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How Others See us: NY Times on RI Pensions

October 24, 2011

One Comment leave one →
  1. Mister Guy permalink
    October 25, 2011 7:52 am

    Yet more silly-talk from Raimondo:
    “‘I would ask you, is it morally right to do nothing, and not provide services to the state’s most vulnerable citizens?’ she asked the crowd.“

    Hmmmmm, what are pensioners going to do when their buying power is reduced by at least 40-60% over the next two decades by not having a COLA?? It sounds like they are going to be a LOT more “vulnerable” than they are right now Mrs. Raimondo…sheesh…

    According to the state’s own numbers, reducing “inflation protection” as stated in the recently proposed bill by Raimondo will deal with only around $1 Billion of the *projected* (not certain by any means), long-term pension system shortfall of between $6.8-9 Billion (or roughly only 11-15% of the total problem). According to state audits of the retirement system, in 11 of the last 16 years (or 69% of the time), the pension fund has earned an investment return well above the proposed 5.5% threshold above which retirees would get a COLA after the retirement system becomes 80% “solvent”. However, the recent, stated 5 & 10-year average investment return averages are only 2.3-2.5%, which sounds like completely & totally bogus math to me. The proposed COLA changes (not giving out pension COLAs unless the retirement fund earned a 5-year average return of greater than 5.5%) seem to really be designed to NEVER give any retirees a COLA in the future…not just “suspend” them for a period of up to two decades as stated in the Raimondo plan.

    I’m beginning to think that Mrs. Raimondo is in way over her head politically & actuarially. Maybe having no previous public service experience isn’t a very good idea when you are running for state-wide office, eh?

    The RI state pension system has enough funds in it to pay for full retiree benefits until 2019-2023. There is plenty of time to make changes to that system thoughtfully & legally. In other words, what’s all the big rush about??

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