Marisa Brown

Honorable Members of the Pension Advisory Working Group,

Your role in the review of the intended and “unintended” consequences of the 2011 Pension Reform is of the utmost importance. You have been tasked with this mission twelve (12) years after the Raimondo Pension Reform Legislation was submitted and approved because the process to upheave the pension system in 2011 was not only flawed, some have suggested it was borderline criminal. Meetings were held with various union groups and votes taken to secure support of the reform by rank and file union members. The members weren’t even provided with the specifics of the reforms before their “votes”. Union members were told that “the cola for retirees would be on hold only until the fund reached an 80% level, that the hybrid pension system would be comparable in benefits to the defined benefit plan, just that employees would take on more risk with the 401(k), and that failure to support the reforms would result in bankruptcy for the State of Rhode Island. This is what was touted by the then Treasurer to retirees, active teachers and state employees, and to the taxpayer who was led to believe that public pension benefits in RI were excessive and needed to be cut. This is what union employees were told. (Non union employees, also members of the pension system had no vote). But when you put it like that, with potential bankruptcy looming, it didn’t sound awful did it? We all had to do our fair share, right?

And this is what members of the General Assembly were told once the embargo was lifted on the pension legislation that was filed in the fall of 2011 by then Treasurer Raimondo. The nitty gritty details of those reforms were never fully disclosed, such that a lay person could understand the implications. This lack of transparency was by design. “Unintended consequences”, I think not. For no one in their right mind would have voted in favor of a pension reform that would put a stop to a retiree’s cost of living adjustment for twenty (20) years, or reduce an employee’s pension by 40% when they had already put in nearly 20 years of service, or set a hard and fast retirement age of 67 less there be a severe penalty of a further reduction of pension by up to an additional cut of up to 35% to retire at age 62-67.

This legislation was voted on in that fall of 2011 just four (4) weeks after it was filed. Four weeks. Four weeks. Four weeks. Did I say four weeks? Also by design. This legislation was purposefully fast tracked by the Treasurer for fear that the ugly details, the draconian measures, the utter harm to retired and active employees would surface. Threats of bankruptcy and threats that the pension fund would run dry ruled the day. Where was the review of such an overhaul? Where was the independent actuarial study that supported the data? It didn’t happen in 2011.

Sadly, that review process is now being taken some twelve years after the fact. It is being conducted by this working group. And the stakes are now even higher as some of the damage has been done. But it is not too late. This group has an enormous responsibility to find some level of balance for each of the groups who were unjustly impacted to varying degrees because of the flawed, secretive, less than transparent process that continues to plague the 2011 Rhode Island Pension Reform to this day. And keep in mind that the subsequent 2015 attempt at a “Settlement Agreement” was closed to the public and to the very members of the Retirement System who would be impacted. Perhaps some transparency in the process back in 2011 would have shed light on what is now politely referred to as the “unintended consequences”. The legislative process takes time. That is especially the case when billions of dollars are at stake. Time allows others to weigh in, allows for a proper analysis, allows the experts to consider the pros and cons, allows those impacted to be properly educated on what the changes mean. Four weeks is not enough time. It takes more than four weeks to determine whether a stop sign should be placed at an intersection. The State was not going bankrupt in four weeks. The State was not going bankrupt at all. This reform legislation should have been vetted well into the 2012 legislative session at a minimum. The urgency put forth by the bill’s sponsor was a means to fast track it to a vote. Legislators were told that any change to soften the cuts were not acceptable. It had to be voted on quickly in its current form. Again, positively by design.

Your work and this process would not be necessary in 2023/2024 had it been given the time it deserved in 2011.

I implore this Working Group to give this review the time it deserves…the time these state employees and teachers and retirees deserve. Please don’t assume the data is accurate. Are we even confident that the pension fund will be at 80% in 2031? It is obvious that the projections in the Truth in Numbers Report (that put this whole reform in motion) were not accurate as Gabriel Roeder’s own 2023 Power Point Presentation to this Working Group reflects significant variations to their Truth in Numbers projections. I respectfully request that you are all confident in the in the information and data that you are considering. And finally, please keep in mind that despite having pension funding levels far inferior to Rhode Island’s, no other state in the entire country passed such draconian pension cuts on its retirees and long serving teachers and state employees. For these current public servants and retirees and to ensure that this State will be able to recruit and retain talented applicants in the future for the roles of teacher, budget analyst, corrections officer, security officer, prosecutor, public defender, cna, doctor, environmental officer, social worker, teachers aide, nurse, principal, paralegal, and the list goes on, please consider the following recommendations:

- Return a reasonable cola to retirees, beginning with those retirees who have been put on hold the longest if the fiscal impact does not allow all eligible retirees to receive it immediately.

- For those active state employees and teachers who were vested with ten years on July 1, 2012, allow them the option to receive a 2% accrual beginning at year 20 with an 11% employee contribution (which is what was offered to the 20 year employee through the Settlement Agreement). Those opting out would remain in their current hybrid system. Employees so impacted could also opt to make their 2% accruals retroactive back to their 20th year of service using their 401k funds to pay for the difference of the increased 11% employee contribution.

- Allow teachers and State employees to retire with at least 30 years of service and age 60. If unable to allow this provision into perpetuity, make it available to those who were vested with ten years of service as of July 1, 2012.

- If the “Rule of 90” cannot be fully implemented for all future retirees, please significantly reduce the exorbitant penalty rates to retire within five years of earliest eligibility date. These employees have already had their pensions reduced and to add an additional 35% reduction if they retire at age 62 simply goes too far.

Thank you all to all members of this Working Group for your consideration of my written testimony and the testimony of all concerned members. Your time and commitment to this process is greatly appreciated.

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