4/20/10

RI MUST Change the Pension Fund

The current sorry state of the RI pension fund and its future are squarely before the General Assembly right now and these concerns have surfaced, as they should, in the gubernatorial campaign. General Treasurer Frank Caprio, who is seeking the Democratic nomination for governor, has just come out with a plan of his own to reform the pension plan and curb its excessive spending. Caprio wants to modify the plan by moving all active state workers (plus teachers) into a "hybrid" plan that combines traditional pension coverage (though capped at a much lower level of salary) along with a new 401(k) aspect. This makes much needed sense.

Unions of course don't want any significant changes to the current plan despite the fact that the plan is drowning in red ink and will collapse into insolvency in a decade or less. The unions don't have a solution for the pension crisis.

Neither, it appears, does Patrick Lynch, also a Democrat contender for governor. He doesn't support the move to a 401(k)-type plan. Lincoln Chafee and John Robitaille (independent and Republican for governor respectively) are also calling for fundamental changes in how the pension fund is structured and funded.

Changing the state pension fund (as well as the municipal funds that are structured the same way) is of absolute priority if this state is serious about getting out from under this pension mess we're in.

Unfortunately, many legislators (and their union watchdogs) see things differently. They must be living in a different world than the rest of us.

4 comments:

  1. Once again, Mr. Hazen-White, your post is devoid of facts. If you are going to make such blanket accusations as "unions don't have a solution for the pension costs" you should be able to back up such a claim.

    There are multiple suppositions within your post that need to be challenged.

    First, that pension "spending" is what is driving the cost of paying for the pension. In fact, it is the opposite. It was the lack of spending, indeed, that is a key contributing factor to the so called "unfunded liability."

    Second, no where does any credible source claim that the pension fund in a decade or less. That is simply untrue.

    Thirdly, "changing the state pension fund" as you say will exacerbate the very problem of unfunded liability that you decry. The upfront cost of such a switch would further strain the state budget and the out year cost to the taxpayers is larger than current projections.

    I truly hope you allow this comment to be posted and if you would like to debate any of these facts on any of the various media forums on which you participate please contact my office at NEARI at 401-463-9630.

    Patrick Crowley
    Government Relations
    NEARI

    ReplyDelete
  2. Your blog on state pension funds is spot on. If we allow these union lobbyists to continute to strong arm the general assembly and the taxpayers of RI, nothing will ever change.They need to hear loud and clear that we are tired of their bullying tactics, and it is time for reasonable financial change in how state and local pensions are funded. You need to stay after these people. Don't let them bully you along with everyone else. You are saying what needs to be said. Keep up the good work.

    ReplyDelete
  3. Get over it. The state raided the pension system, knew it's obligations and let it slide to this point.

    The ethical thing is to honor your obligation, and move new hires to the hybrid plan.

    I always find it intersting that when someone that had a business handed to them feels they have accomplished something sort of like a monarch.

    Mr. White you would fit in with the silver spooner in NP Charlie. Inherit a goldmine and act like you alone have the answers while those that live in the system are not worthy.

    ReplyDelete
  4. Mr. Hazen-White:

    It has been a week and I still haven't heard back from you about my offer to discuss the pension issue an the misinformation your have in your post.

    Please contact me at 463-9630.

    ReplyDelete

If you don't have an account from the list below, simply use ANONYMOUS.