A state can reduce its pension liabilities by reducing promises made to incoming employees. But Rhode Island has taken a more dramatic (and meaningful) step by reducing promises going forward for current employees.
California made some adjustments to the promises it makes to new employees. The financial gain for the state: $4 to $11 billion. That’s real money, but a drop in the bucket. The state’s unfunded liability is $120 billion.
Rhode Island’s leaders, meanwhile, have proposed ideas to cut its unfunded liability in half. How? Suspended COLA payments–for two decades–is one component. That’s one way to measure the size of the hole the state dug for itself.
The state’s General Assembly also has a website, PensionReformRI.com, which describes the situation. Perhaps Minnesota would benefit from a similar effort.