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The Associated Press October 28, 2011, 10:05AM ET

RI unions say pension problem overstated

Rhode Island labor unions that are fighting a proposed public pension overhaul accused state Treasurer Gina Raimondo on Thursday of overstating the problem to justify extreme changes.

Their remarks came during a third day of legislative hearings on a proposal by Raimondo and Gov. Lincoln Chafee and a day after hundreds of supporters and opponents of the legislation filled the Statehouse to weigh in on the bill.

Paul Valletta of the State Association of Firefighters said Raimondo "cooked the books" with actuarial assumptions and conservative market projections that exaggerate the pension system's problems. He accused her of supporting "draconian" changes to the retirement system to raise her political profile.

"She created this problem and now she's riding in on a white horse," Valletta said.

Raimondo, a Democrat, insists that rising pension costs could cripple governments and force tax hikes or budget cuts. The state's unfunded pension liability stands at $7 billion, and the state's pension costs are set to double next year to over $600 million. The state retirement system covers 66,000 public teachers, state and municipal workers, police, firefighters and judges.

The proposal would save $3 billion over a decade by raising retirement ages for most workers and halting annual cost-of-living pension increases for most retirees. The legislation would also create a new system that combines traditional pensions with 401(k)-style retirement accounts.

On Thursday, lawmakers heard from police, firefighters and prison employees. Many pointed to higher retirement ages as a particular concern since their jobs are physically demanding. Echoing comments from public teachers and state workers at a hearing Wednesday, they predicted the proposal to halt pension adjustments for a projected 19 years would devastate the finances of many retirees.

Several said they would consider higher pension contributions for employees or more modest reductions in cost-of-living increases instead.

"There's always room to negotiate," said Tony Capezza, director of the state chapter of the International Brotherhood of Police Officers. "Why won't you listen to us? Why are we always trying to balance the problems of the state on the backs of workers?"

Supporters of the plan, however, said the state and its municipalities can't afford to water down the legislation. Woonsocket Mayor Leo Fontaine said his cash-strapped city has cut services, eliminated positions and even turned off streetlights.

"Our city services have been decimated," Fontaine said. "We just don't have the money. How much more can we take?"

Hearings continue next week. A vote by the General Assembly is likely a few weeks away.

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