Municipal pensions the second front

“Instead of reforming the benefit side, they forced cities and towns to fund to a certain level within 10 years,” said Cranston Mayor Allan Fung (photo). “I would have to raise taxes substantially or cut services to meet it.” More

To continue reading this article, please do one of the following.



POLITICS

Municipal pensions the second front

COURTESY WWW.ALLANFUNG.COM
“INSTEAD of reforming the benefit side, they forced cities and towns to fund to a certain level within 10 years,” said Cranston Mayor Allan Fung. “I would have to raise taxes substantially or cut services to meet it.”
Posted 10/31/11

As bad as the future looks for Rhode Island’s beleaguered state pension system, the future of plans like the one funding the retirement of 490 of Cranston’s police and firefighters looks even worse.

Closed to new members in 1995, the Cranston plan has assets to cover only 17 percent of a $300 million unfunded liability, far worse than the state system’s 48 percent funding level.

So with local leaders like Cranston’s concluding that measures in a proposed pension-overhaul bill may do more harm to their struggling local plans than good, the fate of those plans has emerged as a contentious second front in the battle over pension reform.

“Instead of reforming the benefit side, they forced cities and towns to fund to a certain level within 10 years,” said Cranston Mayor Allan Fung. “I would have to raise taxes substantially or cut services to meet it.”

Fung, who strongly supports the bill’s central reforms of the state system, is not alone in suggesting the measures designed to help cities and towns don’t get the job done.

Almost immediately after the bill was filed, Providence Mayor Angel Taveras said the plan did not give the capital city the tools it needs to fix its pension issues, which include a public-safety plan that has been singled out as one of the worst-funded in the state.

From Taveras’ perspective, the proposal simply doesn’t go far enough, spokesman David Ortiz said.

And the concerns extend beyond the state’s largest cities.

Coventry has three plans outside the state system that are all precariously ill-funded.

The worst off covers the town’s public-safety workers with only 16.5 percent of the total liability funded.

Coventry Town Manager Thomas Hoover estimates that without help, the public-safety plan will run out of money in 2021, while another plan for nonuniformed town workers will run out of money in 2028.

Like Fung and Taveras, Hoover said the current language in the bill does not help fix Coventry’s local plans and the town would have to raise taxes well beyond the state levy limit to meet the bill’s funding targets.

Of the central elements in the reform bill’s plan for the state-run pension plan, which is estimated to save the state system an immediate $3.2 billion, the most controversial measure is the proposed freeze in annual cost-of-living increases for most retirees.

Next Page
Calendar
PBN Hosted
Events

Two Great Programs...One Great Event. PBN's Annual Celebration of Growth and Innovation is now underway. 2014 applications are now available. Deadline August 1st.
  • 40 Under Forty
    We're almost sold out. The 10th Anniversary of 40 Under Forty, and PBN is planni ...
  • Healthiest Employers
    See who the Healthiest Employers in RI are! And save the date - August 14th - at ...
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement