Raimondo aide lays out ‘starting point’ for RI pension overhaul
October 7th, 2011 at 7:53 pm by Ted Nesi under Nesi's Notes
By Ted Nesi
PROVIDENCE, R.I. (WPRI) – The “starting point” for the forthcoming Raimondo-Chafee pension bill is a proposal floated last month that would freeze COLAs for more than a decade and create a new hybrid plan for all workers in the state-run system, according to a top Treasury official.
The proposal – prepared by a state actuary based on input from the two leaders’ pension advisory group – was detailed Friday by Deputy Treasurer Mark Dingley at a meeting of the state Retirement Board. It would immediately raise the pension system’s funding level from 48% to 62%, he said.
It’s possible Treasurer Gina Raimondo and Gov. Lincoln Chafee will unveil their legislation on the same day that the full House and Senate reconvene for the bill to be introduced and referred to their respective finance committees, sources said.
One target date had been next Thursday, but that appeared less likely by late Friday as talks continued between Raimondo’s office, Chafee’s and legislative leaders.
The dramatic changes the actuary’s proposal suggested for the state-run system include a temporary suspension in cost-of-living adjustments (COLAs) and a permanent reduction in their generosity, as well as the transition of all workers into a hybrid plan.
(photo: Ted Nesi/WPRI)
Tags: gina raimondo, lincoln chafee, mark dingley, pensions, state government
Nesi's Notes covers politics and the economy in and around Rhode Island for WPRI.com. (Twitter: 
Oh gosh what BS.
Wanna see me change the unfunded liability? OK, change expectations to 7.75%…presto big change in UL. Point being….it’s all just numbers.
Meanwhile little people who worked 35 years for an average 26K pension are screwed.
I thought the Raimondo plan was to have teachers and state employees work until retirement paying 3 times as much as the state. Then, when they are eligible for a pension at 90, they slit your throat.
The unfunded liability doesn’t matter.
1. RI’s COLA statute states “for life” per RI General Law 36-10-35.
§ 36-9-2 Membership of persons employed after establishment of system. –
All employees as defined in chapter 8 of this title who became employees
on or after July 1, 1936, shall, under contract of their employment become
members of the retirement system
2. State retirees are collecting COLAs and therefore they are “vested”. This
kicks in constitutional contract protections. No ex post factor laws, no
government action to change executed contracts.
3. The COLA statutes awards 3% compounded per year and is not based on any
underlying formula that would permit change as in some other states.
4. The legislature has never changed current state retirees’ COLAS. Therefore
there is no legislative history of COLA changes for state retirees as in a
minority of states.
5. The legal doctrine of promissory estopple. Retirees relied in good faith
on the annual COLAs when making important retirement financial decisions.
In litigation the state will be stopped from saying for life did not mean
life.
6. Many of your retired state worker constituents believe that the state
cannot switch from a legal statutory interpretation case to an
“equity/moral” argument since the state intentionally did not meet the
intent of the law by not providing the proper state funds to match
employee contributions. Only those with clean hands can seek an equity
relief in court.
It would be interesting to listen to the legislative testimony how money
was given to “other” interests beyond the essential functions of
government, health, education, public safety, welfare, and transportation
during the past decades and not to the pension fund. Only 19% of the
state’s 7 billion dollar annual budget is spent on personnel. How much of
the remaining 81% is actually spent on essential state functions?
7. The “important public interest” argument to reduce pension benefits
presented by the state could be used to break any public sector contract
never mind being in conflict with constitutionally protected contract
rights that no public laws can be passed that would adversely affect past
executed contracts.
8. The drama and road show should be put aside. This is a legal matter with
grave consequences for the broader issue of the integrity of contracts
made by government entities that can be framed as an issue by the RI Gen.
Assembly to be presented to the RI Supreme Court for quick disposition.
I am looking for one sincere and gutsy reporter to confront the Gov. and Gen. Treas. with the law and how their proposals will be reconciled with current law without costing taxpayers years of costly protracted litigation? Looks to me that the Gov., the General Treasurer, et al, are fooling the public for their own political gain.
Don’t be so sure of the RI Courts, Raimondo has met with the Judges and in exchange for them to rule in
the favor of the state and not the State Employees and Teachers, the Judges, State Police, and Fire/Police pensions will not be affected. It,s a done deal, read the Providence Journal Sat. 8 OCT. 2011 read between the lines
At least RI knows what MUST be done ….. immediately stop digging the hole deeper by a very significant reduction in future-service pension accruals for CURRENT employees. Hopefully the hybrid Plan will do that (with at least a 50% reduction in the total accrual rate).
CA, NJ, IL, MI, Ma, CT, and a few others must get to that point …. or they will eventually become insolvent.
Instead of trying to destroy taxpayers lives by taking away their pensions why don’t you audit the general fund and find out whats in there. Massive taxes are paid daily by rhode islanders and the state claims it has no money. Also why isn’t anything done about the members of the general assembly who get paid healthcare for life for a part time job.