Rhode Island taxpayers and state workers are likely to face much higher pension payments under new policies being seriously considered by Gov. Lincoln Chafee and General Treasurer Gina Raimondo that have received scant attention up to now.
The Chafee administration quietly disclosed last week that it’s weighing a major change in how taxpayers and workers divide up the escalating cost of annual contributions to Rhode Island’s state pension fund. The idea was buried deep inside official budget documents reviewed by WPRI.com.
The result could be even more money withheld from state workers’ wages than under Chafee’s initial proposal to raise their contributions from 8.75% to 11.75% of each paycheck.
At the same time, Raimondo has ordered a full review of Rhode Island’s long-term pension obligations and warned that actuaries may double their estimate of the state’s unfunded liability from the current $4.9 billion figure to as much as $10 billion. Since that number determines the size of the annual payment required to keep the pension fund solvent, hiking it could force a large increase in the yearly contribution paid for jointly by taxpayers and workers.
Chafee and Raimondo, whose offices are working together to tackle the pension problem, discussed their plans during recent appearances on WPRI 12′s “Newsmakers.” But the full implications of their efforts – and the impact they would have in combination – haven’t been spelled out in full until now.
“I really think we want to look at this comprehensively with General Treasurer Gina Raimondo in the months ahead,” Chafee said on “Newsmakers” last Friday.
The administration’s first budget proposal “didn’t take a comprehensive look at the pension fund,” Chafee said. ”That will come, though – it’s on the front burner.”
Cost to taxpayers ‘just soaring’
Rhode Island had $6.8 billion in assets on hand to cover $11.5 billion in future pension payments to the system’s 65,573 active and retired members as of June 30, 2009, Treasury documents show.