Treasurer won’t submit pension reform this year

General Treasurer Gina Raimondo said Wednesday that she won’t be submitting pension reform to this year’s General Assembly, and some lawmakers are disappointed.

“I don’t know why we’re putting it off. We need to bite the bullet and do it,” said Rep. Sam Azzinaro, D-Westerly. “It’s simple as that and it’s going to be a big bullet to bite.”

The size of the problem was confirmed when the Rhode Island’s retirement board learned the latest numbers with a more realistic prediction of investment returns.

“It’s substantially more money out of state and municipal budgets to the tune of $600 million in Fiscal Year 2013 from the state budget and into the state pension system,” Raimondo said.

“We truly need a solution, but to Treasurer Raimondo’s credit, she just got in in January and it is going to take some time to process this. It’s already May and the session only has six weeks to go,” said Rep. Deb Ruggerio, D-Middletown.

“We have done knee jerk pension reform and it really hasn’t been pension reform, it’s been aimed at balancing budgets and not pension reform. I think it’s probably time to do it right,” said George Nee, president of the AFL-CIO.

Raimondo said it won’t be too long before she’s developing an approach to solving what she said is the state’s biggest problem.

“I know it’s a crisis but because it’s a crisis, we have to get it right,” Raimondo said.

She said it’s possible her office might have something over the summer or in early fall.

Also Wednesday, the retirement board voted unanimously to raise taxpayers’ contributions to pension plans for state employees and teachers.

The board’s vote comes about a month after it approved a new set of assumptions that placed the state’s unfunded pension liability 27 percent higher than previously thought.

Wednesday’s vote means the state’s contribution rate for state employee pension plans will jump over 10 percentage points – to over 36 percent from 23 percent – for the fiscal year starting July 1, 2012. The contribution rates for public school teachers that fiscal year will also rise, to over 35 percent from about 22 percent.

The unfunded pension liability is $2.7 billion for state employees and over $4.1 billion for teachers.

The Associated Press contributed to this report.

Article source: http://www2.turnto10.com/news/2011/may/11/5/state-faces-9-billion-pension-liability-ar-485002/

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