Just 1% of Retirees Sinks the Pension Deal
Monday, April 07, 2014
The arcane voting structure set up by the court gave each individual union the ability to sink the entire deal. The police union membership - the smallest group - with just 254 "No" votes stopped the agreement for more than 23,000 eligible.
“For over a year the Governor and Treasurer participated in good faith in court-ordered mediation leading up to the February 14 settlement agreement. This morning, in court, we learned the results of the first round of voting from the plaintiffs. The court has ordered all parties back into mediation. The state will continue to participate in this court-ordered mediation,” said Joy Fox of Gina Raimondo's office and Debbie Rich of Governor Chafee's office.
The pension reform battle has now raged for two years.
Reported results by group are:
Teachers: 7,442 eligible, 2,320 ballots received: 31% vote to reject
Retirees: 6,840 eligible, 1,810 ballots received: 26% vote to reject
State: 5,045 eligible,1,697 ballots received: 34% vote to reject
Municipal: 3,261 eligible, 504 ballots received: 15% vote to reject
Fire: 619 eligible, 170 ballots received: 27% vote to reject
Police: 417 eligible, 254 ballots received: 61% vote to reject
Related Slideshow: Timeline - Rhode Island Pension Reform
GoLocalProv breaks down the sequence of events that have played out during Rhode Island's State Employee Pension Fund reform.
Governor Don Carcieri makes pension reform a top priority in his emergency budget plan. His three-point plan included:
1. An established minimum retirment age of 59 for all state and municipal employees.
2. Elimination of cost-of-living increases.
3. Conversion of new hires into a 401(k) style plan.
See WPRI's coverage of Carcieri's proposal here.
Rhode Island's state administered public employee pension system only held 48% of the assets to cover future payments to its emplyees.
"This system as designed today is fundamentally unsustainable, and it is in your best interest to fix it" - Gina Raimondo
Check out Wall Street Journal's coverage here.
Gina Raimondo defeats opponent Kernan King in the election for General Treasurer of Rhode Island using her platform to reform the structure of Rhode Island's public employee pension system. She received 201,625 votes, more than any other politician on the 2010 Rhode Island ballot.
Raimondo leads effort to reduce the state’s assumed rate of return on pension investments from 8.25 to 7.5%.
Her proposal includes plans to suspend the Cost of Living Adjustment (which allows for raises corresponding with rates of inflation for retirees), changing the retirement age to match Social Security ages, and adding a defined contribution plan.
Raimondo releases “Truth in Numbers”, a report detailing the pension crisis and offering possible solutions. She continues to work to raise public support for her proposal.
"Decades of ignoring actuarial assumptions led to lower taxpayer & employee contributions being made into the system." - Gina Raimondo (Truth in Numbers)
Read GoLocalProv's analysis of the report here.
Read the Truth in Numbers report here.
Governor Lincoln Chafee and General Treasurer Gina Raimondo present their pension reform legislation proposal before a joint session of the General Assembly.
“Our fundamental goal throughout this process has been to provide retirement security through reforms that are fair to the three main interested parties: retirees, current employees and the taxpayer…I join the General Treasurer in urging the General Assembly to take decisive action and adopt these reforms.”- Gov. Lincoln Chafee
Head of Rhode Island firefighters’ union accuses Raimondo of “cooking the books” to create a pension problem where one did not exist. Paul Valletta Jr. states that Raimondo raised Rhode Islanders’ assumed mortality rate to increase liability to the state, using data from 1994 instead of updated information from 2008, and lowered the anticipated rate of return on state investments.
“You’re going after the retirees! In this economic time, how could you possibly take a pension away?” Paul Valletta Jr (Head of RI Firefighters' Union)
Read more from the firefighters' battle with Raimondo here.
Check out the New York Times' take on RI's pension crisis here.
November 17, 2011
The Rhode Island Retirement Security Act (RIRSA) is enacted by the General Assembly with bipartisan support in both chambers. RIRSA’s passing is slated to reduce the unfunded liability of RI’s pension system and increase its funding status by $3 billion and 60% respectively, level contributions to the pension system by taxpayers, save municipalities $100 million through lessened contributions to teacher and MERS pension systems, and lower the cost of borrowing.
Read more from GoLocalProv here.
