Raimondo, Chafee outline pension reform

PROVIDENCE, R.I. (WPRI) - After months of speculation and weeks of long meetings, state workers are getting a preview of what pension reform in Rhode Island may, and may not, look like.

As a precursor to a special session of the Rhode Island General Assembly set for next month, Gov. Lincoln Chafee and General Treasurer Gina Raimondo Friday sent a letter to state workers, outlining some of the key components of the pension reform discussion and the eventual outcomes for which they are both hoping.

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Estimates put Rhode Island's unfunded liability for public workers' pensions at $7 billion. That includes only workers in the state-run system; municipal pension systems owe more. But Chafee and Raimondo are planning to focus primarily on the state-run system in the legislation they'll release soon.

The first point Chafee and Raimondo said they wanted to make clear was that they will not propose any changes in the retirement age for those already eligible to retire, nor will they propose early-retirement incentives.

The goal is to enact a "comprehensive, one-time reform" that stabilizes the pension system permanently, the pair wrote in the letter, which was included in state workers' paychecks on Friday.

"It isn't fair to employees to adjust the pension system year after year," the two leaders wrote. "We will be actively engaged with the members of the House of Representatives and the Senate to advocate for a legislative solution that fixes the problem -- once and for all"

The letter also said the main focus would be on cost-of-living adjustments (COLAs), the annual increases in employees' pensions that are meant to protect retirees' purchasing power.

Some of the reforms could include:

• A temporary COLA suspension
• Tying COLAs to investment returns
• Limiting COLAs to a lower, fixed-dollar amount

Chafee and Raimondo also made it clear that state workers would not be in this alone.

"State employees did not cause Rhode Island's pension problem," they wrote. "We therefore expect that taxpayers will continue to do their share to ensure the solvency of the pension system." They did not provide any more specifics on that, however.

Chafee and Raimondo are planning to unveil their proposed pension legislation in the first two weeks of October. After that, lawmakers say they'll schedule a two- to three-week series of legislative hearings, and then votes in both chambers on the legislation. Officials say they want to finish their work this fall.