A veteran union activist traveled to Washington on Thursday to slam Treasurer Gina Raimondo and other Rhode Island leaders for taking away the annual cost-of-living adjustment to her pension.
“I’m angry. Yes, I am angry,” Dolores Bresette, a 37-year state employee who is now retired, said during a panel with other officials and economist Dean Baker at the National Press Club. “I’m angry that something like this could happen after I worked all of these years and planned for my future.”
Bresette retired on Sept. 27, 2008, and received $2,305.54 a month as of June 30, records show. “My pension is my life savings,” she said. “The politicians in Rhode Island simply took it from me. On the news, I saw them celebrating. It’s upsetting that they could do this to us. They don’t see us as people. They see us as a number.”
North Carolina Treasurer Janet Cowell, who spoke before Bresette, countered that her state does not grant automatic COLAs and sets its pension fund’s investment return forecast at 7.25%, still lower than Rhode Island’s revised 7.5%. North Carolina has made its full pension contribution in 69 of the past 70 years, Cowell said.
“We have these conservative assumptions and decisions,” she said. “We’ve also just met our obligations.”
Rhode Island’s new pension law suspends COLAs until the state system is 80% funded, although interim increases may be granted every five years; before lawmakers began changing the system in 2005, 3% COLAs were automatically given annually.
Baker – who last year called Raimondo’s proposal for Rhode Island “fairly harsh” – argued the nation’s real problem is a private-sector retirement crisis, as most baby boomers approach the end of their working lives with limited assets to sustain them as they age.
As for public pensions, Baker called North Carolina’s 7.25% return forecast “very conservative” considering the current price-to-earnings ratio in the stock market is about 13 or 14. By contrast, he said, most states should have been below 8% back in 2000 when the price earnings ratio topped 30.
“If we assume long-term economic growth projections are right, you’re really hard-pressed to believe you won’t get something close to 8%,” Baker said, presenting his side of a heated debate nationally. While a few states have “cases of mismanagement,” most public pension shortfalls “are manageable,” he said.
Bresette recalled seeing Raimondo at the State House last year and telling her, “I’m very disappointed in you.”
“I told her she’s trying to take my future away from me – I planned for this, and now you want to take the cost-of-living away,” Bresette said. “Inflation is going to go up. How am I going to be able to afford the necessities of life? The food, the bread, the gasoline and so forth?”
Raimondo “turned around and said, ‘I’m sorry,'” Bresette said. “I said, ‘You may be sorry, but that just does not help me. That will not help my future that is here today.’ I did my part, but Rhode Island politicians failed to do theirs.”