GoLocal Investigation Uncovers More Sweet Pension Deals

Wednesday, August 11, 2010

 

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As if Victor Cipriano’s special pension deal was not outrageous enough, it turns out that there could be as many as 20 retired police officers and firefighters in Johnston whose pensions are equally excessive and illegal, according to town records.

“Cipriano wasn’t the only one who got goodies added to his pension,” said town attorney Joe Rodio. 

Rodio estimates that there are about nine retired police officers who are receiving special pension deals that were not approved by the town council—as required by the town charter and state law. In addition, there are at least 12 retired firefighters whose pensions are “suspect,” according to Rodio, who responded to an open records request from GoLocalProv.

The dozen firefighters appear to be making more than they are supposed to, based on an initial review of town records. But Rodio said he needs to review more records to determine whether their pay is justified or not.

The nine police officers are double dipping - collecting their regular pensions and cashing out the annuities that were originally supposed to be funding those pensions, according to Rodio. “You can see it’s a rip-off of the pension system,” he said.

Of those nine officers, four also are receiving high pension incomes that are based on artificially inflated numbers for their salary, longevity, and holiday pay.

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Special Deals Add to Pension Burden

Rodio said the special pension deals are coming at a heavy cost to taxpayers. The town’s contribution to the pension system has skyrocketed from $1 million in 2000 to $7.5 million today—which is roughly as much as the cost of payroll for active employees, according to Rodio.

Over time, those special pension deals have helped drive up the town’s unfunded pension liability. Johnston has about $30 million in assets in its pension system, with a $60 million to $70 million unfunded liability, according to Rodio.

The town plans on cutting the extra payments to those nine police officers and dozen firefighters. That alone would reduce the unfunded liability by 20 percent, Rodio said.

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Town Will File Lawsuits over Pensions

The town will also try to recover some of the extra money those retirees have been paid.

Rodio said the town will first give them a chance to return the money. Those that refuse, he said, will be taken to court in a set of lawsuits the town will file in Providence Superior Court.

The lawsuits are the outcome of a three-year investigation that began when one retiring police officer, John Nardilillo, asked current Mayor Joseph Polisena if he could borrow money against his retirement plan. Polisena checked with Rodio, who told him it was illegal.

After the incident, Rodio said the town looked into the officer’s records—and found out that it wasn’t the first time he had borrowed money from the town. In the early 2000s, Nardilillo borrowed $6,500 against his pension plan—and never paid it back. Aside from the $6,500 loan, he also owes the town money in exchange for certain benefits he received during his years as an officer. In all, his debt to the town is $27,000, according to Rodio.

Rodio says he was initially shocked by how many special pension deals former Mayor William Macera had handed out to retirees. “You would never think that a mayor would make a wink-wink, nod-nod pension deal,” Rodio said. “To me, it’s unheard of.”

But as Rodio’s law firm and town staff pored through the records, they uncovered other instances of sweetheart deals. One involves former firefighter William Jasparro, who retired in 1998 with a regular pension of about $1,600 a month and went on to work for the Rhode Island Resource Recovery Corporation.

But three years later, Jasparro sued the town in an attempt to change his regular pension to a disability pension, which is tax free. “The town never opposes the lawsuit and consents to give him his disability pension—another sweetheart deal,” Rodio said.

 
 

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