The Governors Pension Proposal
Governor Carcieri’s proposal has two major ongoing items relating to non-disability pensions…
- Elimination of cost-of-living adjustments for state and municipal employees who retire after April 1, 2009.
- Establishment of a minimum retirement age of 59 for state and municipal employees, including teachers, to be eligible for retirement.
And if I understand this properly, the plan calls for local communities to make only 25% of their scheduled pension contributions. Correspondingly, state education aid to each city and town will be reduced by the amount deferred.
1. Elimination of cost-of-living adjustments for state and municipal employees who retire after April 1, 2009.
2. Establishment of a minimum retirement age of 59 for state and municipal employees, including teachers, to be eligible for retirement.
Great first steps but will both these apply to the “royalty” of police/fire?
The Police and Fire will complain that their union members cannot work to those ages and would endanger others if the were forced to – # 1 & # 13 in the nation for spending – they will not part with that easily – look at the overtime budgets due to the minimum staffing and then also the State laws for disability where if someone has a heart attack and they are Fire Department employees, then it has to be work related and the taxpayer is on the hook for 67% tax free disability pension and other perks / payments such as fully funded or mostly funded college education for family memebers, not just the ailing Fireperson . . . The last time I was breifed on this issue, about 18 months ago, The above was written into RI General Law . . . A huge racket and nut to crack in RI
The last time I was breifed on this issue, about 18 months ago, The above was written into RI General Law . . . A huge racket and nut to crack in RI
Posted by CMTR at January 7, 2009 9:22 PM
Not really. It can be repealed in a single day. Just like the Caroulo Act.
If any of this takes effect on April 1, 2009 you will see another mass exodus beforehand of state and teachers and municipal workers this time. I believe the current pension rules already have either/or a 59 year old rule. This also sets up a legal challenge for pension (work max 35 years to receive 75%; any years worked over 35 is lost money) Consider a person who starts working at age 21 or 22 and wants to retire after 35 years of service, Is the state pension system going to make that person wait till they reach age 59 to start collecting their pension? There will be another massive drain on the pension system. Plus another drain on the industrial knowledge base in the state. Don’t forget, a whole department within the state department of administration flat out retired on this last round. With the proposal to reduce the state contribution to the pension system (Bruce Sunderland reduced it from 70% to 50%) causing the present $5 billion underfunding will cause greater stress on the system which will set up legal action like what occurred in Hawaii where the court ordered the state to return funding the pension fund. It’s already been studied and documented by Smith Hill last year that switching to a 401(k) or 403(b) retirement plan while under law the state must keep the old pension system solvent will cost the state an additional $500 million a year for the next 7 years, Government municipal and teacher services will slow down or might become non-existent because of lack of personnel and some programs are linked to matching federal funds and unfunded No Child Left Behind Law. The last six years of ideas to balance the budget have not worked and driven the state deeper into deficits.… Read more »
The changes in retirement age and in the COLAs will have a major impact on how much money is required to keep the system solvent — that’s why they’re being done — meaning that all of the numbers about the cost of a changeover have to now be recalculated.
Wow! Providence will contribute 25% of their scheduled pension contibutions..,but wait..,thats right.., they don’t contribute..,blame city hall for a large part of this pension mess.