Posted on 09/25/2015 3:40:38 PM PDT by DUMBGRUNT
But Ms. Raimondo was able to revamp her state’s pension system, keeping some of the traditional structure while lowering the cost, and surviving lawsuits by workers and retirees who called her moves unconstitutional.
Mr. Emanuel’s attempts to rein in pension costs, in contrast, have been thrown out by a judge, leading to his appeal this week for a big tax increase
(Excerpt) Read more at nytimes.com ...
For Ms. Raimondo, persuading the state legislature to do radical pension surgery was a matter of explaining the depths of the problems. She began a series of town hall meetings, where she said that the state had promised its workers far more than it could deliver. The mismatch was so big that if the pension system collapsed, it could take the state down with it, she warned.
And then, in the middle of her road show, the small city of Central Falls went bankrupt. It had never joined the state pension system, preferring to run its own plan, and now its pension fund for police officers and firefighters had run completely out of money. The pensions of retirees, some elderly and infirm, were cut sharply.
As states and municipalities struggle with rising pension costs, the governor, legislature and labor organizations in Rhode Island were able to agree on reductions to pension obligations and avoid tax increases or other financial burdens. Here are some of the most significant changes.
Cost of living adjustments
Before: Retirees’ pensions increased by 3 percent each year, compounded.
After: Annual increases for retirees are suspended until the pension system is at least 80 percent funded; when they resume, the rate of increase will apply only to the first $25,000 of a retiree’s pension.
Defined benefit plan
Before: Workers earned credits toward a predetermined benefit with each year of work. Pensions could range as high as 80 percent of a worker’s salary, not counting annual increases.
After: Workers keep the pension credits they have earned through 2012, but for future years of work they will earn smaller annual credits.
Defined contributions
Before: An optional deferred compensation plan was available.
After: Workers get a mandatory defined-contribution plan, run by an outside vendor. They must contribute 5 percent of their pay; the state adds 1 percent. Workers choose their own investment options.
Retirement age
Before: Full pension at 62.
After: Retirement ages match Social Security standards.
Thanks for the pension solution research and providing a great summary.
Here in Illinois, taxes are going to rise until the taxpayers are happy, or dead.
YW ... I was surprised it was so short and simple
I’ve read a lot of articles about this woman, she’s always come across and smart and sincere and I know she worked very hard to get this done.
Thanks for your summary!
Odd. When "America's only aircraft manufacturer" took over America's last other aircraft manufacturer qualifying service formula changed, definition of qualified service changed, health benefits disappeared, and terms like "precedent" & "contract" were plowed under.
Only those wallowing in public retirement/compensation schemes believe their swag is guaranteed.
Oh, so they got a big one time payment.
The pain hasn’t started yet.
Let’s see what happens after they spend that big one time payment.
Why is Raimondo a Democrat since she is practicing commonsense conservative economics - realistic, trying not to cut the most vulnerable, but telling it like it is?
However, a kudos to her for doing something constructive in a state I’d like to see slip into the sea, but it is nothing like Connecticut which I would like to see Neutron-bombed out of existence.
I think you're going to see this happening repeatedly all across the country.
They’re running out of ways to keep pension funds.
Junk-Debt Investors Fight for Scraps as U.S. Shale Rout Deepens
http://www.bloomberg.com/news/articles/2015-09-25/junk-debt-investors-fight-for-scraps-as-u-s-shale-rout-deepens
Redirect workers union contributions to their pension plans until the plan is fully funded.
I’m sure the workers won’t mind, and the union is there for the workers, right?
Or gone.
It can be difficult to go when your family is all
in the area.
And when your house has lost about half of it value.
Well it could go back up? Someday? Possible? Maybe...
I think that’s the reason many of us haven’t left already.
Totally agree about CT, that is one messed up weird vibe state.
Hubby, the kid and I once drove to Vermont and intended to return to NJ that same day. It was just too far to make it home so we ended up staying in some hotel/motel in CT.
That next morning we got the local paper outside our room for free (ah, the pre-internet days of newspapers, I admit, I kind of miss them).
I’ll never forget looking at that paper, one story was about some poor woman who had brain cancer (or something like that) and her family (husband and two teenage daughters) basically could not wait for her to die. She wasn’t really a big invalid or anything, but she was going to die any way, so what’s the delay? Even her Lutheran minister chimed in on the die already! side.
Another story was about some other woman who had survived an attempted murder, by another woman, that ended with the intended victim in a shower stall or bathtub taking like 15 shots, or something like that, but still not dying. No Lutheran minister opined on whether or not this was a good thing. Yes, I think drugs might have been a factor, or jealousy, or both.
After perusing these stories I turned to hubby and I said, we gotta get out of this state stat! Wake up the kid, we are heading for the border!
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