Are pension COLAs happening for municipal retirees? Treasurer candidates spar over answer

  • In Business
  • 2022-09-22 22:17:15Z
  • By The Providence Journal

James L. Lathrop, the Republican candidate for state general treasurer in the Nov. 8 election, has come under fire for a news release this week criticizing the state for, he said, not paying cost-of-living-adjustments (COLAs) to certain municipal government retirees because the state pension system is not adequately funded.

State law bars the treasurer from paying the adjustments, commonly called COLAs, when a pension fund's funding level is below 80%.

Lathrop noted that the state's overall funding level was at 71% in a recent audit, but municipal general employee and police-fire plans are more than 90% funded.

"The State is denying City and Town employees the COLA's they deserve, because of their failures," Lathrop said in his news release. "This must change. The Treasure must be able understand data and how it relates to people and operations.

RI Statehouse 1
RI Statehouse 1  

But Lathrop's Democratic opponent, James A. Diossa, as well as a spokesman for current-General Treasurer Seth Magaziner, said that Lathrop didn't understand the data in this situation.

While state employees do not qualify for COLAs because of the funding level of the state plans, each municipal plan is considered separately.

Sixty-four of the municipal plans paid COLAs for the fiscal year that ended June 30, according to Benjamin Smith, of the treasurer's office.

"I'll have to check to see if that's correct," Lathrop told The Providence Journal Thursday in a phone interview.

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Earlier Thursday, Diossa issued a statement reacting to the comments from Lathrop, the finance director for the town of North Kingstown, after holding similar positions in other Rhode Island communities.

"Had my opponent taken the time to review state law - or if he had understood the basic structure of the state pension system - he would have known that statutes already provide a cost-of-living adjustment for municipal plans within the MERS system once they reach 80% funding," Diossa said. "Moreover, my opponent has worked for several of the municipalities within MERS which received a COLA this year."

Lathrop declined to address Diossa's comments directly until he had seen them, but did say, "I believe we need to do more to bring COLAs back for the people who served our communities and our state."

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The suspension of COLAs was part of the pension overhaul ushered in by then-General Treasurer Gina M. Raimondo to dramatically reduce pensions costs that were growing faster than government's ability to pay for them.

The state operates three retirement systems for state employees: one for retired judges, one for state police retirees and one for nearly all other state retires. The state also operates a plan known as the Municipal Employees Retirement System for city and town retirees whose work units joined that system, called MERS. Not all municipal retirees are part of MERS, some municipal agencies operate their own pension plans.

This article originally appeared on The Providence Journal: Rhode Island treasurer candidates spar over municipal pension COLAs


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