NEW: Governor and Treasurer Outline Pension Reform Proposal
Friday, September 30, 2011
In a letter addressed to "fellow state employees," General Treasurer Gina Raimondo and Governor Lincoln Chafee outlined the defining aspects of their impending pension reform proposal.
In the letter, the governor and the treasurer made clear that they would "propose no change in the retirement age to those already eligible to retire," nor would they propose any incentives to retire early--emphasizing that if an individual continues to work, they will continue to accrue benefits.
Among the goals identified in the letter were:
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe letter began by emphasizing the need for "comprehensive, one-time reform."
"It isn't fair to adjust the pension system year after year," said the letter, which declared any reform will be aimed at fixing the problem "once and for all."
The letter also reaffirmed the necessity of taxpayer support to the pension system. "State employees did not cause Rhode Island's pension problem. And so it would not be fair to expect that state employees will bear the entire burden of fixing the problem."
According to the letter, the coming reform proposal will not reduce any benefits that have already been accrued by either active or retired state employees. Furthermore, any state employees eligible to retire or nearing retirement will not be incentivized to accelerate their retirement plans.
In the letter, the governor and the treasurer also made clear their belief that "COLA changes are essential to restoring fiscal stability to the state's pension system." According to the letter, the governor and treasurer are currently exploring a temporary COLA suspension, tying COLAs to investment returns, and/or limiting COLAs to a lower fixed amount.
"We are in this together. Rhode Island has great challenges and opportunities ahead. We all have a stake in helping our beautiful state reach its full potential…fixing our pension system is an essential step to helping Rhode Island realize its full potential," the letter concluded.
