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R.I. passes sweeping overhaul of pension system

Posted:

(Updated, 4:50 p.m.)

PROVIDENCE – Gov. Lincoln D. Chafee signed into law the sweeping pension overhaul bill passed by lawmakers Thursday night that is expected to cut $3 billion in unfunded pension liabilities by scaling back benefits for state employees, teachers and municipal workers.

The signing took place in a Statehouse ceremony shortly before 4 p.m.

The reform bill, which passed on a vote 57 to 15 vote in the House and 35 to 2 vote in the Senate, is projected to save the state $275 million in next year’s budget and several billion dollars over the next decade.

“Today we saw what can happen when a thoughtful process and leaders come together for the people of Rhode Island,” said Treasurer Gina M. Raimondo, the chief architect of the bill. “The Rhode Island Retirement Security Act passed because Rhode Islanders called for action and change. Passage of this bill is a great step forward as we continue to work to put our state on a secure path toward growth and prosperity.”

“Today we saw what can happen when a thoughtful process and leaders come together for the people of Rhode Island,” said Treasurer Gina M. Raimondo, the chief architect of the bill. “The Rhode Island Retirement Security Act passed because Rhode Islanders called for action and change. Passage of this bill is a great step forward as we continue to work to put our state on a secure path toward growth and prosperity.”

Chafee, who also pushed for pension reform but lost a fight to include measures in the bill to help cities and towns running their own struggling retirement systems, described the vote as a good first step.

“While this is an important step toward comprehensive pension reform, it is incomplete. Our job is not done,” Chafee said in a statement. “Tonight, we have taken a significant initial step toward that goal. Now we must continue the difficult work of taking on challenges that have been decades in the making: shoring up our independent municipal plans, helping our cities and towns and the Rhode Islanders who are struggling to pay skyrocketing property taxes, and fixing our chronic structural deficits.”

On the other side of the issue, union leaders accused the politicians who backed the bill of having “stolen” from workers.

“Today our elected officials have unwisely chosen to steal the retirement security of Rhode Island’s public employees,” said J. Michael Downey, president of Rhode Island Council 94, American Federation of State, County and Municipal Employees. “While our nation celebrates Thanksgiving next week, there is little to be thankful for here, as once again public employees have been forced to bear a disproportionate personal burden for the state’s economic problems.”

After hours of debate, House lawmakers passed the bill after defeating dozens of amendments that would have delayed, stripped or watered down the legislation’s key elements, including a suspension of annual cost-of-living increases, an increase in the retirement age and move toward a partial defined-contribution plan.

“The reforms we enacted today simply cannot wait any longer. The unfunded liability of our pension system has spiraled to new depths in recent years, and without these changes, would grow even more dramatically in the very immediate future,” said House Speaker Gordon D. Fox in a statement.

“Passage of this critical piece of legislation ensures that resources will be available to invest in education, infrastructure and our human services safety net, while protecting the pensions of the future,” said Senate President M. Teresa Paiva Weed.

Update with schedule for governor's signature.

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mairhart

The placement of the word "stolen" within quotation marks is curious.

The state violated its contracts with workers and took back previously agreed compensation. Is that not a form of theft?

The pension system was in obvious need of reform due to both overspending and underfunding, but state officials were to blame for most of this, and the officials have neither accepted responsibility nor made sacrifices.

By supporting this approach, taxpayers have sent the message that they are willing to re-elect officials who make false promises and violate agreements.

Going forward, state contracts will be substantially less trustworthy.

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