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NEW: Chafee, Raimondo Issue Joint Statement on Pension Settlement

Friday, April 11, 2014

 

Governor Lincoln D. Chafee and General Treasurer Gina M. Raimondo released a statement Friday regarding the state's pension settlement agreement. On Monday, the police unions voted down the agreement, sending all parties back to court-ordered mediation.

Chafee and Raimondo's joint statement:

“More than one year ago, Superior Court Judge Sarah Taft-Carter ordered the parties involved in numerous pension lawsuits from 2009, 2010 and 2011 into mediation. With the help of the Federal Mediation and Conciliation Service, the parties to this litigation worked collaboratively on a proposed settlement.

The proposal announced on February 14 retained the structural elements of the Rhode Island Retirement Security Act of 2011, and maintained 95 percent of the necessary savings for taxpayers. It also offered immediate benefits, certainty and predictability for our public employees and retirees. We believe this proposal was fair for our public employees, retirees, taxpayers and cities and towns. It was also well-received by the various rating agencies.

We would like to commend and thank the plaintiff union leaders that worked closely with us over the last year to reach this settlement. And we would like to thank the large majority of their members who were willing to go forward with us to avoid lengthy and costly litigation.

Due to a small group of union members the settlement agreement has failed and the mediation process has ended. We find this disappointing and frustrating.

While we are disappointed this settlement was not ultimately able to come to fruition, we continue to believe that the pension changes enacted by our General Assembly are constitutional, the State has strong legal arguments to support its positions and will begin to prepare for litigation.”

 

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. 

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2005-2010

In the five years before Raimondo was elected, pension changes included a decrease in established retirement age from 65 to 62, increased eligibility to retire, and modified COLA adjustments.
 
Read the Senate Fiscal Office's Brief here.
 
(Photo: 401(k) 2013, Flickr)
Prev Next

January 2009

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.

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2009

Rhode Island increased mandatory employee contributions for new and current employees. New Mexico was the only other state to mandate current employees to increase their contributions. 

 

Read the NCSL report here

(Photo: FutUndBeidl, Flickr)

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2010

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.

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November 2010

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. 

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April 2011

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.

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May 2011

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

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October 2011

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

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October 2011

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.

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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.

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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.

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January 2012

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

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March - April 2012

Raimondo opposes Governor Chafee’s proposal to cut pension-funded deposits. She continued to provide workshops on the pension reforms.

“The present law is sound fiscal policy and should remain unchanged.” -George Nee (Rhode Island AFL-CIO President)
 
 
See WPRI's coverage of Chafee's attempt to cut pension fund deposits here.
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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

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March 2013

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

Prev Next

April 2013

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.

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June 2013

Reports show that the State’s retirement system increased in 2013 by $20 million despite the reforms being put into effect the previous year.

 

Read GoLocalProv's investigation into the rising pension costs here.

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September 2013

Matt Taibbi publishes an article in Rolling Stone detailing Raimondo’s use of hedge funds as a questionably ethical tool to aid with pension reform. 

Read Taibbi's article in Rolling Stone.

Read GoLocalProv's response to Taibbi here.

Prev Next

October 2013

As Raimondo eyes the role of Governor of Rhode Island in 2014, more behind-the-curtain information about the 2011 pension reform comes to light.

 

Read more from GoLocalProv about the players in the pension battle here.

 
 

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Comments:

IT'S ALL BS!

Comment #1 by LENNY BRUCE on 2014 04 11

If you are a state,teacher,CO or other ERSRI retiree who left before 11/18/2011,and are one of the 1750+ who voted against the Settlement Agreement,please contact [email protected] or Atty Sean O'Leary at 401-615-8584 if you want to join a lawsuit to fight for the reinstatement of your COLA.

Comment #2 by catherine celeberto on 2014 04 12

catherine celeberto retired from the state in 1999 at age 50.
her pension is $50,474.

she worked for the state for 28 years and has been retired for 14. likely she will receive a pension for longer than she's worked.

