Comments on: Raimondo-Chafee set to freeze COLAs, put all in hybrid plan

By: Pro-Raimondo group to spend six figures | RHODE ISLAND

Pro-Raimondo group to spend six figures | RHODE ISLAND — Fri, 30 Sep 2011 13:37:28 +0000

[...] close the pension deficit and stabilize our retirement system WITHOUT raising taxes.” Raimondo offered a broad outline of what her proposal will include during an appearance on WPRI 12′s “Newsmakers” earlier this [...]

By: Pro-Raimondo group to push pension bill with ads, lobbyists | WPRI.com Blogs

Thu, 29 Sep 2011 19:44:32 +0000

[...] the pension deficit and stabilize our retirement system WITHOUT raising taxes.” Raimondo offered a broad outline of what her proposal will include during an appearance on WPRI 12′s “Newsmakers” [...]

By: Dean Baker: Raimondo-Chafee pension ideas look ‘fairly harsh’ | WPRI.com Blogs

Wed, 21 Sep 2011 10:03:59 +0000

[...] the weekend, Baker emailed me his thoughts on the pension changes Treasurer Raimondo outlined last week on WPRI 12′s “Newsmakers”: This seems to me to be fairly harsh, especially to [...]

By: Lindaq401

Lindaq401 — Mon, 19 Sep 2011 15:59:57 +0000

so let me get this straight, we are now going to trust the state to invest our money into a 401K; after they’ve ruined the current pension system with their poor investment strategies; the state has operated under the guise of a bank or financial institution when it hired me as an employee and stated as stipulation of employment that in return for services rendered I would receive as part of my salary and mandatory contributions, a pension upon retirement. My job application is a negotiable instrument just like a bank note; was signed and notarized. This is 10th grade business economics.
I understand that the State is in financial difficulty, however, what they are asking current employees and current retirees to do is the equivalent of your bank asking you to double your interest rate on your mortgage because they’ve lost money in the stock market. I’ve never liked that I had no choice but to contribute, and I think that if I have to contribute to a 401K going forward, then we should at least be given the option to OPT OUT.

By: Ted Nesi

Ted Nesi — Mon, 19 Sep 2011 00:49:08 +0000

Tom, that’s a good question. It’s not clear to me what would happen to those workers who are already in state service but haven’t reached 10 years and become vested in the pension system. However, it’s possible they’d be treated in the same way as vested employees – that is, they’d get the full old defined-benefit pension amount equal to their service to that point (say, 3 years of accrued benefits) and then earn benefits going forward in the new hybrid system.

But again, these details are still being worked out and that’s only informed speculation on my part.

By: Tom

Tom — Sat, 17 Sep 2011 15:33:42 +0000

What happens to workers who are not vested? Will they only get a 401k and what happens to there prior pension contributions.

By: Ted Nesi

Ted Nesi — Fri, 16 Sep 2011 21:51:57 +0000

Anthony, that’s a good question and one Chafee and Raimondo (and then the General Assembly) would need to tackle address in their bill. It would be up to lawmakers to decide when these changes would take effect – it could happen as soon as the bill passes or months later.

The details are still sketchy, but it’s likely the treasurer would argue for implementing the changes right away, which could mean no COLA in January – but again that’s only if they actually do a full suspension of the COLA.

We won’t really know what they’re thinking until the legislation is released publicly during the first two weeks of October. In the meantime, it’s something to contact their offices about if you have an opinion:

http://mis.cba.uri.edu/CBASurvey//TakeSurvey.aspx?SurveyID=92KH6o2

By: anthony palana

anthony palana — Fri, 16 Sep 2011 20:26:25 +0000

Ted with the proposed suspension of COLAS –would retirees get their expected January cola and then suspend the rate . This seems to be fairest since we went the whole year and should be entitled to the last Cola before suspension.

