PROVIDENCE – Amendments to pension reform legislation unveiled Wednesday to soften the bill’s impact on retirees and veteran workers would negate about $200 million in savings toward the state’s unfunded pension liability from the initial proposal, an amount General Treasurer Gina Raimondo said will still provide a path toward “healthy” pension plans.
The amendments do not, however, provide any additional legal authority for municipalities running independent pension plans to reduce the cost-of-living increases they pay retirees.
State legal cover for cities and towns with independent plans had been a priority of many mayors and Gov. Lincoln D. Chafee.
“I am deeply disappointed that the amended bill presented to the committee today fails to address the problem of our insolvent municipal pension systems,” Chafee said in a statement. “In order to correct this shortcoming, on the first day of the legislative session in January I will introduce a bill to address Rhode Island’s failing municipal pension plans.”
The changes, released in a joint session of the House and Senate Finance Committee, would provide cost-of-living increases for retirees every five years, instead of freezing them entirely for a period of up to 19 years. The COLAs under the amended bill would tie those periodic COLA increases to pension plan performance.
The amended bill would also allow some workers to retire before they are able to collect social security, the proposed new retirement age in the initial proposal. The amendments create an individualized formula for worker retirement ages between 59 and 67 years old that would reduce the new target age for those who have already worked longest.
“While there is a cost to all changes, the package, as amended, will keep the pension system on the same path toward healthy funded status as the original proposal as well as keep the pension costs in next year’s budget steady and costs predictable for taxpayers in the decades to come,” Raimondo said in a statement.
The amendments to the bill came a day after more than 4,000 union workers rallied outside the Statehouse to protest the proposed bill and a day before the House and Senate Finance Committees are scheduled to vote on the legislation.
