Years After Reform, RI Teachers’ Pensions Still a Hot Button Issue - Earns “F” Grade
Monday, November 04, 2019
A new study gives Rhode Island’s teacher’s pensions an “F." It is not where Rhode Island was supposed to be seven years later after adopting comprehensive pension reform.
The grade was given by Teacherpensions.org, a project of Bellwether Education Partners, a national nonprofit which says it is “focused on dramatically changing education and life outcomes for underserved children.”
In fairness, the organization scores few states’ pension well with only a few states earning “B” and “C” grades.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTHowever, that poor grade is not the only measure of RI’s pension system — the not-for-profit Pew Research — one of the leading research organizations in America continues to rank RI’s pension system poorly. According to the 2019 report released by Pew earlier this summer, RI’s pension system is only 54 percent funded and the fees the state pays are considered the 4th highest in the country.
“While I’m not surprised at the ranking of ‘F’ for the pension system, I am frustrated with yet an additional layer of stress, angst and anxiety added to teacher morale that is already stressed to the max,” said Maribeth Calabro, President of the Providence Teachers Union,
Pension reform was championed by then-General Treasurer and now-Governor Gina Raimondo. Raimondo became a darling of national business publications and received glowing editorials from the likes of the “Wall Street Journal.”
Raimondo won awards — in 2012, the conservative think tank the Manhattan Institute gave Raimondo their highest award.
“Raimondo put forward a plan that would get the state’s pension costs under control and reduce the risk that further funding gaps would appear in the future. In order to do this, her plan had to differ in a few ways from those seen in most states,” wrote the Manhattan Institute. This year Betsy DeVos, the Secretary of Education for President Donald Trump, won the same award.
Calabro heads the Providence Teachers' Union. (Pictured right, with GoLocal News Editor Kate Nagle).
“We were told, the state was told, this would be better - F is not better. What needs to happen is all of those that are responsible for this failing grade need to get back to the table and come up with a plan to fix it -- a viable plan that doesn’t make hedge fund operators richer and teachers taking two part-time jobs after retirement to make ends meet,” said Calabro.
Problems — Impacts Recruiting and Retention
The study by Teacherpension.org finds “based on our analysis of Rhode Island’s teacher retirement plan, it earned an overall grade of F. Rhode Island earned a F for providing adequate retirement benefits for teachers and a F on financial sustainability.”
Further, the study cites the debt costs, stating, “The majority of contributions into teacher pension plans today are not going toward retirement benefits for today’s teachers; they’re mainly going toward unfunded pension liabilities. Those liabilities are the result of years of poor financial decisions by state leaders, and they leave today’s teachers (and students) paying for past mistakes.”
“Today, 81.6 percent of Rhode Island's pension contributions are going toward pension debt. If it had been more responsible in years past, the state would not be facing such large financial penalties and could be directing more money toward teachers or other budget priorities,” says the study.
Calabro cites the same issues, “We are not talking about the teachers that came into this system and knew what they were getting, I’m talking about people like me and the thousands like me that believed they had a contract with the state, a commitment; and we gave and continued to give our salary and beyond with promises of retirement and it has all been stripped from us.”
“There needs to be a sense of urgency about this issue as well. Teachers went above and beyond and gave extra to help during the banking crisis with the promise of getting that percentage back. Not only did they not get that percentage back but now they work up to 10 years longer for 35% less - they will never break even! Never!” said Calabro.
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