Treasurer Gina Raimondo’s office has acknowledged another error in its Oct. 24 testimony to the joint finance committee about the pension bill.
An explanation of how the legislation would impact a hypothetical retiree miscalculated his pension benefit under current law because it failed to account for changes lawmakers made to the system starting in 2005, Deputy Treasurer Mark Dingley said in response to inquiries from WPRI.com.
“There was a mistake made,” Dingley said on Tuesday. The treasurer’s office has also rewritten a section of the bill that assumed state troopers receive Social Security benefits after WPRI.com reported that they do not.
The new mistake is on page 10 [pdf]. The treasurer’s office told lawmakers “Joe Smith,” a teacher with 28 years of service who is 57 years old, will earn a pension benefit equal to 59.25% of his final average salary as of June 30, 2012. The correct figure is 57.75%, because the General Assembly reduced the amount workers accrue each year.
Therefore, if the Raimondo-Chafee bill passes, Joe Smith’s final defined-benefit pension accrual when he reaches age 62 would be 62.75%, not the treasurer’s figure of 64.25%, and his pension if he retires at 62 would be $49,949, not $51,143, under the first of three transition rules for current workers set out in the bill.
The figures given for Joe Smith’s pension benefit under the other two options are also too high because of the error. A corrected version of the calculations will be given to the joint finance committee at Wednesday’s hearing, Raimondo spokeswoman Joy Fox said. The two panels are expected to vote to approve the bill on Thursday.
The mistake was flagged by Anthony DiGioia, a retired assistant U.S. attorney for Rhode Island, who was skeptical about some of the treasurer’s claims and shared his findings with WPRI.com. “I spent 30 years trying cases – I tell people I was in the suspicion business,” he said.
DiGioia said he’s been dismayed by the way the pension debate in Rhode Island has played out this year. “I can’t help but see this as yet another example of how the well-to-do have gotten the poor yelling at the poor while they’re not yelling at the rich, and so that’s a big part of my interest,” he said.
In response to another question about the bill, Dingley said workers who retire at an earlier age with an actuarially reduced pension can include the smaller defined-benefit they would earn after June 30, 2012, when it gets calculated. There is no actuarial reduction for retirees who take only the benefit they earned up to that date. Retirees can keep the amount in their defined-contribution account under all scenarios.
(photo: Ted Nesi/WPRI)