Rhode Island’s “Landmark” Pension Reform Still Leaves State Pension System in “Critical Status” By State’s Own Standard

The proposed “settlement” of Rhode Island’s 2011 pension reform law (has anyone explained yet how a law can be mediated?) is currently in the hands of rank and file union members. If they give the green light (has anyone explained yet how a non-ballot can equal a “yes” vote?), it goes to the General Assembly for consideration.

But let’s go back to the 2011 pension reform itself. First, look at this three page PDF, compiled by the state of Rhode Island, which lists “Locally Administered Pension Plans in Critical Status”; i.e., municipal pension systems. See the note in the box on the bottom left of each page? It says:

Funded status: The actuarial value of assets over the actuarial accrued liabilities. A ratio of less than 60% is deemed “critical status” per RIGL 45-65-4.

Now, the 2011 pension reform boosted the state’s pension systems to 57% funded. That’s right. All of the objections and litigation on one side and the national huzzahs – which continue to come in as recently as yesterday – and pump-fists on the other and the bottom line is that Rhode Island’s “landmark” pension reform only boosts the system to 57% funded. (The “settlement” would reduce that to 56% funded.)

If less than 60% funded is critical status for local pension systems, doesn’t that place Rhode Island’s pension system in “critical status”? If so, how does the 2011 pension reform represent a substantive achievement in terms of … well, reform?

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