Are you confused about Rhode Island’s pension problem? Then you may want to watch the Pensions 101 video put together by the Rhode Island Retirement Security Coalition.
Before steam starts streaming out of some readers’ ears – yes, the organization is a union-backed pressure group organized to try and prevent the General Assembly from reducing the value of promised pensions during next month’s special session, and the video reflects that.
Still, I finally got around to watching their 10-minute video Tuesday afternoon, and I recommend the first half to anyone who wants a basic primer on the pension issue, regardless of their preferred solution. It does a good job explaining the centrality of the unfunded liability, for example. And considering how difficult the problem is to explain, it’s always worth highlighting a decent attempt.
Around the 5:30 mark, the video switches to advocacy – lambasting the idea of cutting pensions and calling on workers to contact officials and express their opposition to benefit changes. You can decide whether you want to watch that part.
One thing to be aware of throughout the pension discussion is the distinction between people paying into the post-2005 pension system – who are covering most of the cost of their future benefits with their own contributions – and those who came before them, including current retirees.
“We are now placing many of our workers at risk of losing their dignified retirement,” the video’s host says at one point. “Considering that today’s employees pay almost all of their own pension benefits through the contributions they make as a percentage of their pay, this is unconscionable.”
But that statement just reemphasizes why the unfunded liability is such a thorny problem – it’s the cost of benefits promised long ago, often to retirees who are no longer working and paying into the pension system. It will be interesting to see whether a split emerges between retirees and current workers next month.
Here’s the video:
As an aside, I asked on Twitter if anyone knew the identity of the woman in the video. A wise correspondent wrote in to tell me she is Kate Lohman, a local actress whose IMDB profile includes a number of movies and TV shows filmed here: “Brotherhood,” “Underdog,” “Outside Providence.” Perhaps the Screen Actors Guild loaned her to its brother unions.