The Rhode Island pension debate: Truth is in short supply
By Tim Murphy
Published on Thursday, November 17th, 2011 at 12:01 a.m.
As the debate over Rhode Island’s pension crisis intensified in recent months, PolitiFact Rhode Island was paying close attention to what public figures were saying about it. More often than not, we found misstatements, misinterpretations and outright falsehoods.
We examined 11 statements related to pensions, dating to August 2010. The Truth-O-Meter scorecard: one True, one Mostly True, two Half True, three Mostly Falses and four Falses.
As a service for readers –– and the legislators who will vote on the pension overhaul legislation Thursday –– we’ve assembled all our pension-related rulings. Here’s what you need to know about COLAs, hybrid plans, annuity charts, life expectancy and more.
We started in 2010, when Kernan "Kerry" King, running for lieutenant governor, said there were 150 different pension plans in the smallest state in the union. We found at least 148, close enough for a True.
The following March, James Cenerini, a lobbyist for Council 94 of the American Federation of State, Council & Municipal Employees, said Rhode Island’s state pension systems are not
"gold-plated," they’re average or below average.
Comparing Rhode Island’s plan with others around the country, we found our system was more generous in some ways, less generous in others. In other words, Half True.
General Treasurer Gina Raimondo, who has led the push for a pension overhaul, advocated for a new hybrid retirement plan, combining a traditional pension with a 401(k) plan. She said the average 60-year-old with a 401(k) has under $100,000. We had some quibbles about her figures, but on balance, found her statement Mostly True.
Talk-show host Helen Glover said Rhode Island has the worst-funded pension system in the country. This dubious distinction is a little tricky to pin down because, as states make changes, their relative rankings change. We found that Rhode Island’s plan was among the worst-funded in the country, but not the worst, ruling her claim Mostly False.
Robert Barber, a retired Cranston police captain, said the retirement age shouldn’t be raised for law enforcement officers because statistically, "they die 10 years earlier than the general population."
While this is a common assumption, we found the evidence showed little difference between their life expectancy and that of the general population and ruled it False.
Stephen Lisauskas, a pension consultant and advisor in the Central Falls bankruptcy case, said 37 percent of that city’s police officers and firefighters are on disability pensions, compared with a national average of 5 percent.
But we found problems with both figures he cited and ruled the statement False.
The Rhode Island Retirement Security Coalition, whose members are public employee unions, posted a YouTube video "tutorial" on the pension problem. A speaker in the video said that in the past six years, "changes to the pension formula . . . have saved the state over half a billion dollars."
But those were savings projected to accrue over the lifetime of the beneficiaries -- not money already saved -- so we ruled the claim Mostly False.
George Nee, president of the Rhode Island AFL-CIO, said the pension overhaul legislation would mark the first time in Rhode Island -- and one of the first times in the country -- that benefits were reduced for workers already retired.
We found that he was right on the first part, but not on the second -- at least seven states have already cut cost-of-living raises for retirees. Enough for a Half True ruling.
Governor Lincoln Chafee made a similar "first-time" claim when he said Rhode Island would be the first state to adopt a hybrid pension/401(k) plan. But we found that at least seven other states had such plans, ruling his statement False.
Paul Valletta, president of the Cranston firefighters union, said General Treasurer Raimondo "cooked the books" to make a case for the pension overhaul. We examined one of his claims, that she raised the mortality rate from 65 to 87, and used a 1994 annuity chart in the process.
But when we dug for the facts, we found that the projected mortality rates were increased by not more than 1.1 years, depending on the gender and the type of employee, and the 1994 chart played only a small part in the overall calculation. Mostly False.
Kathleen Connell, former secretary of state and head of the Rhode Island chapter of the AARP, said in testimony before the House and Senate Finance Committees that 60 percent of state retirees don’t get Social Security. After a lot of digging and a lot of math, we calculate the real figure was about 22 percent and ruled the claim False.
And finally, David Mellon, president of Rhode Island Brotherhood of Correctional Officers, had another variation of the life expectancy claim, saying a Metropolitan Life study showed correctional officers life expectancy is 58 years.
We spent two weeks looking for the study -- even Metropolitan Life couldn’t find it. And we also found evidence that contradicted the life expectancy claim, ruling it False.
We’d like to say that, after all this work on pensions, we’re ready to retire. But with the campaign season looming, and the General Assembly starting in a new session in January, there’s just no time to take it easy.
Researchers: Tim Murphy
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