Quite unbelievable, but apparently that's still not enough for her.

http://riopengov.org/state-pensions/

Comment #3 by Odd Job on 2014 04 13

Still at it, Odd Job? Attacking women with your insipid bullshxx?

Perhaps someone should lug your sorry carcass into court, rip your moronic alias from you, swear you in, and ask you a few questions you'd perhaps prefer not to answer?

Why not attack a man for a change? Or does that not fit with your metro-misogynistic template?

Nice to see you've forgotten nothing and learned nothing.

Comment #4 by paul zecchino on 2014 04 13

PS -
How much is 'enough for her', Odd Job, eh? Nothing? Your bilious two cents?

Ms. Celeberto paid into the state pension fund every paycheck, as mandated by her contract and regardless of her own investments. In return, her contract stated she'd receive COLA's. The state, having long mismanaged the money she placed in trust with its auspices, breached its contract with her in half-clever, Poison Ivy League manner.

That's called 'breach of contract' and people who are sued for breach of contract generally lose.

Perhaps someone should breach your contract with your employer, if you have one. Then you'd wail your vapid protests in high-minded protests screamed in high-C coloratura histrionics wouldn't you?

How much would you allow Ms. Celeberto or the other retirees who earned every penny that was stolen from them?

Or perhaps you don't worry about such things, seeing how you're so much better than those you callously mock.

Why not peddle your insults to the police officers who voted for the good? Or are you nervous around cops?

Your dismissals are those of thugs, who rip an elderly woman's pocketbook and then rationalize it saying, 'you got more money at home, you don't need what I done took'.

Take from you and it'll be the Injustice of the Milennium of course.

Now go right ahead, burp some more of your capon BS at me and take another insult at my family members. Go right ahead. Prove your manhood. Create the long anticipated legal opening.

Comment #5 by paul zecchino on 2014 04 13

Odd Job -

You take issue with Ms. Celeberto working twenty-eight years? How long have you worked at anything, hmmm?

Anytime you want to sign your real name to your taunts, and publish the truth about your life and earnings and job history, you might enjoy some credibility. Until such time, you won't.

From the tenor of your arrested development belch-ups, it doesn't seem likely you own your own business or work in any position of responsibility, does it?

If you did, you'd surely know never to breach a contract with an employee, customer, or vendor.

But you know it all, don't you?

Comment #6 by paul zecchino on 2014 04 13

retiring at 50 is simply ridiculous to anyone not a gov't employee or connected to one.

you stay down there in Fl. with no income tax and thank your lucky stars you married someone who won the lottery by retiring before they're even 50 yrs old.

Comment #7 by Odd Job on 2014 04 13

Odd Job -

Noted. Thank you! Continue. Please do.

Comment #8 by paul zecchino on 2014 04 14

Odd job:

First,retired 13 yes.- no need to make me older than I am.

Next,I would have preferred to explain to you how the State's actuarial determined
8.75%* of my salary, which I was mandated to contribute to ERSRI, was promised to be sufficient to fund my pension benefit,but I suspect facts,figures,or even the law are of no concern to you.

Therfore, my response to you will be at the same level as your question was to me.

Odd job,an anonymous commenter,who I suspects wets himself every time he drives by
Maximum Security,and who probably would never, as I did,have the nerve to walk into a cellblock to inform an inmate that he had been adjudged a violator, and would be a guest of the State longer than he had planned.

That said,most State positions are civil service and there is nothing but air between you and the DOA, so you might want to complete a Masters degree, plus the requisite additional advanced graduate level coursework, take a test,finish in the top 6, among hundreds, and then you can enjoy,as I do, a pension after 28 yrs.of employment.

Too difficult? OK, then take the easy way-vitriolic blogging that serves no practical purpose.

*Teachers contribute 9.5%.

Comment #9 by catherine celeberto on 2014 04 14

PZ has an extensive vocabulary. I always enjoy his posts.

Comment #10 by Redd Ratt on 2014 04 14




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