RISC offers a plan for Rhode Island’s pension crisis
While Governor Lincoln Chafee and Treasurer Gina Raimondo are expected to offer a pension proposal before a special October legislative session, the Rhode Island Statewide Coalition (RISC) has its own five-point plan. Via e-mail, RISC says its plan was conceived by fomer Don Carcieri aide Kerry King, who was Raimondo’s GOP rival last year:
RISC Pension Reform Proposal: 5 Pillars
The FIVE main pillars of the RISC Proposal include:
1. Termination and Merger
Termination of the 130-plus Local Plans and Merger into One Statewide Plan
2. Recalculation, COLA Elimination
A recalculation of the pension benefit itself with numerous changes affecting the earned credit formula, COLAs, and disability pensions
3. Mandatory Participation in Social Security
Going forward, all Rhode Island government workers would be required to participate in social security and receive a benefit adjustment to reflect the social security payment.
4. Conversion to 401-k Defined Contribution Plan and Worker Choice
The state would work toward the ultimate conversion of the pension system from a defined benefit to a defined contribution plan system.
All public sector workers would have the choice to opt out and have their cumulative contributions returned to them.
5. Shock Absorbers
Shock absorbers should be built into a new plan going forward so that unintended and disproportionately harmful loss of benefits do not occur for the oldest retirees once new calculations kick in.