Some public-sector union practices in Connecticut are reaching new extremes, with state employees now retiring on pensions that exceed their final salaries.
This is largely due to the widespread ability of state workers to “spike” their pensions by clocking excessive overtime in the years just before retirement. Since pension calculations include overtime pay, many employees strategically increase their hours to boost retirement benefits.
The issue doesn’t stop there. Under Governor Ned Lamont, unionized state workers have received six straight annual pay raises, totaling a 33% increase—well above the 23% national rise in private-sector wages over the same period. Lamont even promised union members, “Every year I’m here, you’re going to get a raise.”
With Connecticut’s public sector ranking as the second most heavily unionized in the country, these outsized benefits are no accident. Still, pensions that exceed salaries are rare—even among union-heavy states. In neighboring New York, former governors David Paterson and Andrew Cuomo introduced moderate limits on pension spiking back in 2010.
California’s Governor Jerry Brown banned the practice in 2012, though a new push is underway there to create a union-run supplemental pension system.
Lamont’s predecessor, Dannel Malloy, ended overtime spiking for employees hired after 2017—but 28,000 pre-2017 hires remain eligible.
A study by The Townsend Group, commissioned by Nutmeg Research Initiative and the Yankee Institute, focused on the Department of Correction and found that in each of the last five years, the top 10 overtime earners included workers who later retired with pensions averaging 138% of their base salary.
Most retired immediately after reaching 20 years of service—the minimum for retirement eligibility—essentially receiving a 38% raise for leaving the job. One retiree started with a pension of $153,000, triple the maximum Social Security benefit. She reportedly earned 80% more from overtime than regular pay in her final year.
So how does this happen? In 2020, Lamont hired Boston Consulting Group (BCG) to examine staffing and management in state agencies. BCG found rampant absenteeism, often not coincidental, contributing to massive overtime. The report suggested some workers were gaming the system. BCG recommended distributing overtime more evenly between younger and older workers.
Despite this, overtime spending continues to soar—rising from $312 million four years ago to $378 million last year. The Lamont administration has yet to implement meaningful reforms, and the last contract negotiations in 2022 failed to address the issue. With the current wage contract expiring this month, new talks are underway.
Republican Senator Rob Sampson introduced a bill to remove overtime from pension calculations, but it failed to reach a vote. He plans to reintroduce it, though chances are slim given Democratic supermajorities in both legislative chambers and Lamont’s stance.
Still, Republicans are pushing for a two-year wage freeze to slow salary growth and rein in pension costs. This would indirectly help reduce overtime spiking by lowering the base used to calculate pensions. A wage freeze isn’t unprecedented—former Governor Malloy implemented three during his tenure.
Current conditions may make a freeze more likely. Lawmakers recently cut pay raises from the 2026 budget due to tight spending limits. Lamont also imposed a hiring freeze to manage this year’s budget and declared a fiscal emergency to bypass the constitutional spending cap.
The core issue remains: Connecticut is offering top-tier public-sector pay while grappling with one of the worst fiscal situations in the nation. It’s unsustainable, and Connecticut isn’t alone—other blue states face the same crisis of unaffordable union pay.
Republicans argue it’s time for Lamont to show real leadership, just as Malloy once did, by tackling pension spiking and reforming how the workforce is managed.
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