EXCLUSIVE: Pension Rip-off—Providence Retirees Benefit from Loophole

Thursday, June 09, 2011

Stephen Beale, GoLocalProv News Editor

 

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A GoLocalProv investigation has found that dozens of former Providence workers retired and collected pensions after working for the city for just a few years—far short of the normal ten years required to even become vested in the retirement system.

As a general rule, firefighters and police officers need to work 20 years for the city before retiring, while other city workers need 30 years before collecting their pensions. But city records obtained by GoLocalProv reveal that 29 retirees over the last decade were able to take advantage of a loophole in the system that allows employees to retire with a pension as long as they are 55 years or older—regardless of how many years they worked.

Councilman: ‘This is a free for all’

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City Councilman Miguel Luna yesterday was outraged and saddened to learn of the situation.

“This is part of the dysfunctional system we have. The city is very dysfunctional,” Luna told GoLocalProv. “This is a free for all.”

All of the employees were hired either in the waning years of the Buddy Cianci administration or under former Mayor David Cicilline. The bulk of them retired while Cicilline was still mayor.
Some came close to working ten years, while others worked as few as four years. They retired with pensions ranging from a few hundred dollars a year to just over $11,000 annually.

All of them are regular pensions—none were for on-the-job disabilities which could explain why someone might leave city service earlier than usual.

In all, the pensions will cost the city $132,000 this year—which is just one more needless addition to the pension burden, Luna said.

He said he is disappointed that there appears to be no one in city government who is acting as a watchdog on such issues. “I don’t see anybody trying to get to the bottom of this whole thing,” Luna said. “We have to do a better job. We aren’t serving the people of Providence in allowing things like this to occur. It’s really, really sad.”

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How was the loophole created?

Anyone who was hired before July 1, 2004 could retire with less than ten years of service, according to the city Retirement Office. A City Hall source said the loophole was closed several years ago by the City Council, as part of a broad package of pension reform initiatives.

“Obviously I’m happy the council closed the loophole,” said Councilman Kevin Jackson, who also had been unaware of it. “I would like to dig deeper into how that loophole was created.”

He worries that there could be more people who retire in the future who were hired before the loophole was closed. “That’s the potential harm in this,” Jackson said. “There could be hundreds of people out there.”

Union president: City needs an Inspector General

Paul Doughty, president of the city firefighter union, also was shocked when informed of the early retirements. Given a number of recent news stories on spending that is either illegal, questionable, or otherwise inappropriate, Doughty said it’s time the city consider creating an Office of Inspector General.

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“It’s like a full-time job watching the city,” Doughty said.

He said the office would be a central place for fielding complaints and tips about pension abuse, ethics violations, and other similar issues.

Top city officials on the list

A number of former top city officials are on the list of retirees with less than ten years of service, including some who left under a cloud of scandal or controversy:

■ John D. Nickelson: Came to work in Providence in 2004 the Public Works Director, after a 31-career in the state Department of Transportation. After working for the city just five years, he retired and took a position with the Federal Highway Administration in Honolulu. Nickelson left after a Channel 12 investigation found that Public Works employees were using city vehicles and property for personal reasons. In addition to earning a pension through the state he is pulling in an extra $5,000 a year from the city.

■ Algot Abrahamson: A former supervisor for the Sewer Department who was one of the subjects of the investigative report. Abrahamson was caught on video driving his city truck to the Decatur Social Club on Federal Hill, which had been raided several times by State Police for illegal gambling. Abrahamson denied gambling there, but he filed for retirement almost immediately after the report aired.

■ Monty J. Monteiro: A former police major who retired after four years on the job. Monteiro had been hired to head up the Homeland Security Division for the police. His departure was marked by a report that his relationship with Police Chief Dean Esserman had become strained. Prior to working for the city, Monteiro turned in a 32-year career with the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.

■ Paul Brooks: The former Chief of Protocol under Mayor David Cicilline, who came in at the start of Cicilline’s first term and stayed on during his eight-year tenure at City Hall. He officially retired this past January.

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