November 18, 2011
Governor Lincoln Chafee signs RIRSA into law. According to a December 2011 Brown University poll, 60% of Rhode Island residents support the reform. Following its enactment, Raimondo holds regional sessions to educate public employees on the effects of the legislation on their retirement benefits.
Read about how Rhode Islanders react to RIRSA here.
Raimondo hosts local workshops to explain the pension reforms across Rhode Island. She also receives national attention for her contributions to the state’s pension reforms. The reforms are given praise and many believe Rhode Island will serve as a template for other States’ future pension reforms.
Read about the pension workshop here.
Read Raimondo's feature in Institutional Investor here.
March - April 2012
Raimondo opposes Governor Chafee’s proposal to cut pension-funded deposits. She continued to provide workshops on the pension reforms.
December 5, 2012
Raimondo publicly opposes Governor Chafee’s meetings with union leaders in an effort to avoid judicial rulings on the pension reform package. In response, Chafee issues a statement supporting the negotiations.
Read more about Raimondo's opposition here.
Read about Chafee's statement http://www.golocalprov.com/news/new-chafee-issues-statement-supporting-pension-negotiations/">here.
Led by the Rhode Island State Association of Fire Fighters, unions protest the 2011 pension reform outside of the Omni Providence where Governor Lincoln Chafee and General Treasurer Gina Raimondo conduct a national conference of bond investors.
Read about Raimondo's discussion of distressed municipalities here.
The pension plan comes under increased scrutiny as a result of the involvement of hedge funds and private equity firms. Reports show that $200 million of the state pension fund was lost in 2012.
"In short, impressive educational credentials and limited knowledge of investment industry realities made Raimondo ideally suited to champion private equity’s public pension money grab." - Ted Seidle (Forbes)
Read GoLocalProv's coverage of the State Pension Fund's losses here.
Read Ted Seidle's criticism of Raimondo in Forbes.
- 23 Local Pension Plans in ‘Critical’ Condition
- A LIVELY EXPERIMENT May 26 2011 Part 2 Pension Reform
- A LIVELY EXPERIMENT, Pension Reform Pt. 2
- BREAKING NEWS: Providence Moves to Cut Cianci’s Pension
- Chafee Pushes Pension Reform to Cities
- City Council Clashes with Taveras over Disability Pension Request
- Does Rhode Island’s Pension Reform Law have Any Hope of Survival?
- EXCLUSIVE: Providence Pensions—Costs to Triple in 20 Years
- Experts React to Rhode Island Pension Reform Agreement
- GoLocalProv Investigation Uncovers 25 Illegal Pensions in Johnston
- In Case You Missed It: Siedle Report on RI Pension Investments
- LIVE STREAM- RI ACLU Press Conference- Youth Suspension Implications
- MINDSETTER™ Ted Siedle: News from the State Pension is All Good
- Municipal Pension Reform May Be Impossible
- NEW: Chafee Release Video Touting Pension Reform
- NEW: Joint Session On Pensions Kicks Off Tonight
- NEW: Pawtucket Mayor Calls for Municipal Pension Reform
- NEW: Providence Police Union to Vote on Pension Settlement Thursday
- NEW: Raimondo to Host Local Pension Workshop
- NEW: Taft-Carter rules Providence Pension Changes “Fair”
- Official—AG Needs to Investigate Providence Disability Pensions
- PODCAST: State Pols Left in the Dark on Pension Reform Bill
- Pension Fraud—Who’s to Blame?
- Point Judith Made More than Providence on Pension Fund
- Providence Pension Projection Data Raising Questions
- RI Groups Will Target Lawmakers Who Oppose Pension Reform
- Raimondo, Chafee Form Special Pension Task Force
- Rob Horowitz: Pension Reform Poised for Adoption
- Russell Moore: Don’t Gut Pension Reform
- Special Session 2011: Leaders React To Pension Ruling
- State Report: Rhode Island Pension Reform & Falling Off the Fiscal Cliff
- Ten Communities Facing Pension Disaster
- Tom Sgouros: Sharing Risk on the Pension Crisis
- UPDATED: ‘Deficiency in Controls’ Over State Pension Reporting
- Will the State & Organized Labor Reach a Deal on Pension Reform?
