Raimondo: 'Devastation' if reform loses

EAST PROVIDENCE, R.I. (WPRI) - General Treasurer Gina Raimondo says it would be "devastating" if the Rhode Island courts strike down the landmark pension reform legislation that was passed last year.

"If that law is repealed the municipalities will have to find $100 million next year alone," Raimondo said Friday during a taping of WPRI 12's Newsmakers. "You will see devastation, I believe, in municipalities not being able to pay those bills."

The fallout could potentially mean more cities or towns going the way of Central Falls and filing for bankruptcy, she said.

"I think we're going to win," Raimondo said. "But let me be very clear that the pension reform bill that the General Assembly passed in November saved municipalities over $100 million this fiscal year alone and over $1 billion in the next 20 years."

The sweeping changes to the state's pension system are set to take effect on July 1. Raimondo says her office has been swamped with calls from people looking for more information about how they will be impacted.

The changes will mean thousands of current state workers and teachers will be moved into a hybrid pension that includes a 401k-style retirement plan.

Many current retirees will see their annual cost-of-living adjustments – or COLAs – frozen until the pension system is in better fiscal health, which could take nearly two decades.

Separately, Raimondo said she supports a bill proposed by Gov. Lincoln Chafee that would give cities and towns the ability to freeze COLAs and cap pension benefits for the 36 locally administered retirement plans that are not managed by the state.

The pension reform law set to take affect in July has no impact on those plans.

Tim White ( twhite@wpri.com ) is the Target 12 investigative reporter for WPRI 12 and Fox Providence. Follow him on Twitter: @white_tim