Curious Developments in Pension Politics
For whatever it’s worth, the “study commission” looking at pensions for the Rhode Island House approved a plan to increase the minimum retirement age to 65, and although it didn’t vote to eliminate cost of living adjustments (COLAs), it did suggest tying them to inflation data.
The curious result came during the vote to apply changes to current employees who are vested, but not yet eligible to retire (emphasis added):
The union leaders, predictably, were in the minority on each vote taken last night, arguing throughout that no one who has put in the minimum 10 years of service that entitles them to a pension — also known as vesting — should be touched by any mid-career changes in the retirement package they have for years been led to expect. On many of the votes, they were joined by Rep. John Loughlin, a Tiverton Republican who has signaled some interest in running for Rhode Island Democrat Patrick Kennedy’s 1st District Congressional seat.
What to make of a panel on which Rep. Timothy Williamson (D-West Warwick) and Rep. Timothy Williamson (D-West Warwick) vote for a stronger line than Mr. Loughlin?
“One of the first votes of the night was described by one member of the panel after another as the hardest, because it entailed a decision on whether or not to apply the pension changes to current workers, many of whom have worked for the state for a decade or more but are not yet eligible to retire. Several, including Loughlin, talked about “fundamental fairness.””
Yes. What is fundamentally fair about the state having offered some of the most generous retirement benefits – benefits that far exceed those in the private sector?
While they should have gone farther on the COLA, this panel is to be applauded for their 12-4 vote to return some fundamental fairness to the pension system.
It’s all smoke and mirrors. The House will pass it with a bunch of publicity and it will quietly die in Paiva-Weed’s chamber (“too divisive”).
The whole thing is as spontaneus as a WWWF wrestling match. You will notice the tell-complete silence on Crowley’s blog.
Mark my words. March 13. I’m saving this post for an “I Told ya so” in late June.
Justin: The Projo got it wrong. The commission didn’t approve any of those recommendations.
Sophistry Pat. They didn’t technically “approve” them-that will be done at a later.
You DO have the word that they ultimately will be shot down-which is why you, Reback and the rest of the unionists are not saying a single word against this choreographed charade.
Do I have it right?
If Loughlin had any ambitions to run for statewide office, he lost some votes and $$$ from fiscal conservatives. Who wants a republican who votes more pro union that the House Demo leadership?
Stay in Tiverton,
Is that how you define a Republican, i.e. someone who is anti-union? That would make Hitler and Stalin Republicans. It also shows a very small tent, hardly big enough to hold the four Republicans in the Senate.
OldTimeLefty
Did anyone catch the question raised during the hearings regarding the 8.25% earnings assumption?
Specifically, the question was raised as to whether or not the 8.25% earnings assumption made sense and whether or not we had met that mark in the recent past.
The answer was “NO, we have NOT earned that rate in at least the past 10 – 12 years”.
I think I heard Bob Walsh groan, as that put to rest his ludicrous “Walshian Assumptions” crap that certain people swallow hook, line and sinker without challenge.
Indeed, I think it’s time for Andrew to dust off his famous Pension Simulation model and show us what the numbers look like today. Show us what an employee Contributes vs what the employee Receives as a gauranteed benefit regardless of what the market earns or loses.
Does anyone ever wonder why the Federal Gov’t, with all the resources at it’s disposal, requires a Retirement age of 65 or higher (yes there are exceptions, but in general it is 65) before one begins collecting Social Security, but a little state like Rhode Island thinks it can somehow afford to allow public employees to retire in their 40s and 50s?
What is there to “study”? The answers are no brainers. Increase the minimum retirement age to 62 or 65, eliminate the automatice COLA and move to a combination of Defined Benefit and Defined Contribution.
But alas, we will do what we do best, which is to “put everything on the table, study it, talk about it and set up a commission to review it” all in an effort to kick the can down the road.
From today’s front page projo I note the following. Even with the admittedly very substantial pension reforms approved by the Commision pension costs will STILL escalate by $400 million by FY 17. Just not the $500 million if nothing was done! Wow. Pity the poor progressives. They have killed the golden goose, now they are crying because no more eggs are coming. projoCars Home | Buy | Sell | Research | News | Place an ad Find Jobs | News | Advice/Tools | How to Search In-paper ads Cardi’s Benny’s Circulars Comments 29| Recommend 7 Unions decry proposal to prune pensions 01:00 AM EDT on Monday, March 16, 2009 By Katherine Gregg Journal State House Bureau PROVIDENCE — Union leaders are denouncing as illegal and “almost criminal” the pension-benefit overhaul that a House-appointed panel recommended last week for 23,700 state employees and public school teachers to save tens of millions of taxpayer dollars before the state’s crumbling pension system hits a breaking point. Recommending a move to age 65 as the new retirement age, the panel also voted to limit but not fully eliminate annual cost-of-living increases for future retirees, withhold them until the pensioner is at least 66 years old, and base future pensions on an employee’s five-year salary average, instead of the three-year average currently used. It also recommended the adoption of a “hybrid” pension plan for new employees. It would combine a much-reduced version of the current defined-benefit plan that pays Rhode Island’s public employees up to 80 percent of their earnings, with a 401(k)-style plan in which contributions are fixed, but the size of the benefit depends on how much that money gains or loses in the investment market. In a series of interviews after Thursday’s votes, the state’s union leaders voiced frustration and anger that… Read more »