PROVIDENCE, R.I. (AP) — In five years, the cost to taxpayers for Rhode Island's public retirement system will more than double if nothing is done to curb runaway pension costs.
That was one of several sobering facts that legislative aides presented to state lawmakers Wednesday as they began to work on overhauling the state's public retirement system. Next month the General Assembly plans to convene a special legislative session devoted to pensions.
For lawmakers, solving the complex pension puzzle raises legal, financial and political problems. Public-sector unions and taxpayer watchdog groups are watching the debate closely. The outcome is likely to touch off legal challenges and affect the state's financial health for years to come.
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"There needs to be retirement security, it needs to be affordable, and it needs to be sustainable," said Sen. Louis DiPalma, D-Middletown. "There are lots of dials we can turn here. What we have to do is make sure we're turning the right ones the right way."
Estimates put Rhode Island's unfunded liability for public workers' pensions at $7 billion, slightly less than the entire state budget for one year.
If nothing is done, the annual taxpayer contribution to the retirement plans of state workers and teachers is projected to grow from $319 million per year in 2011 to $765 million in 2015.
Additionally, the state now has more retired workers in the pension system than active workers contributing to it, exacerbating the problem.
Lawmakers now await an overhaul proposal from Gov. Lincoln Chafee and General Treasurer Gina Raimondo. Cuts to benefits, higher retirement ages and changes to the cost share between employees and the state are all on the table.
Rhode Island's teachers, emergency workers and state employees are closely watching the debate. Scores attended Wednesday's hearing. Sharon Wollschlager, a nurse in the state's health department for 25 years, said she earned the benefits that she now fears are in legislative crosshairs.
"They're going to force me to retire," Wollschlager told the Associated Press. "I don't want to leave, but I don't want to lose what I have now. I have a lot of knowledge that is going to walk out that door."
One lawmakers at Wednesday's hearing said the time for piecemeal changes to the retirement system is passed.
"We don't have a choice," said Rep. Laurence Ehrhardt, R-North Kingstown. "This is the most somber room full of colleagues I've ever seen in here. There's a realization that unless we do something this year, next year we're going to have to start sending checks that we can't afford."
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