PROVIDENCE – More than a decade after then-Treasury Secretary Gina Raimondo made a national name for herself by leading a dramatic overhaul of the state’s pension system, Rhode Island’s current state treasurer, James Diossa, , has begun a review of one of the more controversial ones. With Raimondo’s cost-saving package.
The suspension of pension annual increase guarantees (known as COLAs) for tens of thousands of retired public school teachers and civil servants will be reconsidered through the creation of a “Pension Advisory Working Group”, which the state of Diossa is expected to announce on Tuesday. become. Rhode Island lawmakers have previously faced a persistent and increasingly organized group of retirees who want the state to reinstate COLAs, and fear they will all die.
What will the Pension Advisory Committee consider?
The question is: Can Rhode Island taxpayers afford to recoup the COLA that retired state employees received each year before the massive cost-cutting pension overhaul in 2011? Previously, many of them were adding up to 3% compound interest increases to their pensions each year.
These compounding annual adjustments add up to increases, raising the “average pension” for retired teachers from $40,151 in 2006 to $43,053 by 2011, according to a Journal analysis earlier this year. The number continued to increase from there.
over the same period, COLA price jumped from $62.9 million $104 million for retired teachers. For retired state employees, that rose from $43.6 million to $64.6 million, according to state pension consultants.
more:State retirees argue: Many people won’t live to see COLA increases even if they reopen in 2031
Since the Raimondo-led reforms, retiree benefits have increased modestly every four years. Under current law, full reinstatement is not expected until the pension fund has sufficient funds to cover 80% of the state’s current and future obligations to pensioners. Expected date: 2031.
In a major budget bill passed last June, state lawmakers directed Diossa to “establish a working group to develop options…” [to] It aims to “address the unintended consequences” of the 2011 pension overhaul and was supported by then-Treasury Secretary, future governor and current U.S. Secretary of Commerce Raimondo.
How do groups work?
Under the plan to be rolled out on Tuesday, the advisory group will meet at least six times by February 21, 2024, to assess the “impact” of the COLA suspension and options for reinstating it, in whole or in part, and issue a report. We are planning to make an announcement. March 1, 2024 Group findings and potential options.
“As Treasurer, it is my duty to protect Rhode Island’s assets and strengthen our state’s fiscal position, including our $10.5 billion in pension system assets,” Diossa said. “This task force will examine the effects of the Retirement Security Act of 2011 and ensure that Rhode Island retirees, public servants, and taxpayers continue to be protected.”
The 10-member advisory group includes Rhode Island President George Nee, Rhode Island AFL-CIO Secretary and Treasurer Patrick Crowley, and John P. Maguire, who holds a designated seat. Includes prominent figures in Rhode Island. Become an “active teacher representative” on the State Retirement Board.
Others on the list include former Auditor General Ernest Almonte, who now heads the Rhode Island League of Cities; Director of Administration Jonathan Woomer and former Director of Administration Michael DiBiase, who currently chairs the Rhode Island Public Expenditure Council.Edinaldo Tebaldi, professor of mathematics and economics at Bryant University
And from outside the inner world of the Rhode Island Legislature, Eric Atwater – Aon PLC Partner. Thomas Huestis – Senior Managing Director, Public Resource Advisory Group.alicia munelle – Laura Quimby, director of the Center for Retirement Research at Boston University and/or her designee, senior research economist at the center;
According to Prime Minister Diossa’s office, the entire Pension Advisory Working Group will meet on November 2, November 30, and December 14, 2023, and at least six of January 17, January 31, and February 2023. It is scheduled to meet at the State House at 4 p.m. .21, 2024.
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