March 9, 2009
Pension Problem Based on More than Slight Undersight
The talking point of local unionists and ostriches is that our pension system is in trouble because a few years of low contributions in the '90s threw everything off, and all we have to do is to maintain funding for just a couple of decades, and the whole thing will work itself out right. That diagnosis is wrong, according to a panel convened by the General Assembly:
Even if the stock market rebounds next year, the cost to Rhode Island taxpayers of providing some of the most generous public employee pensions in the region will shoot from $370.9 million this year to a projected $836.3 million by the year 2017. ...... [Chief of Staff for the General Treasurer Mark] Dingley said the state is paying today for past mistakes, including decades of unfunded benefit increases, inaccurate actuarial assumptions, and earnings that have failed, over the last decade, to meet the 8.25 percent assumed rate of return on investments.
Despite union arguments to the contrary, he produced a letter from the actuaries that said the deferral of state contributions in the early 1990s has played a relatively small part. Had there been no deferral, it said, the state's required contribution this year would be 20.53 percent of payroll, instead of 21.13 percent.
Just another bomb waiting to go off in Rhode Island, with a fuse that nobody's willing to stamp out.
What a shame. One of the cornerstones of Bob Walsh's campaign for Governor just got flushed down the toilet.
Posted by: john at March 9, 2009 8:55 AM"Even if the stock market rebounds next year, the cost to Rhode Island taxpayers of providing some of the most generous public employee pensions in the region will shoot from $370.9 million this year to a projected $836.3 million by the year 2017"
The key phrase in the paragraph is "Even if the stock market rebounds next year". Given the no-growth, anti-investment policies of Obama/Pelosi there is no chance of the markets rebounding anytime soon, much less "next year". Given that, will be 2017 cost be $1.2 billion, $1.5 billion or what?
Equities are down 56% over the last 18 months-just a "little" off the pollyanish assumption of ad infinitum 8.5% annual growth-the foundation of sand upon which the RI public employee pension system is based.
Once again-great job progressives!
RI DESERVES THE WORST
LIZ ROBERTS FOR GOVERNOR
This is just too funny. In the face of overwhelming evidence that these pensions cannot be sustained, the union pigs just keep on harping on the same tired senseless ideas.
Well guess what pigs - the system is going to fail. Period. Do the numbers, morons, because your pig leaders are lying to you. It simply cannot be sustained. Sustaining it will require overly burdening those who do not draw on it to pay up even more. That will force more of them to leave this state, creating the infamous "negative feedback loop" where fewer will be available to pay up for a bigger share, hastening the demise of the entire scheme, as those few remaining leave in faster fashion.
Don't believe me? Just watch. And believe me, I will be there laughing my ass off saying one thing - I told you so, pigs.
Don't believe me? Just watch. And believe me, I will be there laughing my ass off saying one thing - I told you so, pigs.
Posted by Mike Cappelli at March 9, 2009 12:40 PM
HA-I hope to be right beside you laughing.
The pyramid scam that is the RI Pension system (both state and municipal) is indeed collapsing like a house of cards.
RI DESERVES THE WORST
LIZ ROBERTS FOR GOVERNOR