26 Out of Top 30 Providence Retirees on Disability

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Wednesday, May 18, 2011

Stephen Beale, GoLocalProv News Editor

Twenty six out of the top 30 highest paid retirees in Providence are on tax-free disability pensions, costing roughly $3.5 million this year, according to the latest available pension payroll from the city.

Of the top earners, 20 retired between January 1988 and 1991, when 8 out of every 10 retiring firefighters and about half of retiring police officers went out on a job-related disability pension. For the Fire Department alone there were a total of 86 members who retired with a disability over those three years, accounting for a fourth of all retired firefighters on disabilities—from 1972 to the current year.

By way of contrast, just a third of fire retirees since 2006—when the city started to tighten the rules—have gone out on disability pensions.

Most of the top 30 currently highest paid retirees are firefighters, while just six are police officers. None were regular city employees or teachers. (See below chart for the full list.)

In addition to tax-free disability pensions, the bulk of the retirees on the top-30 list are also benefiting from annually compounded cost of living adjustments as high as 6 percent, which has allowed them to triple their income over a 20-year period. (Click here to see a breakdown of all the major benefits that a retired firefighter on a disability could receive.)

‘Unfathomable’ that retirees make more than active duty firemen

“These were in my mind anomalies for the time and place in which they occurred and no current union member will receive pensions of this magnitude,” said Paul Doughty, president of the city firefighter union. “I think that the amounts that they receive are excessive. It’s unfathomable that a retiree would actually make more than an active member who is actually doing the job.”

All 30 on the list are earning six-figure pensions. Nearly three quarters of them retired as senior non-union firefighters, according to Doughty. The highest paid is former Fire Chief Gilbert McLaughlin, who is pulling in $185,672 this year, based on his monthly earnings for April.

Yesterday, McLaughlin declined to comment. But the second highest paid retiree was adamant in an interview that he earned his pension. “I put in 36 years—that’s it,” said Robert Anthony.

William Manchester, who retired as a deputy assistant fire chief, said retirees are being unfairly criticized for how much they make. When he started out in 1965, he said the average firefighter was paid less than most private sector workers and had to work two jobs just to make ends meet. “I worked hard to take care of my family and make a higher salary and if someone didn’t want to do that there’s something wrong with them,” said Manchester, who placed fifth on the list.

But that doesn’t mean he doesn’t see problems with the city pension system. “I think the whole system stinks, to be honest with you,” Manchester told GoLocalProv. “Because there were fellas on the job with me that paid 10 percent [in contributions] for years and years and they’re not getting the same benefit.”

However, Manchester maintained that disabled firefighters still deserve tax free pensions, at two thirds of their salaries. In his case, he said he worked so many years that he would be earning the same amount even if he did not go out on a disability.

8 out of 10 retirees on disabilities

In the late 80s and early 90s, the record high number of retirees with disability pensions sparked some alarm among city officials. One councilman accused firefighters of claiming “phony” injuries and ripping off taxpayers. A council-backed effort to review the medical records of those retirees set off a protracted legal battle and ultimately the movement to rein in pension costs lost steam.

But city disability pensions have rocketed back into the headlines after a retired firefighter with a disability was caught on camera lifting weights. Now Public Safety Commissioner Steven Pare is launching an investigation into the disability pensions issued to firefighters between 1990 and 2005. Doughty has gone further, calling for the review of medical records for all firefighters on a disability.

‘Infuriated taxpayers’

City Councilman David Salvatore, D-Ward 14, said hearing about potential disability fraud “has infuriated taxpayers including myself.” He said he was “appalled” by what he saw on the undercover video, calling it an “insult to the bravery” of firefighters.

“Pension abuse diminishes the hard work of the brave men and women that dedicate their careers to public safety,” Salvatore said. “I hope Commissioner Pare’s investigation sends a loud message that City taxpayers are not going to tolerate illegal activity surrounding disability pensions. If Commissioner Pare’s investigation concludes that the law is being broken, consequences must follow.”

One former city councilman says the high rate of disability pensions between 1988 and 1991 is enough to arouse suspicion. “If 9 out of 10 people eat your macaroni and get sick, is it the macaroni’s fault?” said Joe DeLuca.

DeLuca says he is convinced some disability pensions were unwarranted. “Obviously … if you have that many disability pensions and it’s the standard and not the exception to the rule,” DeLuca said.

However, Salvatore said the high rate of disability pensions in of itself was not enough for him to say there was fraud. He said he would need to see concrete evidence of that.

Former union leader: ‘A very pure system’

The past and present leaders of the city firefighter unions are questioning accusations of fraud and abuse. Former union leader Stephen Day—who also sat on the Providence Retirement Board—described the city pension system as “a very pure system.” He said two out of three city doctors had to approve a disability pension—and that he was not in a position to question their judgment. (Now, all three doctors need to sign off on the disability.)

So why were there so many disability pensions? Day blames it on understaffing in the Fire Department, which he said caused more injuries. When the city increased staffing, he said it had to push injured firefighters out on disability pensions to open up more positions for new hires.

Doughty also cautioned against jumping to conclusions. “I would believe if they were unwarranted something would have percolated up by now after 20 years. Someone would have said something by now,” Doughty said.

“Are they high? Yes. But it’s easy to paint everybody with a broad brush and say they’re all a fraud,” Doughty added. “Until proven otherwise, I think they’re all valid.”

He said he has called for the full medical review of all disabled retirees to clear their reputations.

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