$18 Million in Free Pensions

Thursday, July 14, 2011

Stephen Beale, GoLocalProv News Editor

 

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The state this year will pay out $18 million in what are effectively free pensions to hundreds of retired judges and state police officers, according to a GoLocalProv review of state pension records.

The pension payments—rising to six figures for nearly 40 of the retirees—are the result of a massive loophole in the system that allowed state police officers and judges to work without making any contributions to their pensions for decades—unlike all other state workers, teachers, and municipal employees who are in the state retirement system.

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Granting such pensions puts yet another strain on the system, said John Simmons, the head of the Rhode Island Public Expenditure Council. “It is an additional cost to the system without any contributions,” Simmons said. “We’re paying all the costs of the benefit.”

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The era of free pensions came to an end in 1990—at least for new hires, who now have to contribute 8.75 percent of their salaries to their pensions. But so far, only a few of the contributors have retired. State pension records show that of the state police officers who have retired, just four of them contributed to their pensions—and notably, three went out on tax-free disability pensions. Among the retired judges, only 10 paid into their pensions, as of June 30 this year.

That leaves a total of 318 retired officers and judges who continue to receive pensions funded entirely through taxpayer money. Of those, 39 are pulling in six-figure pensions. At the top is former state Supreme Court Chief Justice Joseph R. Weisberger, who will earn $195,000 this year. All of the 39 six-figure earners are judges except one—former State Police Supt. Steven Pare, who now serves as the Public Safety Commissioner in Providence.

‘One of the tragedies of the pension debate’

“One of the tragedies of the pension debate is that the really egregious pensions that are expensive and cost a lot are the judges,” said Tom Sgouros, a former Democratic candidate for General Treasurer and GoLocalProv MINDSETTER™.

Sgouros said the high pensions paid to judges have been cited by some as an example for why benefits need to be reduced. But he said it’s the “teachers and janitors” who end up getting their pensions cut. “The judges have the clout to make sure they are treated well,” Sgouros added. “I think it’s shameful we think so little of the people we depend on that their system is in shambles but the judges’ is just fine.”

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The free pensions has largely been a sleeper issue in the exhaustive debate over public pensions that has consumed the state in recent months. Even one prominent critic of public employee benefits said he was not aware of the special deal. “I’m surprised and disappointed that we would have given anybody a free pension unless they were working for free—and I don’t think they were,” said state Rep Joe Trillo, R-Warwick.

‘There can be no sacred cows’

The head of the state’s largest taxpayer group said the state can’t afford the judicial pensions.

“The state’s judges, who, in many cases are receiving the judgeship as a political plum appointment when they are at middle age, generally put far fewer years into the system toward a pension than most rank and file workers,” said Harriet Lloyd, the executive director of the Rhode Island Statewide Coalition. “This state cannot afford to reward judges with six-figure pensions for life for a judgeship lasting a limited amount of years.”

It’s not yet clear how the pensions for state police and judges will be affected by the large-scale overhaul General Treasurer Gina Raimondo has said is necessary to fix the system.

“We emphatically believe there can be no sacred cows in the retirement system, period. The state police force and judges should have their pension plans reviewed and reformed just as the pension benefit for the rank and file state workers and teachers is being reviewed this summer for possible changes,” Lloyd said. (A spokeswoman for Raimondo did not respond to a request for a comment.)

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How did this happen?

Just how did state troopers and judges wind up with free pensions?

For the State Police, Pare told GoLocalProv that the deal dates back to the mid-century when they didn’t earn that much. “They were low-salaried. They were paid hardly any money,” said Pare, who followed his father into a career in the State Police in 1980. “The concept was in giving them benefits in pensions at the end of their career.”

At the time, troopers worked a far more demanding schedule and actually slept in the barracks during their work week, Pare said. But after the State Police became unionized, their salaries steadily rose throughout the 1970s and 1980s—paving the way for the state to mandate they pay a share of the pensions starting in 1990.

The current State Police Superintendent, Steven O’Donnell, defended the compensation that troopers receive. “I’m a full supporter of paying the police the right amount,” he told GoLocalProv. “They’re bright educated young men and women. We recruit very good people. We train them very well. They’re an extraordinary group of people.”

A similar justification is behind the pensions for judges prior to 1990, said Bob Craven, a former state assistant attorney general in the 1980s and early 1990s. Like state troopers, he said there was a time that judges just did not make a lot of money.

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He recalled one exchange with a judge when he was a prosecutor in the Attorney General’s office. Craven said he had criticized the judge—whom he declined to name—for an opinion. “He told me what his salary was and not to expect much out of him,” Craven recalled. (A spokesperson for the Rhode Island Judiciary did not respond to a request for comment in time for publication.)

For State Police another factor could be at work. “You’ve also got to consider at any given time the danger of the job,” O’Donnell added. While must of the public is fixated on the cost of pensions—especially disability pensions—for retired police and fire, he said he wished they’d keep in mind the heroism they demonstrated in September 11. “Everyone’s running out of the buildings. Who’s going in there?” he said. “There’s a lot of value to that.”

Judges now make 80 percent of salary in retirement

Since 1990, other changes have been made to retirement benefits for State Police and judges. Most recently, the state increased the minimum years of service for the police. Before 2009, troopers could retire at 20 years with 50 percent of pay, receiving a higher percentage for each additional year. At year 25, they could leave with 65 percent, according to O’Donnell.

But now troopers have to work for at least 25 years before retiring, at which time they receive 65 percent of their final year’s salary as their retirement income. They can work up to 30 years, but would still start out in retirement at 65 percent, O’Donnell said.

The system for judges also recently was changed. For judges appointed after July 1, 2009, their pension will be equal to 80 percent of their final average salary, which is based on their five consecutive years of highest pay. Judges appointed before then could retire with 100 percent of their salary.

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