Meet The Hedge Fund Wiz Kid Who’s Shrinking America’s Pensions

[Omaha Steve]

X post in GD & Socialist-Progressive

http://thinkprogress.org/economy/2014/10/28/3585128/arnold-pensions-retirement-manufactured-crisis/

BY ALAN PYKE POSTED ON OCTOBER 28, 2014 AT 10:37 AM UPDATED: OCTOBER 28, 2014 AT 12:24 PM

When longtime private equity analyst Gina Raimondo won her bid to become treasurer of her home state in 2010, Rhode Island’s public pension system was in such disarray that federal regulators were sniffing around to make sure the state was reporting the funding levels accurately.

Within two years, Raimondo (D) would push through the most significant cuts to public worker retirement benefits in the country and begin a campaign for the Governor’s mansion. The changes she masterminded in 2011 shrank the state’s pension funding gap by billions of dollars almost overnight, an achievement that would have taken years under the more moderate reforms other states have tried. But the rapid, aggressive approach came at a steep cost for the 66,000 men and women who teach, fight fires, and administer public programs in the state.

After years of paying into a retirement system that promised fixed annual payments in their golden years, Rhode Island’s public workforce got herded into a new, far riskier system. Raimondo’s policy is what’s known as a “hybrid pension,” where the system of guaranteed payments to retirees was replaced by a combination of individual investment accounts and a much smaller version of the traditional pension payments. The change amounted to a large benefit cut for thousands of workers.

“She knew what she wanted to do and it was all just a facade of engagement,” said John Adler, Retirement Security Campaign Director for the Service Employees International Union (SEIU). “She steamrolled it. The process was a fake process.”+

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