NEW: Freezing COLAs is Only One Step to Local Pension Reform, Group Says
GoLocalProv News Team
NEW: Freezing COLAs is Only One Step to Local Pension Reform, Group Says
The well-financed pension reform group that pushed local lawmakers to enact statewide pension reform last fall is encouraging municipalities to take a similar approach as they attempt to address their unfunded liabilities.
“EngageRI supports the efforts of cities and towns to implement comprehensive pension reform. It is clear that suspending cost-of-living increases is essential to ensuring the long-term viability of pension funds, but it is only one step and may not be appropriate for every municipality.
“We encourage the cities and towns to take the same approach to pension reform as the state did when implementing RIRSA, by doing the number-crunching and the legal work to design a plan for comprehensive and sustainable reform. Most importantly, they must follow the law as defined by RIRSA. The first step is the experience study that was due to the Department of Administration on April 1, and then those with critical status must create a plan for implementing reform as outlined in the legislation. Stop-gap measures and changing benefits for only select groups will not work. Comprehensive pension reform must address benefit levels, benefit structure, risk sharing and adjust – or freeze – COLAs.
“Without comprehensive reform, we are likely to see more Rhode Island municipalities fall into bankruptcy. Most importantly, comprehensive municipal pension reform could provide retirement security for employees and retirees, stabilize the property tax rate for taxpayers, and allow us to invest more funds for schools and social services.”