Did Mismanagement of RI Pension System Cost Workers Their Promised COLA? Siedle Wants to Investigate
GoLocalProv News Team
Did Mismanagement of RI Pension System Cost Workers Their Promised COLA? Siedle Wants to Investigate
Specifically, he wants to uncover the full scope and cost of pension management fees, in his latest look at the state since his first investigation was conducted under then-General Treasurer — and now U.S. Commerce Secretary — Gina Raimondo, who had stripped retirees of their cost-of-living-adjustment under her controversial pension reform.
“Did mismanagement of the pension cost workers their promised COLA? I think the answer is pretty clear,” said Siedle on Tuesday.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTSiedle has launched a crowdfunding effort for a new investigation under newly elected Rhode Island General Treasurer James Diossa.
He writes:
“Since completing the first participant-funded forensic investigation of a state pension in history — the Rhode Island pension system, ‘Rhode Island Public Pension Reform: Wall Street's License to Steal,’ in October 2013 — our goal has been to restore transparency, reduce costs, improve investment performance, expose gross mismanagement and report potential wrongdoing.
As a result of that investigation, the reckless hedge fund gambling strategy implemented by then-Treasurer Raimondo was abandoned and disclosure of investment costs was improved immediately. Nevertheless, gross mismanagement of the state pension continued (and grew worse) under former Treasurer Seth Magaziner. With yet another Treasurer utterly lacking investment experience coming into office, it is imperative to alert him as to stakeholder concerns and demand he addresses them.
Today public pension stakeholders, including participants and taxpayers, pay the cost for experts plan sponsors hire for conflicted advice regarding retirement plan matters, yet lack access to independent experts of their own choosing. Without the information and specialized knowledge required to evaluate the retirement plans their state government employers offer, participants lack an effective voice in plan matters.
A retirement planning paradigm that specifically excludes the very individuals whose money is at risk makes no sense. It’s time for a change. While few participants or stakeholders can afford to hire a nationally-recognized investment expert on their own, through crowd-funding using our proprietary forensic protocol, participant or stakeholder dollars can be combined to fund a high-impact independent review at a far lower cost than even an employer would pay. We know it can be done because over the past 30 years we've reviewed over $1 trillion in assets.
The findings of this forensic investigation will be published in Forbes and made available to the public, as well as federal regulators. Of course, you don’t have to be a state worker or participant to contribute to this investigation. The identities of the crowdfunding donors are confidential.”
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Siedle said that a new investigation would be similar to those he has conducted in the past — and pointed to recent success in investigations in Ohio.
“The investigations I’ve been doing in Ohio have had results — they had their COLA reinstated for a year, so that’s money in their pockets,” said Siedle of retirees there. “The state auditor did an investigation in Ohio, and I have the former AG as my legal counsel — he’s the first state auditor to do so.”
Siedle said now, more members of the retirement board in Ohio support his findings — which include calls for greater transparency — and said currently, there’s “momentum” at the SEC to improve transparency in private equity.
“[Retirees were told their] COLA had to be cut to make the pension more sustainable. How much was saved by cutting the COLA?” said Siedle. “If it was $30 million and you increased fees to $180 million, the COLA could have been paid all along.”