A.G. "Aldo" Palazo
Testimony before the Pension Advisory Working Group, 14 Dec 2023 CCRI Hackett Auditorium:
My name is “Aldo” Palazzo, and I am an ERSRI Member who proudly served as a Teacher at Pilgrim High School in Warwick for approximately 22 years. Before that I was a member of the Faculty at the US Naval War College’s Strategic Research Department. I am here today to speak on behalf of ERSRI members, both Current and Retired, who are not able to attend or speak for various reasons which range from Health issues to Frailty due to age or the fact that many, approximately 7,000 of the 29,000 Retirees have moved from RI to escape our Taxes and the painful reminder of what happened under RIRSA2011, and hopefully I will not fail them!
Before I begin, I want to thank the members of the General Assembly who have apparently finally realized that the Rhode Island Retirement Security Act of 2011, hereafter referred to as RIRSA2011, has had a detrimental impact on our State. Not only on the approximately 29,194 ERSRI Retirees but also the additional 30,000 current Employees and Teachers and how it’s adversely affected State, Municipal and Educational Operations.
By tasking the General Treasurer to create this Pension Advisory Working Group, the PAWG, to REVIEW and conduct an ANALYSIS of RIRSA2011 on Current and Retired Members, i.e. they tasked you to Develop Options for consideration by the General Assembly.
As I understand it, your task is to provide Options to Improve ERSRI Pension Programs and address the Unintended Consequences of RIRSA2011!
I want to Thank GT Diossa and Members of the PAWG for your time and efforts in studying this critical issue. Your tasking is not an easy one and many Retirees, Active Employees and Members of the General Assembly are watching these proceedings closely.
As a Member of Advocates for COLA Restoration and Pension Reform, a Registered Non-Profit with over 2,300 members, our leadership, some of whom have preceded me, chose to address you by dividing our testimony. My area is the PAWG itself.
According to the Operant Directive for this Commission, R.I. Gen. Law § 36-10.2-11
“The advisory working group may include, but not be limited to, designees from the following: the office of the general treasurer, actuarial professionals, public sector unions, state and/or national organizations interested in pension reform and sustainability, pension advocacy groups and financial and investment.”
As I review all your Credentials, impressive as they are, what I do not find is anyone from a Pension Advocacy Group on the PAWG itself. And I would pose the question, “Why Not?”
What many of you, and many watching, might not know is that a member of our group actually submitted a request, a resume and hand delivered them to the State House but somehow, he was NOT invited. Again, “Why not?” RIGL 36-10.2-11 does NOT limit the number of members of this group, so I am somewhat puzzled.
I’m getting on in years but looking at this Commission brings to mind a rather famous line from “Casablanca” “Round up the usual suspects!”
This is NOT meant to cast aspersions on this group but rather it is my own personal observation. With one exception, Mr. Maguire, exactly who represents the 30K Retirees and thousands of Future Retirees in the ERSRI? Having attended the first two Hearings, I have witnessed several members of this Group ask some very telling questions, and I do have hope that you will do the right thing relative to the devastation wrought upon Retirees as well as Current Employees by RIRSA 2011.
Many of us have hope, but there is also trepidation on the part of many ERSRI members. With the Final PAWG Report due on 1 March 2024 and the Final Hearing scheduled on 21 February 2024, only 10 days before, several questions have arisen as to the exact mechanism as to how this Report will be written!
Some members of the Public as well as a few in the General Assembly have already stated that they believe the “Report” is already written. I must add that I am NOT amongst their numbers. I trust you until proven wrong!
“Back in 2013, in a PROJO story written by Katherine Gregg, (June 26, 2013) it was mentioned that the state had $12.9 million in additional assets beyond what was expected in the budget. At that time, there was a RIGL requiring the state to put that money into the pension fund but then Governor Chafee opted to carry that surplus over into the next year’s budget and the House leaders acquiesced.
One Member of the House asked, “Why should anyone trust us again?”
After that, lawmaker after lawmaker rose to talk about the immorality of making a promise to RI Public Employees while cutting their pensions.
That was reported TEN YEARS AGO and many members of the ERSRI believe that nothing seems to have changed.
To the members of this Commission, remember that “TRUST IS EARNED!” Will you dispel that mistrust, or will it be “Business as Usual in Rhode Island?”
“At the 2 November Hearing, OMB Director Brian Daniels, stated that RI Budgets had been “Fiscally Responsible”!
(I found his presence rather interesting as he is NOT listed as a member but was sitting on the Commission that day)
When I approached him after the Hearing and told him that I thought he was being totally disingenuous, he replied “Mr. Palazzo, “I only stated what I was told to present!” How would you take his explanation?”
