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Donna Perry: Time for Heavy Lifting on Disability Pension Reforms

Thursday, May 31, 2012

 

A second major advance in the recent effort to once and for all overhaul the decades in the making corrupted Providence pension system is set to launch just one month from now. Coming on the heels of the high profile pension reform ordinances recently passed by the Providence City Council will be the implementation of tougher new standards governing the disability pension system.

The disability pensions, combined with the infamous 5-6% compounded COLA’s, has long been recognized as the two headed monster of pension excess that has been feeding off city taxpayers for far too long and threatens to devour dwindling city finances if not slayed soon. But one can only hope that a new set of requirements and regulations for disability retirements set to go into effect June 30 will find their way to the “heavy lifter” title holder of disability pension corruption, retired firefighter/weightlifter John Sauro, in the wake of a troubling vote by the city Retirement Board in recent days.

The Providence Retirement Board (PRB) voted 6-1 last week to drop an eight month investigation and pursuit of possible criminal wrongdoing by Sauro and possibly others involved in legally asserting that he continues to have a full disability from Fire Department work, which were prompted by a Channel 12 investigation which showed him repeatedly engaging in heavy weightlifting at a gym despite being on a full disability pension for more than a decade. Kenneth Chiavarini, the Assistant City Solicitor who persuaded the PRB to drop the Sauro matter last week, now asserts it’s far from over for Sauro but that it made more sense going forward to re-examine the Sauro case, along with hundreds of others, under the fast approaching new disability review standards.

The overhaul is long overdue when one considers that disability pensioners like the gym attending weightlifter Sauro has accumulated hundreds of thousands of dollars from the city in a tax-free disability retirement and is now drawing nearly $4,000 a month ($3,902). Stunningly, published reports over the past year show the average firefighter disability pension is even higher than Sauro’s, at an average of $5,500 a month, and the average police officer disability payment is $4,300 a month. These are outsized retirement payments just in contrast to the average municipal worker disability payment which is $1,600 a month. There are 566 accidental disability pensions being paid out right now that alone are costing the city $2.2 million per month, and they represent 30% of the entire pension system.

The new requirements will bring changes that seem key to reducing the numbers of permanent disability claims, especially from within the ranks of police and firefighters, because for the first time, the city will mandate that a disability pension recipient can be reassigned to city employment once it’s certified by a pre-approved specialty physician that the injury does not disqualify them from the general workforce, only from their former specific job.Changes are also aimed at tightening up the restrictions on doctors who are permitted to assess eligibility: going forward, a physician must be certified in the field reasonably related to the pensioner’s disability.(Previously a chiropractor or a dentist, for example, could certify that you have a heart condition ….. gee, not too much chance for exploitation of that kind of system, right?)

The changes mean pensioners deemed eligible to work, including Sauro, could be called back into the city workforce and if they/he refuses, the new regulations would impose a penalty that would amount to a drastic reduction of the retirement to a “service pension” level.

By the way, there is an opportunity staring directly at the General Assembly right now to overhaul disability pension excesses statewide if legislative leaders, including Speaker Gordon Fox, Senate President Paiva-Weed and Finance Committee chairs would only act on the Chafee Municipal Pension Reform and Relief package. It addresses, among numerous other items, disability pension reforms for local communities and would mandate that an annual accidental disability pension cannot exceed 50% of an injured worker’s pay. (It presently hovers at 66% in most communities.)

Those current formulas weigh down local communities; city and town leaders want and need the relief; and it deserves passage, as RISC has called for all session.As Providence continues to wrestle with courts and unions over its still unresolved proposed reforms to standard pensions, and other communities start to buckle under the weight of their unfunded plans, it now appears that the beleaguered capital could at least begin this summer leading the way on reforms to tax-free disability retirements. In this case, the heavy lifting work of instituting the reforms will have been worth the workout.

Donna Perry is Executive Director of RISC, RI Statewide Coalition (http://www.statewidecoalition.com)

EDITOR'S NOTE: The original version of this story incorrectly claimed that Mr. Sauro had been earning $3,092 for 12 years. An edit has been made to reflect more accurate information.

 

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