Pensions: There’s always a deal
There’s is that old political axiom: There’s always a deal.
And an 11th hour agreement between General Treasurer Gina Raimondo and Governor Lincoln Chafee appears to have headed off a dispute on state pension overhaul legislation just hours before it is scheduled to be presented to the General Assembly.
Raimondo initially favored just dealing with the red ink in the state employee pension plan. But Chafee insisted on including pension systems run by cities and towns, some of which are in far worse shape than the state-run system. Providence Mayor Angel Taveras and Cranston Mayor Alan Fung sided with the governor. And Chafee spokeswoman Christine Hunsinger says that Raimondo has decided to go along.
The decision makes sense because so far it has been the local pension systems that have teetered on the brink of insolvency, or, as is the case in Central Falls, are in receivership.
Meanwhile Massachusetts, which did not have as deep an unfunded pension liability problem as Rhode Island, recently approved legislation to reduce that state’s $17 billion unfunded liability by remaortizing the debt. Massachusetts lawmakers also raised the minimum retirement age for most atete and municipal employees from 55 to 60 and bumped up the minimum age for collecting a maximum state pension benefit from 65 to 67.
The Massachusetts changes begin with workers hired after Jan. 1, 2012.