AARP AARP States Rhode Island Advocacy

Message to Smith Hill: Do the Right Thing

RI State House

AARP Rhode Island today sent letters to Gov. Gina Raimondo and the leaders of the House and Senate, urging that the state's $14.2 million revenue surplus be deposited in the state pension fund -- as mandated by law. An article in the proposed 2016 state budget would, instead, transfer the surplus to the general fund. In addition to the letters to Raimondo, Senate President M. Teresa Paiva Weed and House Speaker Nicholas Mattiello, AARP drafted testimony to present to the Senate Finance committee opposing to the move. Below is the text of the letter to the governor.

 

Hon. Gina M. Raimondo
Governor
State of Rhode Island
82 Smith St.
Providence, RI 02903

Dear Governor,

AARP Rhode Island is writing to respectfully urge you to reconsider your proposal to forgo the State of Rhode Island's obligation to deposit the $14.2 million state revenue surplus into the state pension fund as a means of balancing the FY2016 state budget.

While we understand the difficulties you face, this is an unsuitable solution.

Your repetitive argument in favor of pension reform legislation passed in 2011 was that the measure was a one-time fix of a system that was dangerously underfunded. We heard again and again that "kicking the can down the road" must now and forever cease. Here we are, four years later and you are asking Assembly leaders to revert to kicking that same can as a convenient means of solving the latest budget dilemma.

Just a year ago, we remind you, you opposed Governor Lincoln Chafee’s proposal to withhold payment of the surplus.

In 2011, lawmakers apologetically told retirees that their promised retirement benefits would be reduced so that the state could put its house in order once and for all. The suspension of annual cost-of-living adjustments for as long as 19 years was presented as a necessary and unavoidable sacrifice that would ensure the pension fund's future and spare the state from financial calamity. There was no alternative -- no flexibility as far as reducing the burden of reform thrust on retirees. Without pension reform, the money simply won't be there, retirees and everyone else in the state were emphatically warned.

What we can say for sure is that $14.2 million and any interest it might have earned won't be there for retirees if you proceed with your plan to repeal the portion of the state law mandating that the surplus be deposited into the pension fund. Also, failure to make this statutory payment will impede timely achievement of the pension funding goal and the restoration of cost of living adjustments.

Not complying with the provisions of the Pension Reform Law would represent another broken promise to retirees. Is there no moral obligation to fulfill a covenant with retirees that, in effect, said "you must accept these conditions, just as the State of Rhode Island will obey the terms set down by law and uphold its end of the deal"?

Throughout the pension debate we heard over and over that the retirees put their contributions into the fund as required but, the state and municipalities often failed to make their payments. The current strategy looks like more of the same.

Your plan is wrong in many ways and its consequences could further negatively impact the retirement security of employees who did their jobs, made the pension payments they were obligated to make and planned their retirement based on the pension benefits they were promised.

Therefore, AARP requests that you do the right thing and fulfill your responsibility to deposit the revenue surplus into the state pension fund.

Sincerely,

Kathleen S. Connell
State Director
AARP Rhode Island

Alan B. Neville
State President
AARP Rhode Island

 

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