Pension promises were pure fantasy
To the Editor:
So far it appears the General Assembly has come to terms with the condition of the state pension system. The changes made to the current legislation seem reasonable enough.
I continue to wonder what is so unique about a public sector job that would preclude the employee from working until they reach age 67. With the exception of public safety employees, who, rightly so, are not required to retire at 67 under the current proposal, are these jobs inherently more difficult or complex than those in the private sector where most people have to work until age 67 before they’re eligible to retire?
Contrary to their public pronouncements, the unions have not offered any substantive solutions. With all due respect to Bob Walsh, selling Twin River and re-amortizing everything hardly constitutes a solution. I’m surprised that he would offer such a simplistic solution given the fact that his first career was in the banking industry. Remember, too, that the overwhelming majority of union representatives on the State Retirement Board voted against lowering of the assumed rate of return from 8.25% to 7.5%, something that simply defied logic. Additionally, the accusation that Treasurer Raimondo “cooked the books” is just absurd – not to mention debunked – and is typical of what one does when one has nothing constructive to offer.
The fact is that along with politicians, union leaders have been actively involved in this pension shell game for the last 30 plus years and simple demographics have now caught up with our ability to pay for all the past decisions that were made against sound actuarial advice. Decisions such as allowing an employee to retire at any age after 28 years of service; loosening the salary calculation from 5 years average salary to 3 years; exploding the annual accrual, and the granting of compounding annual COLA’s have simply collided with the whipsaw of demographics. The idea that an employee should get a raise every year in their retirement when he or she most likely did not get one in every year of their employment is peculiar.
Moreover, these changes were applied retroactively with no concurrent mechanism developed to pay for them going forward. These promises were pure fantasy when they were made and politicians and union leaders both turned a blind eye as to how to pay for them. So once we get past all the hyperbole, class warfare, and misinformation, let us remember the taxpayers, the overwhelming majority of whom are not public sector retirees or employees and who, as a group, will pay the lion’s share of the freight for whatever changes are made to the pension system. One could argue whether the state should even be in the pension business but that is another discussion for another day.