- A LIVELY EXPERIMENT April 14, 2011 The Failing Pension System
- A LIVELY EXPERIMENT May 26, 2011 Part 1 Pension Reform
- A LIVELY EXPERIMENT: Pension Crisis
- BREAKING: Court Rules Employees Have Rights to Pension
- Chafee: Everything on Table for Pension Reform
- City Moves to Block Pensions for Corrupt Cops
- Donna Perry: Don’t Ruin the RI Pension Reform Law
- EXCLUSIVE: Providence Unfunded Pension Liability Now At Least $831M
- Experts Score Rhode Island Pension Battle
- GoLocalProv Investigation: Johnston to Crack Down on Illegal Pensions
- Johnston Pension Investigation: Official Demands Answers from AG
- Laffey Blasts Raimondo on Pension Reform
- Majority of Anti-Pension Reform Lawmakers Returning to Smith Hill
- Municipalities Choking on Pension Costs: City-by-City Breakdown
- NEW: Chafee Releases Pension Reform Video
- NEW: Freezing COLAs is Only One Step to Local Pension Reform, Group Says
- NEW: Judge Taft-Carter Won’t Recuse Herself From Pension Lawsuit
- NEW: Pension Fraud Hotline Launched
- NEW: Providence Retirees Approve Pension Reform
- NEW: Raimondo—Pension Reform Needed to Avoid Budget Disaster
- NEW: Treasurer Raimondo Opposes ‘Closed-Door Meetings’ Ahead of Pension Case
- Outrage over ‘Second Pension’ for Esserman
- PODCAST: Unions May Go To War Over Municipal Pensions
- Pension Promises vs. City Services
- Providence - More Double Pensions for Elected Officials
- Providence Pension Return Projection Flawed
- RI Pension Crisis—How Can It Be Fixed?
- Raimondo: Pensions Dragging Down RI Economy
- Rob Horowitz: Pension Reform is a Political Winner
- Russell Moore: Raimondo, Taxpayers Win in Pension Settlement
- Special Session 2011: Pension Showdown Begins
- State Unfunded Pension Liability Goes Up $1.4 Billion
- The Paper Trail: How Fire Chief Got His Special Pension Deal
- Top Ten Local Pension Plans in Crisis
- Under Caprio, RI Pension Fund Paid Among Lowest Fees in US
- Woonsocket Refuses to Release Disability Pension Records
- A LIVELY EXPERIMENT May 19, 2011 Disability Pensions
- A LIVELY EXPERIMENT Pension Reform
- A LIVELY EXPERIMENT: Pension Crisis Pt. 2
- BREAKING: Pension Reform Bill Passes; Heads to Governor’s Desk
- Chafee’s Budget: 3 Percent Increase in Pension Contributions
- City Official Wants to Revoke Cicilline’s Future Pension
- Donna Perry: No Time for Timid Pension Reform in Providence
- EXCLUSIVE: RI Pension Investment in Raimondo’s Pt. Judith Had Steep Losses
- Fire Official Quits to Preserve Higher Pension
- Governor’s Race: Who’s Got the Best Pension Plan?
- Johnston Pension: See the Documents
- Landmark Pension Bill Passes House, Senate
- Michael Riley: Is the RI Pension Commission Making Up Numbers?
- NEW REPORT: Local Pension Funds Going Broke
- NEW: City Retirement Board Rescinds Former Fire Chief’s Disability Pension
- NEW: Fung Calls for Chafee and Raimondo to “Come Clean” on Pensions
- NEW: Judge Won’t Halt Pension Reform Law
- NEW: Pension Reform Coalition Created
- NEW: RI Has Sixth Worst Unfunded Pension Liability
- NEW: Report Finds Municipal Pensions Struggling
- NEW: Union President Says Pensions Have Been “Stolen”
- PODCAST: Chafee Pension Proposal More Severe than Caprio’s
- Pawtucket’s Unfunded Pension Liability Nearing $145 Million
- Pension Reform Breakdown: Plan Kills COLAs For 19 Years
- Providence Chief Sued Over ‘Illegal Suspension’ of Officer
- Providence Shells Out Millions in Out-of-State Pensions
- RI Pension Fund Lost out on $700M in Potential Revenue
- Rhode Island 2011/12 Elementary School Suspension Data
- Rob Horowitz: Providence Pension Deal Provides Model for All Communities