A report prepared by an advisory group to Rhode Island General Treasurer James Diossa lays out a series of possible options for tweaking the 2011 overhaul of the state pension system.
But none of the options are inexpensive. Lawmakers will need to reconcile the possible effects on the state budget with the anger of a vocal group of retirees troubled by the overhaul.
Resuming a 3% compounded cost-of-living adjustment for eligible retirees, for example, would cost the state $48 million in the next fiscal year, and $27 million for cities and towns. It would also spike the unfunded liability in the pension system by about $800 million.
Diossa assembled a pension advisory group after being directed to do so by the General Assembly with a law last year.
One of Diossa’s predecessors, Gina Raimondo, now U.S. Commerce secretary, spearheaded the 2011 pension overhaul. At the time, the state pension fund had less than half the money needed to meet its long-term obligations.
But some retirees have talked about being economically hurt by pension changes amid the high inflation of recent years, leading a few lawmakers to express regret about their support for the 2011 law.
The findings are now expected to be reviewed by the House Finance Committee, although House Speaker Joe Shekarchi remained opaque in a statement on the report: “I thank the members of the working group for their volunteer service and I appreciate their efforts. While I did get a brief preview from General Treasurer Diossa late Friday afternoon, I plan to review the report in greater detail and make sure it is easily accessible to all through the General Assembly website. This is a high interest topic, and as expected this work will serve legislators and others as an important resource.”
In a separate statement, Senate President Dominick Ruggerio said, “I am grateful to Treasurer James Diossa and the members of the working group for their comprehensive review of numerous potential modifications to the pension system. This work was necessary prior to any responsible consideration of pension system modifications. The 2011 pension reforms were intended to ensure that public employees and retirees can count on a secure and sustainable retirement system, goals that must remain paramount as we review any potential modifications. In the coming weeks, Chairman Louis DiPalma and the Senate Finance Committee will undertake a thorough review of all aspects of the working group’s report through their public committee hearing process.”
