General Assembly Trying to Further Mess Up the Pension System
House Bill #7201 submitted by State Reps Savage, San Bento, Ajello, Blazejewski and DaSilva is an attempt to force the teachers at the Rhode Island Mayoral Academies (RIMA) into the state pension system. Currently, the staff at RIMA are in a defined contribution plan, or more specifically a 401k plan. They pay into the system, they maintain their own account and they know how much money they will have. To know specifically what this bill is about, all you have to do is read the summary at the end of the bill.
This act would require that teachers, administrators and employees of mayoral academies participate in state teachers’ retirement system. This act would take effect upon passage
Hey teachers at RIMA, are you all aware of this? I hope so and I hope you all react in the same way as you would if these State Representatives were trying to take away your retirement funds, because that’s potentially what could happen.
I did wonder what the people working with they thought at RIMA, so I asked Michael Magee, the CEO of the Rhode Island Mayoral Academies:
“Mayoral Academy teachers are highly satisfied with their 100% solvent and very generous matching 5% 401K retirement plan. I can’t imagine why anyone would want to force them into the state pension system. We view the Blackstone Valley Mayoral Academies compensation system as a valuable innovation worth studying, not as something to disrupt at the expense of hardworking public school teachers.”
Mr. Magee makes an excellent point here. This General Assembly is doing exactly the opposite of what they should be doing. Instead of forcing these teachers out of a plan they’re happy with, they should be taking a look at how RIMA is doing things right and see if it is feasible for the rest of the teachers in the state.
Anyone have any guesses on why the Assembly would be looking to do this? How about this one. RIMA teachers seem to be on the younger end of their career, so they have another 20-30 years of work before they’ll ever collect a pension. That is 20-30 years of payments into the system. Also that is a whole lot of new money to dump into the system and use to pay the current retirees with. But then what happens in 20-30 years? Who knows. The only thing we do know is that Reps Savage, San Bento, Ajello, Blazejewski and DaSilva will be long gone from the General Assembly and will simply be “mistakes of our past.”
And what exactly do you call that when you have new people pay into a system and the money gets paid out to people who paid earlier? Oh yeah, that’s called a Ponz…ohhh, you almost got me there. I almost said it and we know that’s a no no, right Politifarce?