King on Pensions

Maybe I’m missing something, but it seems to me that there’s a huge conceptual flaw in general treasurer candidate Kerry King’s pension solution:

“We have a crazy system of 150 pension plans, which makes no sense at all,” he said. “We need to bring all these plans together.”
That would put all government employees into the same plan, doing away with extra perks that some municipalities may have included in their employee contracts.
“The Cadillacs are gone. We’re all driving Hondas or Chevys,” said King. “We can’t afford Cadillacs in this state. We never could.”
King said that, as treasurer, he would advocate for legislation that would require all municipalities to join a single statewide plan.

Consolidating all pensions at the state level also consolidates all of the incentive for municipal unions to install and manipulate legislators to keep the Cadillacs rolling. It will also require reform groups to work at the state level, rather than with the possibility of local neighborhood-by-neighborhood organization and advocacy. The general treasurer could certainly advocate for more intelligent control of the system, but it’s still in the hands of the corrupt General Assembly.

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13 years ago

I’m confused. Which state’s pension plans is he referring to?

13 years ago

Kernan King, the Republican candidate for state general treasurer who has, since 2005, received a property-tax break available.. ONLY.. to permanent residents of Florida,
ONLY to permanent residents of Florida,

13 years ago

You are missing out on the main point.
There are about 150 municipal pension plans in Rhode Island. The idea would be to consolidate them into the state pension system, mainly because the state is ultimately on the hook in case they fail anyway. Consolidation alone would not solve the problem. However, it would allow the problem of unfunded pension liabilities to be more effectively managed.
Consolidation is only the first step, it is not the primary means of making the system a solvent one. That would mainly come from using actuarily sound practices, and eliminating the COLA. Instead of ruminating on the details of King’s very comprehensive plan, I wish more focus would be put on Raimondo’s lack of one.
PS To Sammy the Troll, king of the cut and paste. Yes, Kerry did unintentionally receive a $312 per year tax break off of his $11,000 annual property tax bill on his summer home in Florida. After retiring from MetLife in 2002, he was briefly a primary resident of Florida between 2002 and 2005. Then, he decided to move back to RI, but didn’t know he was still getting that small discount. That problem has long since been resolved, with all interest and penalties paid.

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