GoLocalProv Investigation Uncovers 25 Illegal Pensions in Johnston
Thursday, August 26, 2010
These illegal pensions are crippling the town’s retirement system, causing the annual town contribution to the fund to balloon from $1.6 million in 2000 to $3.5 million in 2007, according to town records obtained by GoLocalProv. (Click here to see the documents.)
“They are illegal pensions because they are not calculated correctly and in many cases they did not go through the proper process,” said Joe Rodio, the legal counsel for the town of Johnston, who was responding to an open records request from GoLocalProv.
The 25 disability pensions run afoul of two state laws. One says that disability pensions cannot be more than what a firefighter earned while on the job. (Click here to read it.) The other law mandates that disability pensions be approved by the state retirement board. (Click here to read it.)
Town records indicate that not one of the 25 firefighters’ disability pensions was authorized by the state retirement board.
These illegal pensions have added to the burden of the town pension system. “It’s the most significant component of the unfunded liability,” Rodio said. In 2009, the pension system had an unfunded liability of $47.6 million, according to an actuarial study by The Segal Group, a national company.
Last year, the town owed the pension system for firefighters $3.7 million. Rodio estimates that Johnston can cut that by approximately $2 million each year for the next ten years by ending the illegal pensions.
Pensions Violate Second Law
But the town based their benefit on more than salary—taking into account longevity pay, the clothing and maintenance allowance, holiday pay, and severance pay. After 2001, the town added 75 percent of overtime pay to the calculation, according to Rodio.
For example, former fire Chief Victor Cipriano, who retired in 2005, was given a retirement benefit of $70,246.40 in his first year. That was based on 66.66 percent of his total compensation—including not only his salary, but also the other benefits he received, such as the clothing allowance and overtime.
Had his disability benefit been calculated solely on the basis of his salary—as required by law—he would have been entitled to a smaller pension of approximately $50,000, town records show.
State Retirement Director Confirms Claim, But Disputes Law
Frank Karpinski, the executive director of the Employees’ Retirement System of Rhode Island, confirmed that the state retirement board had not received any requests to review disability pensions for Johnston firefighters.
But he disputed Rodio’s interpretation of the law. Karpinski said the retirement board only had to review pensions for disabilities that are not caused by the job. Rodio maintained that the board still needed to authorize regular disability pensions as well.
Related Articles
- Illegal Pensions in Johnston: See the Documents
- Cipriano Pension Deal Is Illegal
- Cipriano Denies He Got Special Pension Deal
- GoLocal Investigation Uncovers More Sweet Pension Deals
- The Sweetest Pension Deal
- The Tim Welsh That I Know
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Comments:
kevin sadowski
9:10am on Thursday, August 26, 2010
anyone see the fireman in westerly or somewhere south of johnston,he was married but had a girlfriend who said he was commonlaw husband and sued for his pension also. and won got backdated benifits.and she was recieving her own cranston police pension.how much we throwing away? maybe we do not need two incomes after all
Robert Frank
11:38am on Thursday, August 26, 2010
Stephen Beale please check all your facts before you post something, most of thoses pension are/were through a private company and not through the state pension system. Maybe Mr Rodio needs to explain to you what happened to the pension system during the Perotta administration.
Also if your going to post pictures of firefighter make sure you post the correct city or dont use photo shop, Johnston Has red firetrucks not limegreeen!
Nick Patriarca
1:25pm on Thursday, August 26, 2010
how about having the State Police / AG's
office investigating the validity of disability pensions ? The perentage of firefighters/ police who are awarded Injured on Duty pensions are astronomical . It allows
the indivdual to receive 67 %,non-taxable amt . Very beneficial fr life on obtaing this IOD pension while not really incapaitated .
any retire from municipalities and go directy to other employment , includinmg State employment . A fraud that should be investigated . Allrevewed on a case by case basis.
Phil Kohanski
2:12pm on Monday, August 30, 2010
Maybe if you used proper grammar in a public forum people would take your defensive tirade more seriously.
Mark A. Markrush
4:17pm on Tuesday, August 31, 2010
How about this? Go to work, get paid, go home. That's what a lot of us do. It is difficult enough to plan for our own retirement with no pension without having to be burdened with supporting others for the rest of their lives. I can't do it and the town certainly can not do it. Come up with a savings plan that doesn't involve the taxpayers and the towns deficit and no one will have to worry about any of this. Btw; I saw a yellow (maybe lime green) Johnston fire truck pass by yesterday. Mark/Johnston RI