Posted by: Providence Chamber of Commerce | November 15, 2011

Last days to weigh in on RI Pension Reform

The bill to reform Rhode Island’s public employee pension system passed two legislative committees last Thursday night, setting the scene for the full legislature to vote on the measure, scheduled for this Thursday, November 17th.

The bill was revised prior to the committee vote, addressing concerns raised about cost of living adjustments in pensions and the retirement age.

The amended bill suspends cost-of-living adjustments (COLAs) for all workers, though an interim COLA may be awarded every fifth year if the pension fund’s investments preform well. It also raises the official retirement age to 67 with some exceptions and puts most workers into a hybrid plan.

The original bill was proposed by Gov. Lincoln Chafee and Treasurer Gina Raimondo to address mounting pension liabilities that have threatened the state fiscally. Among the provisions revised in the amendment process is allocation for the cost of living adjustments to be given to retirees every five years. Under the revised bill, the COLAs would be limited to four percent and would only cover the first $25,000 of a pension. The original legislation had required retirees to wait until the pension system was 80 percent funded before receiving a COLA increase.

The revised bill also produces a new plan to allow for retirees to ease into pension benefits starting at age 59. The original Chafee-Raimondo plan had retirees starting to receive pension benefits only at the minimum age to collect Social Security.

Pension reform legislation has been controversial, with public workers staging protests at the State House, coupled with extensive public information campaigns voicing concerns regarding potential impacts on retirees and implemenation processes. Many of these issues were heard and addressed by the legislative committees prior to passage. The Chamber salutes Senate President Teresa Paiva Weed and House Speaker Gordon Fox for sponsoring the legislation.

Now that the legislation is scheduled to be considered by the full General Assembly, it is imperative that the voice of the business community be heard; as the consequences of not reforming the system will have a significant impact on Rhode Island’s economic and business development climate. Call your Senator and your Representative today and ask that they vote for pension reform. The time has come! (To find your elected officials, visit http://www.engageri.com)


Responses

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