Legislation that seeks to bolster the retirement income of teachers in Rhode Island—including through participation in the federal Social Security system—is going to receive further study.
The Finance Committee of the Rhode Island House of Representatives at an April 25 hearing decided to further study the bills before taking a vote on whether to recommend to the full House that they be passed. The committee also listened to testimony concerning the measures.
Include New Teachers in Social Security System
Rep. Patricia Serpa (D-West Warwick), who serves as Chair of the House Oversight Committee, spoke concerning HB 7026, the bill she introduced on Jan. 5 that would require all public school teachers hired on or after July 1, 2024 to participate in the federal Social Security program.
Serpa noted that in its recent report concerning retirement financing in Rhode Island, the Pension Reform Group (PRG) said that “actuaries indicated that it is very important that teachers be included in the Social Security system.”
Eric Hasle, a representative of the Rhode Island chapter of the National Education Association, also expressed support in his testimony. “We support the concept of everyone paying into Social Security,” he told the committee.
Some do, some don’t. Serpa observed that there are 12 school districts in Rhode Island that do participate in it, and 23 that do not. Aldo Palazzo, a representative of the group Advocates for COLA Restoration and Reform that supports pension reform in Rhode Island remarked that it is “amazing to people that 23 districts are not covered.”
Serpa, who before her service in the House was a teacher, herself, said that she is grateful that she worked in a district where teachers participate in Social Security. “It made all the difference,” she said, adding that she has heard from other retired teachers who have to resort to public assistance to make ends meet, which she said was “shameful.”
Vote vs. mandate. Rep. Teresa Tanzi (D-South Kingstown, Narragansett) asked Serpa how it was possible that some districts participate and others do not. Serpa responded that the matter is decided by a vote of the teachers in those districts. Palazzo in his remarks said that some teachers had been given incorrect information concerning the ability of retired teachers’ spouses to receive benefits as beneficiaries. Serpa remarked that rather than the matter being decided by a vote, “we should mandate it.”
Employer contributions. Serpa indicated that she may propose an amendment to her bill that would add a provision concerning employer contributions—in this case, by governments—to the Social Security system on behalf of the participating teachers. Rep. George Nardone (R-Coventry) expressed concern about the cost to local jurisdictions of making those contributions.
One-Time Stipend
Serpa also expressed her support for another bill she introduced in January, HB 7342, which provides that all retired teachers and all retired state employees would receive a one-time stipend in the amount of 3% of the lesser of either (1) the member’s retirement allowance or $40,000 of the member's retirement allowance. She argued that the revenue required would be a small fraction of state spending on pensions.
While they did not express opposition to the bill, witnesses, including Hasle, said they seek longer-term solutions. “What we really need to do is look toward longer-term solutions, not just come up with short-term solutions,” he said, adding, “We don’t want this to be a perpetual problem.”
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