The Scituate Pension Forum
The Scituate Democratic Town Committee held a forum on Wednesday evening, where Rhode Island General Treasurer Gina Raimondo, current Pension Commission member (and Scituate Resident) Ernest Almonte and State Representative Michael Marcello answered questions about pension reform. They didn’t discuss specific proposals that might go before the legislature next month, but Treasurer Raimondo did say at one point during the event that she anticipates litigation to result, suggesting that she expects the eventual implementation of something more than a minimal plan for reamortization and new rules for new hires.
Of course, the recommendations of the State Treasurer as well as the output of the pension commission are strictly advisory; the final decision about what type or pension reform occurs (or not) rests with the legislature and the Governor. For his part, Rep. Marcello said he would like to see a real solution that doesn’t require continuing adjustment to be achieved this fall.
You can hear for yourself excerpts of what the panel members said, by clicking the audio links below.
Setting up the problem in big-picture terms…
Ernest Almonte: “In a business, if you have a pension fund that’s less than 80% funded, there are additional requirements that are put in place. You can’t give additional benefits to the employees or the retirees…let’s look at our town [Scituate]; it’s about 24% funded…”
Audio 49 sec
“The Federal Government has severe financial problems. They are going to have to fix their problems, which means there’s going to be less money for states and cities and towns to solve their problems, and they’re not in the mood to solve state problems…We’re going to have to solve the problem ourselves…” Audio 1m 6 sec
Response to a question about whether the current crisis is the result of the state not making it’s legally required contributions…
Gina Raimondo, “The state has made it’s annual contribution every year, [with the exception of] a couple of years in the early 90s during the DEPCO crisis…that is less than 1% of the problem…” Audio 33 sec
The next several items are responses to different versions of the question asked by several audience members of why teachers and state workers should have to experience any significant changes in their pensions, when they contributed according to the schedules they were given and made long-term plans based on payouts they were promised…
Gina Raimondo: “We can’t keep pretending we don’t have a problem, or keep pretending that the math is better than it is. This state started this system in the 1930s. It did not do an actuarial study until the late 80s…”
Audio 2m 4 sec
“Average wage in Rhode Island is $41,000. Unemployment is still extremely high. Taxes, in my view, are about as high as they can go….Comprehensive pension reform is in everyone’s interest. If you are a taxpayer, you need to get behind this. If you are a teacher who is working hard every day to educate our children and serving our community, you need to get behind this. Because it is in no one’s best interest to have a plan that runs out of money or to have more bankruptcies in this state…”
Audio 1m 40 sec
“…10 cents of every tax dollar goes into the pension. That is double what it was in 2003. It’s going to double again in the next six years if we don’t fix it and continue to go up from there. So the taxpayer is sharing in this burden, and will continue to share, as they should…”
Audio 3m 19 sec
Ernest Almonte: “One thing I want to add to the teachers…You taught us all so well, we figured out that the numbers don’t work…and you also taught us that we should look out into the future and not just solve things for today…”
Audio 1m 48 sec
Michael Marcello: “I know there are state workers who are hard workers and who do a good job. Unfortunately, the benefits you were promised were not funded they way they should have been…this is not the fault of state workers. They did everything they were asked to do, but the contributions that you are putting in are flat…and we are literally out of money, and I fear if we do not correct it within a year or two years, the problem will only get bigger…” Audio 1m 34 sec
Response to a question about pension-related lawsuits…
Gina Raimondo, “There is pending litigation…I expect that with almost any reform we enact, there will be some form of litigation. It’s not a reason not to go for this…It is the state’s position that there is no contract and therefore, legislation can be enacted…” Audio 1m 34 sec
Response to a question about state pensioners taking other government jobs…
Michael Marcello, “My personal preference is that if you have a state pension and you go to work for a municipality, you should be put into a different type of system…” Audio 1m 28 sec