The smell and consternation of pension reform is in the air
There is an elephant standing in the foyer of many gubernatorial mansions, and it has grown too big ignore, forcing some governors and legislatures to finally introduce pension reform bills.
Major states such as Illinois and Pennsylvania are taking on the issue, but the most muscular attempt to wrestle billions in pension deficits to the ground is a bill signed into law by Gov. Lincoln Chafee of tiny Rhode Island, which is trying to stare down what one observer called “some of the most intense fiscal stresses of any state.” That being the situation, the Chafee-backed legislation would wipe out about $1 billion in existing pension liabilities by freezing retirees’ cost-of-living adjustments for 15 years. Critics who have run the numbers point out that, by the time the freeze is lifted, pension payments to many retirees will be one-third smaller than initially promised.
That has set off a legal battle royal. Rhode Island has signed