NEW: Providence Council Takes Up Pension Reform
Tuesday, November 15, 2011
At its first meeting on Monday, November 14th, the Providence City Council Subcommittee on Pension Sustainability elected its leadership, and reviewed four pension reform ordinances introduced last month. The committee approved two of the ordinances, which will be voted upon by the full Council at the Special Meeting on November 17th, following the regularly scheduled 7 p.m. meeting.
The five member subcommittee of the Committee on Ordinances elected Councilman David Salvatore (Ward 14) as Chairman, and Councilman Samuel Zurier (Ward 2) as Vice-Chairman. The other members of the Pension Sustainability Subcommittee are Councilman Michael Correia (Ward 6), Councilwoman Sabina Matos (Ward 15), and Majority Leader Seth Yurdin (Ward 1). Salvatore, along with Council President Michael Solomon, and Councilman Yurdin, co-sponsored the ordinances in October; Yurdin, who chairs the Committee on Ordinances, established a special subcommittee to focus on the City’s retirement system and pension reform.
The two ordinances approved by the subcommittee would do the following:
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST1) Change the definition of “final compensation” for purposes of calculating retirees’ benefits. Currently, benefits are based on the average compensation of the three highest years, but the ordinance submitted would extend that to the highest five consecutive years of compensation within the last ten years of service. (Amends Section 17-181.)
2) Require employees with 25 years or more of service to continue to contribute to the pension system for the length of their employment; currently, such individuals may opt-out of continuing their contributions.
Council President Solomon, who attended the meeting, stated, “The Council has tremendous momentum to achieve substantive pension reform— reform that will lead Providence forward on its path towards fiscal stability, while providing retirement security for our current and future retirees.” He noted that, “Over the next five years, the measures approved by the subcommittee will save the City more than $12 million. These ordinances represent an important, common sense first step forward.”
The subcommittee also voiced strong support for two ordinances that would directly impact Council members. The ordinances would:
1) Eliminate the so-called “elected officials’ pension” (amending Section 17-192) effective January 2015; and
2) Prohibit time spent on the Council from being credited in conjunction with time spent in other City positions toward a single pension (amending Section 17-188).
Dan Sherman of Buck Consultants, who serves as the City’s actuary, will review these proposals, and advise members regarding the most cost-effective and prudent options. Salvatore said the subcommittee will take up these and other ordinances within the coming weeks.
“As the statewide pension debate has revealed, pension reform is a key issue for Providence, as we look to emerge from our fiscal crisis as a stronger, more responsible City,” said Salvatore. “Providence’s unfunded liability looms large at $825 million and, while much attention has focused on the need for state intervention, the Council will continue to make the legislative reforms under its purview to reduce the costs of the City’s retirement system.”
The Special Council Meeting will be held in the Council Chambers, City Hall, 3rd Floor, on Thursday, November 17th, upon the rise of the 7 p.m. regular meeting.
