RI state retirees to advisory group: Reinstate our pension COLAs
WARWICK — Scores of retired public employees descended on the Community College of Rhode Island’s Warwick campus on Thursday to argue for scuttling, or at least scaling back, the Raimondo-era changes made to their pensions in 2011.
Their goal: to convince today’s decision-makers to reinstate the annual COLAs (cost of living adjustments) to their pensions that they lost as part of an effort to save taxpayers a projected $4 billion over two decades. Those COLAs used to add up to 3% to pensions for state and local employees and teachers at a time when the workers were allowed to retire with a full pension at any age after 28 years of work.
‘I cannot afford to retire’
In the days leading up to this latest in a series of meetings by a pension advisory group, scores of past and present state and local employees – and teachers – submitted written testimony.
In their letters, they vented their anger, offered theories on why then-state Treasurer – and current U.S. Commerce Secretary – Gina Raimondo led the charge for “Draconian” pension cuts, and described the impact on their lives of having to make do without annual pension increases, which are common in the public sector but very rarely seen in private-sector pensions.
The retirees’ long game is to convince the advisory group to recommend that state lawmakers resume the suspended payment of annual COLAs. And the current employees’ goal? Convincing the decision-makers to let them retire earlier with pensions paying more than 1% of their pay for each year of work.
One of the “unintended consequences,” according to North Kingstown Fire Chief Scott Kettelle, speaking as a member of an E-911 advisory commission: E-911 calls are often placed on hold because there are not enough people to answer them, which he blamed, in part, on obstacles hiring people without an attractive retirement lure.
He said: “The money is there. We can’t get the bodies.”
Here are some excerpts from the testimony of others:
- “There has to be at least 30,000 retire[e]s that would vote for you if you propose a $1000 yearly COLA,” wrote Daniel Pisaturo.
- “I am 48 years old and have worked for the State of Rhode Island for 23 years. According to the pension calculator, if I retire at 67 years old after 42 years of dedicating myself to public service, my pension will be $42,000 per year,” wrote Christine Nardi. “I shutter [sic] to imagine how much that will support.”
- “I am almost 71 years old and I am still teaching because I cannot afford to retire,” wrote Candace Bellringer, who went into teaching 23 years ago. “If I retire this year I will receive approximately $1900.00 a month. I am all alone and my sole support. If I retire I cannot afford Medicare or be able to keep my house.”
- “I am a former RI teacher who taught 30 years,” wrote Arleen Lancaster. “As a teacher, I spent those 30 years teaching children to do the right thing and follow rules. I’m now thinking I did the wrong thing. Even the state no longer does the “right” thing. It is inconceivable to me that a state would deliberately break a contract.” “Could you live on the salary you were getting in 2012? … And how would you feel if that salary was not going to be any larger until at least 2032? That’s the position you have put us in.”
- “When I am 53 years old, I will have served as an educator for 30 years. I should be ready to retire,” wrote Tara Seger. “Instead, I am supposed to work for another 10 years in order to receive only 40% of the average of my top five years of earnings … I do not intend to work until 63 years of age. That’s the age my father was when he died. “My goal is to retire at 53,” she said. “However, in order to make this happen, my husband will have to continue to work to support me. We will not be able to enjoy retired life together – or sell our house and buy a condo in Florida. “
More:Should RI roll back Raimondo pension reforms? Union leaders make their case.
Other retirees claim Raimondo and the state exploited economic downturn
In submitted testimony, Robert Johnson spelled out his theory on how and why the politically ambitious Raimondo launched her winning campaign to shift Rhode Island’s pension system from an exclusively “defined benefit” plan to a lauded Wall Street hybrid that included the government equivalent of a 401(k).
“How was legislation passed that substantially impaired that contract? It was done by exploiting the then-economic downturn and selectively misrepresenting data,” he wrote.
The assumed rate of return was lowered, he argued, from 8.25% down to 7% to increase the sense of urgency and the size of the unfunded liability, with “so-called experts” claiming the era of stock market growth had passed.
With a lowered projected rate of return for the investment, he said, the unfunded liability in the pension system ballooned, “creating an exaggerated sense of doom.”
“As we can see by the actual returns of many stock indices since that time, these ‘experts’ were wrong,” he wrote.
Santa Privitera, who retired from the Rhode Island Department of Education in 2008 after 39 years, echoed the sentiment, writing, “The devastating ‘unintended’ consequences of Rhode Island’s unjust, politically motivated, Wall Street-influenced, over-reaching ‘pension reform’ must be addressed.”
“In my opinion, we need safer investments and more transparency about fees. The pension fund’s investment fees have increased exponentially since 2012. Money that should be used for retirees’ COLA is going to Wall Street instead.”
As it stands, he said, COLAs may not be reinstated until 2031. For those retirees who are still alive, he said inflation will have reduced their pensions.
“How will we afford groceries, medication, house maintenance, and other living expenses with such a dramatically reduced pension, when paying these expenses has already become a challenge?” he wrote.
One proposal for COLAs
Speaking on behalf of the Council 94 AFSCME retirees, former Rep. Robert Jacquard – a member of the state’s new Cannabis Control Commission – proposed that the state again give retirees a 3%-a-year pension boost, but on their first $30,000 in benefits, or $900 a year.
“It’s a modest increase that we think would cost the state below $20 million a year,” he estimated, while suggesting that the state increase its contribution to the pension system to pay for it. (For context: The last actuarial report pegged the required taxpayer contribution at $245 million for state employees, and $322.8 million for teachers under the current rules.)
Acknowledging that some retirees “think that we should be asking much more,” he said: “We would like to see our members get relief in the quickest way possible.”
As a onetime legislator, Jacquard said he “sat through all of the hearings on all of these changes” and recalled then-Treasurer Raimondo telling lawmakers there were “inequities in the pension changes … [but] we can come back later to fix them.”
“So we are here now. Now’s the time to come back and fix them,” he said.
The hearing played out on Capitol TV.
