Matt Brown goes after Raimondo for slashing pensions

Raimondo’s pension cuts benefited hedge funds more than RI, says Brown

By Will Weatherly in Rhode Island’s Future

Democratic gubernatorial candidate Matt Brown attacked pension cuts for state employees dating back to Governor Raimondo’s previous role as state treasurer at a town-hall style “Restore Our Pensions” event at the WaterFire Arts Center in Providence on Monday evening.

The event came mere hours after WPRI published polling results showing Brown lagging behind in name recognition, and featured vocal ire from one advocate for the governor.

Despite those setbacks, an overwhelming majority of attendees, many of whom were retired teachers, responded to Brown’s proposals and critiques of Governor Raimondo with excitement, and many expressed a sense of betrayal at the governor’s previous management of the pension fund.

In 2011, Raimondo announced that the state would freeze cost-of-living adjustments (COLAs) for two decades, as well as invest more than $1 billion in retirement assets in hedge funds for “hybrid,” 401(k)-style retirement plans.

In 2016, Treasurer Seth Magaziner rolled back Gov. Raimondo’s plan, shifting $500 million away from hedge funds to more stable assets. Magaziner told CNBC that the hedge funds “did not perform well” and “did not provide protection during the periods of volatility that we’ve had over the last year.”

Brown pushed further, arguing that “the drastic cuts that Governor Raimondo put in place did not need to be made,” and that the state had lost $500 million in in “high-risk, high-fee” hedge funds, as opposed to what would be made in stable index funds, in the process.

“On top of that,” Brown added, “she paid, from state coffers, over $200 million in fees to those hedge funds which performed badly.” He called the cumulative effect of her decision a “massive transfer of wealth from working Rhode Islanders to hedge fund managers.”

Many testified that, without COLA increases, their pension funds were not enough to make ends meet.

Before the event, one former teacher told me that despite retiring 8 years ago, she “yet to have seen pension increases enough to keep up with the increase in [her] property taxes.” 

Maribeth Calabro, president of the Providence Teachers Union, told the room that Raimondo had “changed her future,” vastly extending the time which she will have to work.

“We’re going to have more than health care when we negotiate contracts in the future,” she said, “it’s going to be health care, then feeding tubes, then walkers, because we have this random age we’re forced to stay until.” Calabro jabbed that the governor “robbed us all blind, and didn’t buy us a drink.”

In the middle of attendees’ testimonies, a man who identified himself as Adam Lupino got up to offer what he qualified as a different sort of account.

Lupino declared: “My feeling is that prior to 2011, the pension fund was unsustainable.” He argued that the fund would cost an increasing amount of the state’s tax revenue “if Gina Raimondo didn’t come in and roll her sleeves up and do the hard work.”

He added—closely in line with the governor’s own attacks on Brown—that Brown was “absent” in 2011, and that “seven years later, the actuary predicts the fund will be 100% funded in 2036, still on schedule.”

The crowd began to boo Lupino into silence. “Well we’ll be dead!” a man behind me shouted. “We’ll all be dead!”

Another woman later testified that, living on only $35,000, she had been forced to move in with her children, and has not yet been able to afford a tombstone for her late husband. Motioning to where Lupino sat, she said, “Get in my shoes young man. Try it. It’s hell.”

Brown did not directly touch on the dissenter during his speech, but after the event, I asked him how he would respond. “What we were doing tonight was getting the truth out about pensions,” he said.

“That story was told, it was told by [the pension reform advocacy group] Engage Rhode Island with millions of dollars, it was told by Governor Raimondo.” Brown then doubled down on the fact that the cuts were unnecessary and the investments were highly costly for the state.

I also pushed Brown on his response to that afternoon’s polling results.

According to WPRI, 45 percent of voters “have no opinion” of Brown, and while he nearly matches Raimondo’s favorability among Democrats at 23 percent, and has a higher favorability among independents, Brown still has a ways to go to increase his name recognition before the primary in five weeks.

The poll also showed Brown lagging behind Republican gubernatorial candidate Allan Fung, at 21% and 26% respectively, which might mean that Brown might continue to face a tough race should he win the primary.

When asked if Fung’s lead makes him reconsider how he’s running his campaign, Brown responded optimistically: “Not at all. We’re rising quickly. He’s been campaigning for 5 years for governor; he has very high name ID. We just started four months ago, so we’re catching up quickly, and certainly after this primary we’ll have plenty of time to overtake him. Keep in mind, after all that time campaigning, he’s still in the mid-30 percent. So nearly two-thirds of Rhode Islanders would rather have somebody else. So we just gotta get our message out, knock on doors. And we’re doing it.”

The Raimondo campaign did not respond to a request for comment by the time of publication.

Will Weatherly is a contributor to RI Future and a senior editor at the College Hill Independent. He lives in Providence, RI. You can follow him on Twitter @willbweatherly.