Although he stopped short of promising to completely make whole the pensions of public sector workers who were targeted by then Treasurer, now Governor Gina Raimondo‘s signature pension cuts, Rhode Island gubernatorial candidate Matt Brown, who is challenging Raimondo in the Democratic primary, did pledge to “continue the conversation” with retirees about what can be done towards making them more secure financially and restoring at least some of what was taken from them.
About 100 people, mostly teachers, crowded into the WaterFire Arts Center in Providence Monday night to hear from Brown, along with Maribeth Calabro, President of the Providence Teachers Union, and Tom Sgouros, Policy Consultant and Researcher and a national expert in pensions.
“For teachers, cops, firefighters and state workers, a pension is a promise of financial security,” said Brown. “It was part of the deal — they paid in for years. Governor Raimondo broke that promise when she slashed pensions starting in 2011 as Treasurer. Where did the money go? To her hedge fund friends on Wall Street, who were paid massive fees.”
If elected, Matt Brown has pledged to fight for:
- Full transparency for investments of public money, including public release of current management contracts, investment fees, and the portfolio of investments;
- Accelerating disinvestment from risky Wall Street hedge funds and venture capital firms and moving the money back into stable, lower-fee, better-performing index funds;
- Using the savings from reduced investor fees and improved investment performance to restore the annual pension increases for current and future retirees.
About half of the two-hour event was Brown listening to the stories of people whose pensions were taken, whose lives are now approaching disaster due to the changes in their pensions. These people worked all their lives expecting their pension to be there for them upon retirement. Instead, their pensions were cut, their retirements delayed and their financial security undermined. Agreed upon COLAs, cost of living adjustments, are not set to resume for many years. As more than one person noted, they will not be eligible for a cost of living adjustment until after they die.
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Brown also criticized Raimondo for moving pension money into “expensive, high-risk hedge funds and venture capital firms.” These investments, said Brown, “have consistently underperformed, while hedge funds made more than $214 million in fees.”
Brown also notes that:
The Koch brothers-funded Manhattan Institute honored Raimondo with an award for her work dismantling Rhode Island’s pension system, and has featured her prominently in their promotional materials along with other pension slashers like Wisconsin Governor Scott Walker. Raimondo also pushed the pension cuts with help from EngageRI, a dark-money advocacy group that she supported even though it wouldn’t reveal its donors.
For two different views on Raimondo’s pension cut initiative, see:
Below is all the video from Brown’s campaign event, starting with introductions from Ron Knox:
Matt Brown is “working towards solutions,” said Maribeth Calabro, President of the Providence Teachers Union. “Viable, long-term solutions that will get us to restore, bit by bit, piece by piece, some of the stuff that was viciously and maliciously taken away us.”
“I want to thank the press,” said Brown, winning easy points with me. “I’m not sure I would normally think to thank the press, but when we see a President bash the press at his events, it really makes you think. We need to verbally, publicly recognize what the press does.”
Francesca read a letter from “a concerned citizen” to her legislators about the pension cuts that have made the lives of her parents financially perilous.
“I feel so devastated by not receiving the money I was promised,” said Mary, a retired state employee, who spent her whole career advocating to the best of her ability for the poor, the disenfranchised and the people who don’t get a break in society. “I would have made totally different decisions and career plans had I known anything like this was coming…”
“The system was becoming unaffordable,” said Adam Lupino, delivering a very different message. The system was on its way to being only 20 percent funded by 2018, “If Gina Raimondo hadn’t come in, rolled her sleeves up and did the hard work… Reforms saved the pension. Leaders saved the pension.”
When the people in the room objected to Lupino’s comments, Lupino hit back. “I ask for your respect,” said Lupino. He then compared Brown’s promise to restore some of the pensions to Trump’s promise to bring back coal.
The people in the room, made up mostly of those who lost big parts of their pensions under Raimondo’s hard work and are facing financial insecurity, felt insulted by Lupino’s remarks.
” I disagree 100 percent,” said a woman to Lupino. “We are struggling… We signed into a contract. We paid thousands of dollars for our pensions…”
Cities and the State did not pay their share of the pensions, said Marylin to Lupino, “and instead of paying for their own sins, they expected most us, who were forced to participate in the pension fund, to pay for them.”
When her husband died suddenly, leaving Marylin as the sole means of support for two minor children, she managed to squeak by. But now she is facing student loan debt for her children’s college tuition. That debt will be paid out off her social security or the remains of her pension, if Marylin cannot make the payments. She is being financially squeezed.
“That’s where Gina Raimondo has to be held accountable. We lost money in our pension systems because of fees…”
“Dunkin’ Donuts at $8 an hour is not what I was anticipating. I’m 70 years old,” said Jim.
“I retired in 2008,” said Pat, who started teaching in 1973. “And I got one COLA. That was it. I’ll never get another one. I’ll be dead by then.”
Struggling all her life, she worked hard to maximize her pension. That didn’t matter. “I moved in with my daughter and her husband… There’s nothing left. I’m short every single month.”
“Pension cuts led to what we’ve heard tonight, very painfully heard tonight,” said Brown. “It hurt people across the state.” Brown sees the pension cuts as the beginning of a series of cuts Raimondo has made that hurt people, such as cuts to Medicaid and the Department of Human Services. “We’ve got to see this as a bigger picture – of this system that [Raimondo] is so entrenched in.”
Tom Sgouros is a part of the research faculty at Brown University and a senior researcher for the Haas Institute for a Fair and Inclusive Society. His work focuses on the intersections of public finance, economics, and public policy. Sgouros wrote a critique of full pension funding, Funding Public Pensions: Is full pension funding a misguided goal?
In his work Sgouros makes the legal, chronological, actuarial, mathematical, financial, economical, political and philosophical arguments that show that thee pension overhaul spearheaded by Raimondo were never necessary.
“The unfunded liability measures what the system would cost if you close it tomorrow,” said Sgouros, in answer to a question. “And one reply to that is, ‘Oh my God, that’s so large, what are going to do?’ but another reply to it is, ‘Don’t close it.'”
Despite being a voice for Rhode Islanders, said a supporter of Brown, “Your name recognition isn’t there.”
“The people of Rhode Island really need to know you,” she said.
“I want to tell you why I’m supporting Matt Brown…”
Matt Brown and a woman who says that it’s up to people in the room to advocate for him.
Matt Brown and yet another teacher facing economic uncertainty and disaster.
“As far as I’m concerned, she’s kind of demonic,” said a woman about Gina Raimondo’s gutting of the pensions.
Addressing Adam Lupino’s comment that Brown’s promise to address some off the issues around the pension cuts to Donald Trump’s promise to bring back coal, “The difference being, coal is obsolete. Retirement is not.”
Rhode Island is one of the states that subtracts a teachers pension from their social security benefits.
Matt Brown wraps it up.
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