The Money Wall Street is Making Off Rhode Island’s Pension Funds is Also an Issue

The New York Times gave readers only part of the story in an article on the Democratic primary race for governor of Rhode Island. It notes that state Treasurer Gina M. Raimondo is currently the frontrunner.

It then told readers in reference to Raimondo:

“The ‘tough choice’ was her overhaul of the state’s pension system in 2011. She marshaled the state’s Democratic political establishment to increase the retirement age, cut benefits and suspend annual cost-of-living adjustments for state employees until the finances of the underfunded system improved. The move was meant to save $4 billion over two decades and slow state property tax increases. …

“The pension overhaul is now at the center of a primary race for governor that has become one of the most divisive in the country.”

Raimondo did not just cut benefits. She also invested a large portion of the state pension fund with hedge funds and private equity companies under terms that were not disclosed to the public. (Raimondo formerly worked with a hedge fund.) The state’s major newspaper has sued (unsuccessfully) to force disclosure of this information.

However the issue is not just cuts to the benefits promised public sector workers. There is also a question of whether the state’s pension funds are being used to enrich Wall Street.