Good Luck on Retiring

There was a bill passed in Rhode Island this week that suspended pension increase for state employees for the next five years.  Those five years many turn out to be longer if the pension funds do not meet certain financial targets.  The state decided to pass this bill because of the financial crisis they have found themselves in.  The state of Rhode Island currently needs $7 billion to cover the pension funds for every state and municipal employees.  That is roughly the same amount as their state budget every year.  While many, if not all, of the lawmakers who passed this bill believe it is necessary to help the fiscal budget, many of them believe that it is not fair to the employees who are not able to have their pension fund increased.  By doing this Rhode Island has shown to the other states that if they are able to pass this bill to get their fiscal budget under control they can do the same.  The United States has a collective debt of $1.26 trillion of what they promised employees and what they have to fill that promise.  Rhode Island may have made a lot of people angry but they would have had to happen one way or another.  If the state had not made this decision they would have had to increase taxes on its residents which would have made the residents just as angry. 

I believe that Rhode Island made a good decision to put a cap on its pension for now.  I agree that it is not fair to current retirees and state employees to deny the pension originally promised to them, but I agree that the state needs to get its budget under control.  The states being in debt results in the nation being in debt and our current national debt is something that would make your jaw drop at the rate it is rising.  Hopefully something will happen in the next few years that will take the cap off of Rhode Island’s pension plan so that the retirees and current employees may receive the benefits that were originally promised to them.