RI pension reform is on everyone’s mind and the demand seems to be to do it quickly.
This summer a RI Pension Advisory Group was established to examine options to ensure long-term sustainability of the state’s pension system. Unfortunately, and most importantly, the people most affected were left out of the process --- the retirees.
The Advisory Group acted alone and did not allow public input at the meetings it held. With the upcoming legislative session just weeks away, one suggestion that has surfaced is to suspend the cost of living allowance adjustment (COLA) for retirees for the next 15 years.
Because approximately 50% of Rhode Island public employees are not covered by Social Security, the COLA is an essential part of their retirement security. It assures that their purchasing power is not eroded by inflation. COLAs are an essential characteristic of many retirement plans, including those of the federal government. They provide a sensible means of keeping up with rising prices and should not be considered as undeserved handouts.
Pension system reform should not eliminate the COLA that so many retirees depend upon. COLAs are necessary to maintain the purchasing power of retirees --- retirees who, according to the Institute of Retirement Security, spend $874 million in RI each year and also pay $141 million in federal, state and local taxes.
As the Rhode Island Legislature looks to reform the pension system we need to move together to find a solution that is equitable. The governor, the treasurer, the legislature and all of us need to remember it’s not just about the numbers --- it’s about retirees and their need for financial security.
Retired Newport teacher
President, AARP Newport