By: Barro calls Raimondo-Chafee pension ideas ‘very promising’ | WPRI.com Blogs

Fri, 16 Sep 2011 18:36:59 +0000

[...] leaders should approach pension reform. On Friday, Barro emailed his thoughts on the plan outlined by Treasurer Raimondo: Overall, the plan laid out by Treasurer Raimondo and Governor Chafee strikes me as a very good [...]

By: Cosmo

Cosmo — Fri, 16 Sep 2011 18:07:19 +0000

Bleat bleat bleat the usual crap from the union sheeple. Use your brain union boy, we can do the reform now or after all the money is gone. Do you want to wait until anyone with money or brains to make it leaves the state because you keep driving taxes up? That’s what happening now, so sooner or later you can count on fast food workers and illegal aliens to pay your pension. Good luck with that.

By: Ted Nesi

Ted Nesi — Fri, 16 Sep 2011 18:01:56 +0000

That’s definitely a fair point. The six funding-fix options presented by the state’s actuary Monday to the advisory group suggested COLA freezes of 5 years (in two of his options), 13 years (in one of his options), or no freeze at all (in three of his options). A lot depends on how much savings they seek to get from the COLA freeze versus reamortization, the switch to the hybrid plan, and the many smaller changes that are possible.

Keep asking questions in comments and I will do my best to answer them. I realize this is all very nerve-wracking for people, so getting accurate information is important.

By: sleepless in ri

sleepless in ri — Fri, 16 Sep 2011 17:58:25 +0000

Thank you , Ted. That is helpful information since there are contrary rumors spreading and it has not been definitively explained.

For many retirees freezing the Cola for a number of years will mean they will never see a Cola again before they pass on.

By: Ken Houghton

Ken Houghton — Fri, 16 Sep 2011 17:46:45 +0000

“Look what happened in Central Falls,” the treasurer continued. “We forced the city to pay excess interest rates because of default risk and then changed the law so that bondholders would be paid in full–voila, no default risk and money for nothing. Well, it has to come from somewhere, so we stole it and now we’re going to 70-year-old retirees and saying, ‘You’re not getting half of your pension check.’”

There. Fixed.

By: Ted Nesi

Ted Nesi — Fri, 16 Sep 2011 17:42:45 +0000

As I understand it, your pension would freeze at its current rate, including whatever COLAs have been added to it over the years. So if you retired with a base pension of $1,000, and COLAs have raised it to $1,500 over the years, it would be frozen at $1,500 for some period of time. But it wouldn’t go back down below $1,500 to take back already granted COLAs.

Full/partial is a little unclear, but theoretically they don’t have to just stop granting the full COLA altogether – they could grant a smaller COLA for a period of time, grant a COLA to lower-income retirees, etc. But she did not offer details on that point.

For what it’s worth, I’ve never heard it suggested that COLAs should be eliminated forever – only for a period of time until the pension plan gets to a certain level of funding (80% is the figure Raimondo’s office has thrown around; right now the fund is at 48%).

Does that make sense?

By: sleepless in ri

sleepless in ri — Fri, 16 Sep 2011 17:39:17 +0000

The State asks the Court to dismiss the pension suit and when the State loses, it decides it will summarily dismiss the Court’s decision.

Sounds like full employment for lawyers.

Wonder who these lawyers will be to benefit in big numbers on behalf of the State?? Actually the taxpayers will be paying these lawyers as the State flounts the Court decision.

By: sleepless in ri

sleepless in ri — Fri, 16 Sep 2011 17:36:30 +0000

What does full/partial freeze/eliminate the COLA mean? Part of my monthly pension includes an accumulation of Cola benefits which I have heard the Treasurer wants to suspend/freeze that accumulation for the future. A pensioner could therefore lose 10%, 15% or more of their monthly benefit under that scenario.

What exactly is she saying?

By: Paul

Paul — Fri, 16 Sep 2011 17:22:55 +0000

A “freeze” in the cola is a change in the contract. An ILLEGAL change … sorry Ms.Raimondo.