Tuesday, November 1, 2011

Is Rhode Island being lied to about pensions II?

OK: The title says it all. We continue to learn about more lies to Rhode Island regarding the proposed pension changes of Governor Chafee and General Treasurer, Gina Raimondo. This article follows a previous article posted on October 4, 2011 in this blog.

First and foremost, we now learn that the General Treasurer is using 87.6 years as the projected life expectancy of the average retiree. No wonder why she says that the state contribution to the pension has to increase to 35% of salary. How truly foolish is this? The U.S. government says the age should be 78 years. (I'm not linking a source because I read this in the Providence Journal and I do not want people to migrate to that site to make more money for that rag). I just attended a Bar Mitzvah where the oldest person was 85. She was frail and had trouble walking because of a previous stroke. While we all know some people that make it past 87.6 years, start counting all of the people you know that did not make it to that age.

Here is another lie to confuse the issue, courtesy of the Providence Journal. A recent article listed "myths" surrounding the pension system. One myth that they tried to tackle involves issues surrounding the state's required contributions. The Journal clearly states that this issue is simply not true, the state made all of its contributions except for some $60 million in payouts to rescue the wealthy in this state during the banking crisis (they didn't say the "wealthy" - I did because our Governor chose to meet all obligations in bank accounts that exceeded $100,000). Your public employees paid for your bailout.

Here is the rub! Even the General Treasurer has the intelligence to say the following: "The state made contributions "as required by law" (note the quotation marks). When I was working budgets, I was livid when Governor DiPrete tapped into the pension contribution for the first time. I remember seeing half of the state's contribution disappear. This trickery continued during the Sundlun administration and yes, they cooked the books to please the legislature. Gina Raimondo is right when she says that unrealistic numbers were used to justify the state's robbery of its pension accounts. The robbery continued. Don't tell me that the state always made it's contribution. When union bosses have robbed the pension accounts of its members, people go to jail. Nobody in this country has been jailed for pulling corporate pension funds or public pension funds. The Journal rag is lying to everyone when it refuses to make this point perfectly clear. The Providence Journal was absent from these facts at a time when it needed to let the public know. We all know that the Journal wanted to be absent because they never liked public pensions because it makes their newspaper operation look cheap in their worker's eyes. The state did not meet it's pension contribution for over 2 decades. The employees made every contribution and also took a 20% pay cut to bailout the banks. We bailed out the banks with our pensions and our salaries. Thank you very much!

Additionally, the $60 million that the Journal seems to brush aside today would be approximately $232 million out of the projected $7 billion shortfall that Raimondo is claiming because we are all going to live to be 87.6 years of age. Yea!


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