Chafee Joins Christie as Rhode Island Seeks Pension Cuts

[The Northerner]

Oct. 18 (Bloomberg) -- Rhode Island Governor Lincoln Chafee, who left the Republican Party last year to run as an independent, is joining New Jersey Governor Chris Christie in seeking to roll back benefits promised to government retirees.

Chafee, 58, elected in November after he lost a U.S. Senate seat in 2006, wants to overhaul the state's $7.4 billion pension because it has only about half the assets needed over the coming decades, according to state data. The governor is working on the proposal with Treasurer Gina Raimondo, a Democrat elected last year who has advocated for suspending cost-of-living increases and combining the defined benefits workers get with a 401(k)- style investing option.

"The main thing is getting the economy going, getting people back to work, getting down our unemployment levels," Chafee said in an Oct. 12 interview in his Providence office. "And any time there's a shadow over our efforts to accomplish that lowering of our unemployment, and getting our economy going, they need to be addressed. One of those shadows is the unfunded liability of our pensions."

Rhode Island would join states from New Jersey to South Dakota that, since the financial crisis undercut public pension funding, are trying to lower expenses by suspending or rolling back annual cost-of-living increases promised to retirees. The number grew to at least seven since courts in Colorado and Minnesota rejected union claims that such changes illegally break contracts, according to Stephen Fehr, a researcher at the Pew Center on the States, a nonprofit group in Washington.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/10/18/bloomberg_articlesLT9P916S972K.DTL

[rfranklin]

1. Exactly how is that going to make more jobs?

What utter bullshit!

[spartan61]

2. If RI and NJ state pensions are tied to the SS

COLA formula, then there have been no raises for a couple of years. How would suspending annual cost of living increases lower expenses when there have been no raises? I'm a retired teacher from Connecticut and we teachers don't get SS. Our COLA is dependent on the SS COLA so we haven't had a raise in two years. BTW, we also pay $115.40 for our Medicare because "the gov't can't take our Medicare payments from our SS checks." How is that fair?