"We do need to move swiftly and decisively, but … it is more important that we get this right," Raimondo said at a news conference unveiling the report.

Raimondo said she will advise Gov. Lincoln Chafee, who praised Raimondo at Monday's press conference, and Rhode Island's General Assembly on a pension system overhaul. Rhode Island law requires that any changes to the system be made through legislation, she said.

House Speaker Gordon Fox, D-Providence, and Senate President M. Teresa Paiva Weed, D-Newport, commended Raimondo in a joint statement and said they planned to work with Chafee, Raimondo "and all stakeholders to ensure we have a healthy pension system that is fair to employees and affordable to taxpayers."

Patrick Crowley, assistant executive director for the Rhode Island chapter of the National Education Association, said the treasurer's report is laudable for leaving room about how specifically to proceed. Crowley added, however, that solutions other than cutting benefits should be considered, such as raising taxes on the wealthy and allowing the pension funds to profit from lottery and other gambling proceeds.

Monday's report suggested that any changes should create a pension system that takes in enough to cover 80 percent or more of what it pays out within the next 10 years.

The state's current unfunded pension liability may be as high as $9 billion, a figure reached by using private-sector pension accounting rules. Public accounting rules show that liability to be $6.8 billion. Raimondo's report cites a Boston College study that suggests Rhode Island's pension fund, on its current trajectory, could run out of assets by sometime between 2019 and 2023.

The report also says an overhaul should also aim to free up state money so Rhode Island can invest taxpayer dollars in higher education and public transportation. It warns that the portion of every tax dollar required to support state pensions has risen from 3 cents in 2002 to 9 cents in 2009 and, without swift action, is projected to rise to 20 cents in 2018.

Decisions concerning the pension system's funding and benefits were largely driven by politics, rather than policy, from the 1960s through the 1990s, with officials promising more in retirement benefits than the state could afford, according to the report. Warnings from actuaries that the pension system was heading toward unsustainability appeared, the report says, as early as 1974.

Meanwhile, retirees are living longer, and returns on pension fund investments have been lower than expected during the last decade.

"It is unrealistic to believe that taxpayers can continue to support these ever-increasing required contributions and unfair to let current state employees and retirees believe that this is likely," the report says.

To avoid future problems, the report says, triggers should be put in place that, when funding drops below an as-yet unspecified acceptable level, would set in motion corrections to bring the pension system back in line. The treasurer's office declined to specify how these triggers might work.