(EAST PROVIDENCE ,RI) – Dr. William J. Murphy pressed Rhode Island Governor Gina Raimondo to disclose the true financial impact of the pension settlement on the total unfunded liability of the state pension system measured consistent with current accounting standards in a letter delivered by email Thursday
“After reviewing the slide presentations and testimony presented to the legislative committees that conducted hearings on the pension settlement, it is not clear to me that Governor Raimondo, General Treasurer Magaziner, and their advisers have disclosed the true impact of the pension settlement on the total unfunded liability and funded ratio of the state pension funds under current accounting rules,” Murphy said. “In light of these questions, I have written to the Governor asking for clarifications on several issues.”
“To begin with, I simply asked for confirmation whether the values for unfunded liability, funded ratio, and related measures reported in the documents presented to the legislature and in the actuarial evaluation of the pension settlement were calculated consistent with the methodologies specified in the GASB 68 accounting standard now if effect.”
“I am familiar with one recently published estimate that total unfunded pension debt, when measured using the new GASB 68 accounting rules in effect this year, will be approximately $3 billion higher than the figures disclosed in legislative committee hearing testimony and briefing materials,” Murphy continued. “I asked the Governor if she and her advisers agreed with this projection.”
“I also asked the Governor to disclose GASB 68-compliant calculations for unfunded liability and funded ratio expected to be presented in the FY 2015 Actuarial Valuation and Annual Financial Reports for the state pension funds.”
“I am also interested in learning whether the funding plan and projected annual contributions to the state pension funds will be increased to reflect the sharp rise in unfunded liability stemming from implementation of GASB 68. I therefore asked the Governor to provide projections for the annual contributions to both the ERSRI and MERS pension funds under both the pension settlement and current law for FY 2017 – 2042.”
“My final request to the Governor was that, in the event GASB 68 calculations have not been presented yet, she return the budget to the General Assembly so that legislators, citizens, and the media will have the opportunity to reconsider the pension settlement in light of this more accurate and timely information,” Murphy concluded.
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