Report: RI needs pension reform

PROVIDENCE, R.I. (WPRI) - A report just released Monday found Rhode Island has one of the most generous pension plan in New England and it's calling for dramatic reform, but labor leaders are giving the findings a thumbs down, saying a deal is a deal.

The report by the Rhode Island Public Expenditure Council found the Ocean State is second only to Massachusetts in pension payouts for New England.

The report recommends doing as 12 other States across the country have done, and move at least some employees into a 401K-style plan.

In 1997, taxpayers dished out more than $80 million into the retirement system. In 2007, that number exploded to nearly $189 million just to keep the pension system afloat.

George Nee, AFL-CIO treasurer-secretary, said pension reform in 2005 tightened benefits to public employees, but RIPEC said it wasn't enough.

One of the report's recommendations is the adoption of a combination pension system, where some employees would remain on the current "defined benefit" plan,  where payouts are taxpayer guaranteed, no matter how the markets perform. Others would be on a "defined contribution," or 401K-style plan.

"I think the question is who bears the risk? Is it the state taxpayer or the employee? We feel it should be a shared risk for both," said Susanne Greschner, RIPEC Director of Policy and Research.

Nee, however, called that idea hypocritical.

"The Executive Director of RIPEC, who did very well with his defined benefit pension plan when he worked with the city of providence, has now decided that no one else should have one," Nee said.

He is referring to John Simmons, who receives nearly $3,000 a month in pension payments from Providence.

Simmons was not available for comment on that matter.

However, Nee did agree more needs to be done and floated the idea of essentially remortgaging the pension system.

But General Treasurer Frank Caprio says without changing benefits, that would just put off the debt for future generations to deal with.