Official Statement: Governor, Treasurer, Plaintiffs Issue Joint Statement Regarding Pension Lawsuit
Friday, February 14, 2014
“More than one year ago, Superior Court Judge Sarah Taft-Carter ordered the parties involved in numerous pension lawsuits into mediation. With the help of the Federal Mediation and Conciliation Service, the parties to this litigation have worked collaboratively on a proposed resolution.
“The settlement agreement marks an important first step forward, and the beginning of a process that will benefit all Rhode Islanders. It is a proposal that we all support and jointly offer to the General Assembly, members of the retirement system, and to the public.
“Government cannot work without committed and dedicated public servants. Whether they serve our state by keeping us safe, teaching our children, repairing our roads, or in so many of the unheralded roles that keep our government running, they command our respect, and deserve a dignified and secure retirement. At the same time, too many of our cities and towns continue to face financial challenges. The proposal we jointly offer provides certainty and predictability for our public servants and municipalities to appropriately plan for the future.
“This proposal should not be perceived as a victory by one side over another, rather it is a positive first step forward providing for the continued stability and predictability of the retirement system for decades to come. Crucially, this proposal does more than end the risks associated with a costly and protracted litigation. This settlement proposal would resolve six pending lawsuits contesting changes made in 2009, 2010 and 2011. It also demonstrates that our small state can lead the rest of the nation and come together to solve big problems.
“We believe this proposal is fair for our public employees, retirees, taxpayers and cities and towns. We look forward to working together with all concerned as we begin this process.
“We would like to thank the Court and the Federal Mediation and Conciliation Service for all their efforts in helping the parties to achieve this result.”
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.
- Aaron Regunberg: Corporate ‘Reform’ Alienating Teachers/Principals
- Chafee to Propose Reform of EDC Loan Program
- Donna Perry: Don’t Ruin the RI Pension Reform Law
- EXCLUSIVE: Boston Teamster Boss Says Providence Reform Group to be Punished
- Former School Official—Prov. Teacher Contract a ‘Blow’ to Ed Reform
- Health Reform Repeal Would Cut Benefits for Nearly 400,000 in RI
- Laffey Blasts Raimondo on Pension Reform
- NEW: Cicilline Pushes for Government Reform Package
- NEW: Former Union Head Day Blasts City Council on Pension Reform
- NEW: Judge Won’t Halt Pension Reform Law
- NEW: Providence Retirees Approve Pension Reform
- PODCAST: Projo, Other Papers Hire Lobbyists to Block Budget Reform
- Prov. Firefighter’s $200K Sparks Calls for Reform; OT in Millions
- Reform, Not Replace Public Education
- Rob Horowitz: Pension Reform is a Political Winner
- SPECIAL REPORT: Healthcare Reform
- Smart Benefits: Healthcare Reform—Big Rewards for Wellness in ‘14
- State Report: Rhode Island Pension Reform & Falling Off the Fiscal Cliff
- Travis Rowley: “Hope and Change” for “Pension Reform”
- Aaron Regunberg: History and Education Reform
- Campaign Update – Caprio Defends Gist, Supports Ed Reforms
- Chafee: Everything on Table for Pension Reform
- Donna Perry: No Time for Timid Pension Reform in Providence
- Former US Education Official Rips Commissioner Gist & RI’s Reform Efforts
- Health Reform Saving RI Millions
- Lawmakers Rake in $120k Since Voting Against Pension Reform
- NEW: City Council Passes Financial Reform Ordinances
- NEW: Mediation Ordered in State Pension Reform Lawsuit
- NEW: RIPEC Report Urges Sales Tax Reform
- PODCAST: Prov. Firefighter’s $200K Pay Sparks Calls for Reform
- Providence Councilman Proposes ‘Pay to Play’ Reform Plan
- Reforms Needed to Address RI’s Growing Fiscal and Political Crisis
- Rob Horowitz: Potential New Life for Campaign Finance Reform
- Smart Benefits: 5 New Healthcare Reform Taxes
- Smart Benefits: New Healthcare Reform Fee Means Higher Premiums
- THE BIG POLL #2 - HEALTHCARE REFORM
- Will the State & Organized Labor Reach a Deal on Pension Reform?
