Rhode Island Pension Cuts Set Chilling Precedents | Labor Notes: "While Rhode Island teachers had always paid into the fund at rates of 9.5 percent of income, and state workers at 8.75 percent, the same was not true of the state. Rhode Island had raided the fund in the 1990s and never made up the difference.
Further problems came with Republican Governor Donald Carcieri in the 2000s. He cut state agency staffing levels and forced state workers into retirement early, thus reducing the base of workers paying into the fund.
The real tipping point came in April 2011, when the state Retirement Board voted to lower the projected rate of return on investment from 8.25 percent to 7.5 percent. By one change in accounting, the board suddenly increased the unfunded liability by $1.4 million and doubled the burden on state agencies and local school districts.
Said pension policy analyst Tom Sgouros, “It’s the triumph of the technocrats who make tremendously value-laden judgments and disguise it as technical details.”
The now-inevitable move to cut benefits sped forward in August, when the city of Central Falls went bankrupt and retirees there saw their pensions cut in half."
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