A report commissioned by the largest state employee union claims Treasurer Gina Raimondo’s overhaul of Rhode Island’s pension system is enriching Wall Street investment managers.
The state overhauled the troubled pension system by freezing cost of living adjustments and creating a hybrid 401-k style plan. Ted Siedle, a former Securities and Exchange Commission attorney and critic of Raimondo, was hired by Rhode Island Council 94 of the American Federation of State, County and Municipal Employees to probe into the pension overhaul. At a press conference outlining his report, Siedle called the overhaul a wealth transfer scheme.
“The 3 percent COLA cuts, and the skyrocketing money management fees, that I’ve estimated to be as high as $100 million a year amount to a Wall Street wealth transfer,” said Siedle. “Dollar for dollar workers retirement savings are going to hedge fund billionaires, there is no pension reform going on here.”
Raimondo calls the report misleading and a political attack by an out-of-towner who’s being paid to try to scare people. “I think we should just see this for what it is, it’s a out-of-town person being paid an awful lot of money to take political shots at me, paid for by my political foes,” said Raimondo.
She says the pension system is stronger and healthier since the overhaul took place. The state overhauled the troubled pension system in 2011 when it was roughly $7 billion in the red.