- Aaron Regunberg: RI Students Left Out of Education Reform Debate
- Cicilline Won’t Take Pledge on Campaign Finance Reform
- Donna Perry: Road to Reform Reaches Retirees
- Electoral College Reform: Will RI Support National Popular Vote?
- Gist Joins Education Reform Group
- INVESTIGATION: Despite Reform, Pensions Will Cost RI More in 2013
- Majority of Anti-Pension Reform Lawmakers Returning to Smith Hill
- NEW: Costantino Proposes Government Reform Package
- NEW: Freezing COLAs is Only One Step to Local Pension Reform, Group Says
- NEW: New Pension Reform Coalition Formed
- NEW: Raimondo Featured In Institutional Investor on Pension Reform
- PODCAST: State Pols Left in the Dark on Pension Reform Bill
- Providence Would be Devastated if Courts Block Pension Reform
- Rob Horowitz: Progress Possible On Immigration Reform
- Smart Benefits: 5 Reasons Why Healthcare Reform Hurts Workers
- Smart Benefits: Next Steps in Healthcare Reform for Employers
- TODAY: Education Reformer Demands Answers on Race to the Top
- Aaron Regunberg: Reform the Business Sector in 2012
- Carcieri, Lynch Battle Over Health Care Reform
- Congressional Candidates Debate Campaign Finance Reform, Jobs
- Donna Perry: The Butke Candidacy is About More than Education Reform
- Exclusive Poll: Two-Thirds Of Voters Don’t Trust Pols With Pension Reform
- Gist: Reform at Central Falls Now Can Move at ‘Light Speed’
- Introducing Julia Steiny: A Union Giant Converts To School Reform
- Municipal Pension Reform May Be Impossible
- NEW: Ed Reform Group Endorses Speaker Fox & 3 Others in Local Races
- NEW: Governor Chafee Says Pension Reform is “Incomplete”
- NEW: Pawtucket Mayor Calls for Municipal Pension Reform
- NEW: Raimondo—Pension Reform Needed to Avoid Budget Disaster
- Payday Lending Reform Dead Again in Session’s Final Hours
- Providences Selects Reform Plans for 5 Failing Schools
- Rhode Island a Prime Example of Split on Immigration Reform
- Rob Horowitz: Progress on Comprehensive Immigration Reform
- Smart Benefits: Employers Are Tangled Up in Healthcare Reform
- Smart Benefits: The Latest Healthcare Reform Cost
- Taveras Budget: No Pension Reform—Yet
- Aaron Regunberg: Teaching Evaluations Another Education Reform Failure
- Carol Anne Costa: Bigger Fish To Fry With RI Business Reforms
- Council at Odds: Members Call for Changes to Pension Reform
- Donna Perry: The Expanding Reform Movement in RI
- Federal Officials Coming to RI to Explain Health Reform
- Group Hopes to Reform Providence Redistricting Process
- Julia Steiny: Michelle Rhee Throws Gas on Ed Reform Hostilities
- NEW: Block to Fox: Spare Us Lectures on Reform
- NEW: Ed Reformer Butke Leaving RI-CAN to Run for State Senate
- NEW: Governor Postpones Israel Trip to Focus on Pension Reform
- NEW: Pension Reform Coalition Created
- NEW: State Saves Millions from Medicaid Reforms
- Pension Reform Breakdown: Plan Kills COLAs For 19 Years
- REPORT: RI Public Pension Reform - Wall Street’s License to Steal
- Rob Horowitz: Comprehensive Immigration Reform Is Back
- Rob Horowitz: RI Leads the Way on Pension Reform
- Smart Benefits: Employers/Insurers To Foot Healthcare Reform Fees
- Smart Benefits: Where RI Candidates Stand on Healthcare Reform
- Tea Party Lines Up Behind Treasurer Raimondo on Pension Reform
- Aaron Regunberg: Think Again on Pension Reform
- Central Falls Paves the Way for Pension Reform
- Do the RI Gubernatorial Candidates Support Education Reform?
- Donna Perry: Time for Heavy Lifting on Disability Pension Reforms
- Federal health reform delivers long-term benefits to Rhode Island
- Guest MINDSETTER™ Dan Lawlor: Time to Think Beyond Reform
- Kerry King Addresses Pension Reform
- NEW: Chafee Release Video Touting Pension Reform