Question of the Day:

What happened to a Fred Thompson announcement the week of July 4th?

Underfunded state pension system cuts deep in taxpayers wallet

 A recent article in the Providence Journal discusses pension costs rising 14% within in the next year. This prospect should be highly disturbing not only to future recipients of this under funded system, but also to the taxpayers who will be burdened by this increase.

Furthermore, this system will only spiral out of control as the teachers under contract and the 10,186 state employees continue to retire and draw on these accounts.

Consider the fact that within the next 5 years, 28.3% of state employees and within the next 10 years, 41.3% of state employees will be eligible to retire as evidence of this perpetual, failing system.  Consider also that these figures do not include the portion of teachers drawing from the same pension system who are also expected to retire within that same time frame.  

The numbers don’t add up. There simply is not enough money to sustain this system.

The article additionally notes that, since 1999, the article sites that the taxpayer’s portion has increased from 9.95% to 25.03% while employees are only contributing 8.75% – 9.5%. Nearly $100 million of taxpayer money is going toward financing this highly unionized, under funded pension plan.

State officials claim that the failing stock market for 2001-2003 is a major contributing factor to this problem. I argue that in reality, it’s the fact that we have more people than necessary drawing from this system.  In other words, there are too many state employees.

Currently, the state uses a “defined benefit” system.  As baby boomers grow older and begin to retire, it is clear that “defined benefit” systems don’t work. Steps need to be taken to move toward a “defined contribution” system that will force these employees to take responsibility for their own retirement so that it is not a liability to the taxpayers of Rhode Island. This is not something with which we need to be burdened.  

This will allow these employees to take responsibility for their own retirement so that it is not a liability to the taxpayers of Rhode Island. If I were an employee of this system, I would be petrified that I would not have a pension upon retirement.  This is not something with which the taxpayers need to be burdened.

I urge the governor and the general assembly to look for ways to privatize many of these state services and privatize the pension plans.  America is built on personal responsibility and the success of the individual. It’s time for the State of Rhode Island to look for ways to return to those ideals so that the hardworking taxpayers of this state do not have to continue to sustain a failing system, and to ensure that these beneficiaries can have a secure retirement.