It is statements like that that give many ERSRI members, both active and retired, reason to pause and to wonder if, as some of them believe, the outcomes of the PAWG, are predetermined!
But Really Now? The RI Budget has increased approximately 85% since RIRSA2011 was passed! From $7.8 Billion to over $14 Billion! That’s an INCREASE of roughly 7 Thousand Million dollars! Think about that!
The Budget increase is roughly 3 times the CPI. (34% vs 87%!) What was the justification? Despite Gina Raimondo’s “Fiscal Crisis! Three and half times the Pension Fund Shortfall! Two Billion at the time! Are you kidding me?
In my mind, Fractional COLAs, are NOT acceptable and anyone proposing such a plan is BETRAYING those they purport to represent given the facts relative to past RI Budgets and current Economic Conditions. The $2.5 per week won’t even buy a coffee in most Restaurants, never mind cover increased Medical costs! Are they kidding?
There are many who believe that GT Diossa is NOT acting in Good Faith relative to the PAWG. I, on the other hand, feel that Mr. Diossa has been given a bad rap and I honestly believe that he should be given the opportunity to prove his critics wrong and will do something for the Retirees. My experience to date is that he IS trying to do the Right Thing for Retirees!
But I continue: RI Public Employees, that is State and Municipal Workers as well as Teachers, have done EVERYTHING asked of them.
They PAID into their Retirement, anywhere from 9 to 10%, of their Gross Salary. Something the State and Municipalities sometimes failed to do!
“I recall meeting with Mr. Almonte back in 2006 regarding the WW Pension Fund and the Towns’ Failure to meet the ARC and as a result, he sent a warning letter to the Town admonishing them as to their responsibilities!”
But I digress. These employees showed up for work EVERY day, providing vital services to the Residents of this state. They taught our Children, and yet in the END, it was the STATE that did not keep Faith with these Public Servants!
Many of these Employees went into Public Service with eyes wide open, they THOUGHT they knew the outcome after 25- or 30-years’ Service to Rhode Island. They made plans in Rhode Island, bought homes and established their lives in the State based upon what they believed was a CONTRACT with the State! Only to find out much later that they had been deceived. Their CONTRACT was NOT really a CONTRACT if the State deemed it to be Politically Expedient.
I’m not going to belabor a point that Mr. Shallcross has already raised but “Yes, we as well as the State, had a Contractual Obligation and somehow the State, for Political Expediency used the RI Judiciary to change that fact!
A friend one posed a rhetorical question to me, “What is a Strike?” Not Mr. Nee’s type of Strike but a Strike in Baseball. Most. people would respond “A missed swing by the Batter. Or a pitch over the plate” Possibly, but he added a different answer, “Whatever the Umpire says it is!” And that is EXACTLY how the State used the Judiciary to change the definition of “Contract” for Political Expediency!
When I hear that a 2% COLA will be restored in 2031 or a possible 3% COLA in 2034, I just shake my head. How many of you believe that ALL of the Retirees will still be here in 2034?
The very idea that this is the State’s GOAL, i.e. wait until the Elderly Retirees pass on, is both Ethically and Morally Reprehensible!
Over the past several months, I have spoken to many Retirees as well as Current Employees who have passed along how RIRSA has negatively affected them. One in particular, Mrs. Brenda Brenner, served as an inspiration for me to engage in this endeavor to right the wrongs imposed by RIRSA2011. She summed it up very succinctly, “Mr. Palazzo,
They are waiting for me to die”!
What will you say to her? Is that really your goal?
One final request of this Commission. I would ask that any and all of the options that you provide to the General Assembly in your 1 March Report include a “Fiscal Note” from Treasurer Diossa’s Office. I am doing so that next year there will be no Excuses for Inaction on their part. Please note that I am asking this “On the Record”!
Of note, 2024 is an Election year and it’s been mentioned that there are approximately 30K Retirees, coupled with another 30 Active Employees within WRSRI. That is a large number of voters. But that’s not the entire story as these people have Spouses and Families that were / are also affected, and I would caution the General Assembly that these people are a force to be reckoned with…... We are NOT going away NOR will we accept anything less than what we were promised in our “contracts” when began working.
Our Commitment to COLA Restoration and Pension Reform is NOT going away and, for me at least, it brings to mind a dictum familiar to most who have served in the Military, “This is the Hill I die on!”
“Twelve Years Silent! SILENT NO MORE!
Thank you for listening as well as your time and consideration on behalf of all of us!
Submitted via online webform