensuring the financial health of municipalities.