Governor McKee Signs Treasury Bill To Ensure Responsible Pension Financing

Published on Monday, July 29, 2024

Providence, RI – Legislation championed by Rhode Island General Treasurer James A. Diossa that will help ensure responsible management of local pension plans was signed into law by Governor Daniel J. McKee. The legislation (H-7460/S-2756) was sponsored by Representative Alex Marszalkowski and Senator Walter Felag. 

Rhode Island cities and towns that administer their own pension plan must now regularly provide an actuarial experience study to the State. This information will be incorporated into an annual report prepared and published by the Advisory Council for Locally Administered Pension Plans, a five-member body chaired by the General Treasurer. 

When calculating the annual required contribution of a pension plan, an actuary must make a number of assumptions concerning variable factors like projected investment performance and economic climate, life expectancy, employee attrition, and other social and demographic conditions. Crucial to responsible pension management, an actuarial experience study is a periodic review and analysis of these assumptions to test their accuracy and make corresponding adjustments. 

“This legislation re-establishes transparent administration and accountability for locally managed pension plans. When I became Mayor of Central Falls, I inherited a pension system that had been underfunded for decades and ultimately bankrupted the city. I see local pension oversight as core to my mission as General Treasurer. This legislation helps ensure municipalities that manage their own plans do so responsibly, without taking shortcuts,” said General Treasurer Diossa. “Ultimately, this will help ensure a secure retirement for hardworking public servants and protect taxpayers.” 

"Protecting the pensions of our public servants is critical to not only those workers and their families, but the financial health of our cities and towns," said Governor McKee. "I'm proud to have signed this legislation which increases transparency and accountability surrounding these programs, and I applaud the efforts of General Treasurer Diossa and the bill sponsors. This is a win for our communities and taxpayers."

“A sound and stable local pension plan is crucial to the well-being of our dedicated retirees who rely upon their pensions to live their daily lives.  This legislation will ensure the health of our local pension plans so that they may continue to provide what our retirees deserve,” said Representative Marszalkowski.

“Pensions are contractual promises made to our loyal municipal employees and we must make sure that these promises can be delivered to them when they retire.  This new law will bring a new level of oversight into our local pension systems that will protect the financial health of our retirees and municipalities,” said Senator Felag.

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