PROVIDENCE, R.I. – Governor Lincoln D. Chafee and General Treasurer Gina M. Raimondo today unveiled their comprehensive pension reform legislation, the Rhode Island Retirement Security Act of 2011 (RIRSA), before a joint session of the General Assembly.
"I am pleased that General Treasurer Raimondo and I will be presenting a proposal that is truly comprehensive,” Governor Chafee said. “Our fundamental goal throughout this process has been to provide retirement security through reforms that are fair to the three main interested parties: retirees, current employees and the taxpayer. I believe that if we work together to pass comprehensive reforms now we can avoid coming back to take up this issue again. I join the General Treasurer in urging the General Assembly to take decisive action and adopt these reforms."
"Re-designing the state pension system is in the interest of every Rhode Islander and is critical to moving toward a thriving economy,” Treasurer Raimondo said. “The Rhode Island Retirement Security Act is the culmination of months of thoughtful analysis focused on creating a healthy pension system that is affordable, sustainable and secure for retirees, employees and taxpayers."
RIRSA is designed to provide a secure retirement for all 66,000 members of our state retirement system. It also ensures that the pension system is well-funded, and that the pension line item in the annual state budget will not jump to unaffordable levels in the future. It shifts the current cost burdens, which are now most heavily concentrated on the backs of taxpayers and younger employees, across all stakeholders.
Passing RIRSA will:
- Reduce the unfunded liability of Rhode Island’s pension system by $3 billion and increase its funding status to over 60 percent immediately
- Level taxpayer contributions to the pension system in FY2013 (approximately $300 million)
- Save taxpayers at least $3 billion over the next decade
- Immediately save municipalities approximately $100 million through decreased contributions to the teacher and MERS pension systems and at least $1 billion over the next decade
- Strengthen and modernize the state-administered pension system to ensure that earned retirement benefits are there for hard-working public employees, and that the state will be able to attract and retain the best and the brightest employees
- Lower the cost of borrowing, enabling the state to invest in other key initiatives
- Require those independent municipal pension plans with funding levels below 60 percent to create a solvency plan or face penalties