Town Officials Have Fingers Crossed On Pension Reform

On Friday, Town Manager Bill Sequino attended a R.I. Town and City Manager's Association lunch at in which the guest speaker was state General Treasurer Gina Raimondo. Not surprisingly, the subject was pension reform.

The General Assembly has reconvened in special session starting earlier this month to address a pension reform plan put forward by Raimondo and Governor Lincoln Chafee. Raimondo has repeatedly said the state pension system is dangerously underfunded.

For three days last week, the legislature heard from constituents on both sides of the issue. Those who are members of one of the pension systems argued that they themselves were not to blame for the problems and that they had made life decisions based on what they were told they would receive.

Alternatively, others said that without some cuts in benefits, the pension system could lead to bankrupt municipalities and drastic reductions in pensions.

According to Sequino, Raimondo told municipal leaders Friday that her feeling was that the legislature could go either way on the issue.

“It’s close - that’s what we were told today,” said Sequino Friday afternoon.

While , without pension reform the town will owe $2.2 million more in pension costs next year. That’s because of actuarial changes - in the rate of investment return and mortality rates - that were made last year that go into effect next year (fiscal year 2013, which begins July 1, 2012).

Town Council President Michael Isaacs said last week that he thinks there will be pension reform.

“I certainly hope the legislature passes comprehensive pension reform and then it goes into effect,” said Isaacs. “To start speculating now [about the possibility of failure] - that’s so premature.”

“There’s a lot at stake,” said Councilor Jeffrey Cianciolo, “so I think that’s why there’s some hope and there’s some positive belief that [reform will] happen. People are beginning to recognize if we don’t fix it the results could be dire.”

The General Assembly pension subcommittee meets again on Tuesday, Nov. 1. Coincidentally, the Town Council will meet with its newly formed Budget Advisory Committee also on Tuesday, at 6:30 p.m.