PROVIDENCE, R.I. (AP) — The architects of Rhode Island’s pension overhaul plan said Friday their proposal won’t reduce benefits that public workers have already earned, but stressed the need for a “one-time” comprehensive fix rather than piecemeal changes.
Gov. Lincoln Chafee and Treasurer Gina Raimondo sent a letter to state employees previewing the elements of an overhaul they are expected to present to the General Assembly for consideration during a special legislative session next month.
Even as they try to rein in the exploding cost of public pensions in Rhode Island, the two told state employees their proposal will not raise the retirement age for those already eligible to retire, nor will it propose incentives to retire. They said it will not reduce benefits already accrued by current employees and retirees.
The plan will propose limiting cost-of-living adjustments in one of several ways, including a possible COLA suspension.
Raimondo has already suggested many of the proposals outlined in the letter, but it’s still the clearest indication of the direction lawmakers may take in revamping the state’s retirement system for public workers.
Ken DeLorenzo, executive director of the Rhode Island chapter of the American Federation of State, County and Municipal Employees, said the letter offers little solace to public workers anxiously watching pension deliberations. While workers eligible for retirement won’t see their retirement ages change, the letter makes no such promises for younger workers, DeLorenzo said. Most of the state’s workers are not eligible to retire.
And while Raimondo and Chafee promise not to reduce benefits already earned by workers, DeLorenzo said the letter includes no details about what the pension system might look like going forward.
“The letter poses more questions than it answers,” DeLorenzo said. “They’re still not revealing exactly what they want to do.”
Chafee and Raimondo also said they are urging legislators to adopt a comprehensive, one-time overhaul of the system, calling it unfair to adjust workers’ pensions year after year.
“Any pension solution must be comprehensive and solve this problem once and for all,” they wrote.
Recent estimates put the state’s unfunded liability for public workers’ pensions at $7 billion, slightly less than the entire state budget for one year. If nothing is done, the annual taxpayer contribution to the retirement plans of state workers and teachers is projected to grow from $319 million per year in 2011 to $765 million in 2015.
The letter also says that taxpayers will be expected to “do their share” to help solve a crisis Chafee has called the state’s most pressing.
“State employees did not cause Rhode Island’s pension problem. And so it would not be fair to expect that state employees will bear the entire burden of fixing the problem,” the letter says.
Raimondo last week urged House and Senate lawmakers not to tinker with her plan and to give it a straight up-or-down vote when they convene next month.
Some legislators pushed back, saying they wanted to study the proposal and have an opportunity to refine it before promising to support it. Some have expressed concerns that any overhaul will get caught up in costly legal challenges, as has been the case in other states.