State retirees make their case: Many won't live to see COLA boosts when they resume in 2031

PROVIDENCE – "I was a little upset being referred to as the 'walking dead,'" 77-year-old retired Cranston special-education teacher Sandra Paquette said when she finally got her turn at the microphone.

It was a running theme at the State House on Tuesday night as one speaker after another looked ahead to how many in the Senate hearing room would be dead by the time the state resumes regular payment of the suspended cost-of-living adjustments – aka COLAs – that Rhode Island's public employees were promised when they retired.

Retired state budget analyst Brian Kennedy apologized to the senators for not bringing cute kids to elicit the same kinds of nods and smiles that earlier speakers received when they spoke about legislation that would boost child-care worker salaries that was moved from last on the night's agenda up to being first on the docket.

"I wish I could show up here with 5-year-old kids and puppies," Kennedy said. "We've just got old people that are going to die," he said to titters from the audience.

"I can't do anything but say we are owed the money," Kennedy said. "After a while we'll be in our graves. Hey, hey. So much for him."

More on RI pensions: A decade after RI 'pension reform,' anger and suspicion still rule the conversation.

Why state retirees are making their case for COLAs

The anger and frustration in the Senate Finance Committee hearing room was palpable as the retirees made their case for the restoration of the COLAs – up to 3% compounded annually – suspended as part of then-Treasurer Gina Raimondo's 2011 effort to rein in the spiraling taxpayer costs of Rhode Island's public-employee pensions.

Under that cost-cutting pension, referred to by one pensioner as the "Gina Raimondo Theft Act of 2011," annual COLAs will return when the state pension fund had enough money on hand to pay 80% of its projected current and future pension obligations.

The projected return date? 2031.

In the interim, the retirees have seen small bumps at four-year intervals, including .74% in 2017. In 2021, they received 1.06% on the first $33,130 of their pension if they retired before July 1, 2015, and on the first $27,608 if they retired after.

Given the average age of today's retired public school teachers, state employees and municipal employees – early to mid-70's – retired state labor-relations administrator John Breguet called the 2031 promise to pre-2012 retirees "an illusory sham."

"The 72.2 years old retiree [in 2011] is now 84 years old. If male, he has a life expectancy of 6.21 years, and 7.43 if female. [The state] asks these individuals to wait another 9 years. The individuals already have waited 11.

"In other words, we, the pre-2012 retirees, certainly will almost all be dead when COLAs supposedly will return," he said.

What options are on the table?

The hearing centered on a package of retiree relief bills, including one sponsored by Sen. Frank Ciccone, a one-time business agent for the laborer's union, to reinstate annual COLA payments to all pre-2012 retirees at whatever level they were receiving then. This was the retirees' preferred bill.

Others, including one introduced at the request of new state Treasurer James Diossa, would give the retirees a one-time $500 stipend instead – at a projected cost to the state treasury of $15 million – instead of a permanent increase in their base pension amount.

"Currently, the pension system is just about 60% funded," Diossa told the senators. "That means the system's total assets are just about 60% of its total liabilities. Further, our system is still cash-flow negative, which means the system pays more in benefits than it receives in contributions on an annual basis."

Any restoration of suspended benefits "will prolong the forecasted 2031 COLA return, increase our unfunded liability by even more and become a financial burden on taxpayers," he warned the senators.

Noting that a $500 payment amounts to $9.60 a week, more than one retiree asked, why bother?

Kennedy said legislative budget writers would do more good taking the projected $35-million cost of the small reduction Gov. Dan McKee has proposed in the sales tax, from 7% to 6.85%, and giving it to the retirees instead.

"The state has sufficient funds to grant large pay raises to current employees, sufficient funds to propose free tuition for Rhode Island residents," retiree Tina Rosa wrote the lawmakers.

"Given the more than $600-million budget surplus currently,'' retiree coalition chairman Roger Boudreau argued, "A fractional percentage of that surplus should rightly be dedicated to those who've given their careers in service to the public."

Paquette said she waited hours for her turn to speak for one reason: "To give a face to the retirees."

"Who are we? We are everybody. We are your relatives. We're your in-laws, your colleagues, your friends. We're the people who sit behind you in church, maybe are in your temple, or the people you stand in line with at the supermarkets.

"We are just regular every day people. Unfortunately ... many of us are now residents of long-term care or we are names carved into gravestones. So that is the face that you're looking at. What happened in 2011, as everyone knows, was tremendously unfair and thousands of us suddenly became collateral damage."

The bills were held for further study.

This article originally appeared on The Providence Journal: Changes to RI state pensions and COLA restoration up in RI General Assembly