“WE ARE IN THIS TOGETHER. Rhode Island has great challenges and opportunities ahead. We all have a stake in helping our beautiful state reach its full potential,” said Gov. Lincoln D. Chafee and General Treasurer Gina M. Raimondo in a letter to state employees on Friday previewing their pension reform proposals. For a larger version of this image, CLICK HERE.
PROVIDENCE – Gov. Lincoln D. Chafee and General Treasurer Gina M. Raimondo wrote a letter to “fellow” state employees on Friday, previewing the “key components” of their pension reform proposal slated for discussion during a special legislative session next month.
“We are strong advocates of pension reform because the current pension system is unaffordable and does not provide retirement security for state employees and retirees or affordability for taxpayers,” the letter said. They will not propose a change in the retirement age for those already eligible to retire and will not propose incentives to retire.
Chafee and Raimondo go on to thank state employees for their service and then identify their four goals for the proposed reform:
Comprehensive, one-time reform so the pension system will not have to be adjusted again.
Retaining talented state employees; no incentives to accelerate retirement plans. “Rhode Islanders have an interest in retaining an experienced and talented state employee work force while supporting a retirement program that attracts capable employees.” The proposed reform will not reduce benefits accrued by both active employees and retirees, and there will be no incentive to accelerate retirement.
Cost of Living Adjustments are one of the biggest drivers of the pension liability and must be limited. The following are the limitations being explored: a temporary COLA suspension; tying COLAs to investment returns and pension plan fiscal stability; and/or limiting COLAs to a lower fixed dollar amount.
Continued taxpayer support for state pension system. State employees will not be expected to bear the entire burden of fixing the problem and taxpayers will be expected to continue to “do their share to ensure the solvency of the pension system.”
“We are in this together. Rhode Island has great challenges and opportunities ahead. We all have a stake in helping our beautiful state reach its full potential. We need to improve our schools, repair our roads and bridges, and invest in economic development and job creation,” Chafee and Raimondo said.
“Fixing our pension system is an essential step to helping Rhode Island realize its full potential.”