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Michael Riley: The Harsh Reality of the Pension and OPEB Crisis

Tuesday, February 25, 2014


The party is over for spending without funding, believes Michael Riley.

Right now your city administrator or mayor is sitting with the finance director and making decisions about next year’s budget. But this year, thanks in part to pension reform and the municipal study pension commission, close to 14 different town administrators and directors will have to finally reveal the truth and make real decisions about pension funding and cuts to other programs.

During this year’s budgeting process, many of your town’s municipal departments will hear a lot about constraints due to “ARC” payments. Town employees will be confronted with budget cuts and perhaps wage freezes. New priorities will be established and marginal expenditures will be eliminated. The party is over for spending without funding.

Corruption in RI’s cities and towns

The hard reality is that Mayors and councils have been, for years, knowingly sweeping huge obligations under the rug because there were no penalties them for doing so. Sure it was extremely irresponsible and completely against State Law, but so what? Officials had bigger fish to fry. Narragansett for example has violated Section 45-10-15 of the Rhode Island General Laws by not contributing 100% of the annual required contribution (ARC), every single year since 2001. Every Rhode Island municipality has known this since at least 2006.

The penalty for violating this law was for the town to fill out a form “ stating a new plan” and describing planned fixes. Laughably, towns could then easily violate this law without risk to their jobs and so they did so with impunity. Narragansett went from a $9 million problem in 2006 to a $120 million dollar liability when OPEB was included in February 2014. How could such a wealthy town, with it’s self touted “low tax rates” have set off this horrible time bomb? Who was watching the store?

Like Narragansett, other towns also operate in an environment heavily exposed to corruption. Such towns are allowing the very same people responsible for negotiating wage and bargaining agreements with the same unions who the managers have systemically underfunded and can never pay. Often the same town manager or finance director, who gave away future benefits and swept them under the rug, also negotiated raises to the same unions and raised benefits again.

Ignoring the problem

In Narragansett, Councils and financial managers—through agreements—spent years not even charging a co pay for health insurance. But as long as taxpayers didn’t get hit directly in the wallet, then everything was fine. Both sides occasionally colluded, management and the unions and towns refused to fix the problem. In 2006 a frustrated Town Council passed an ordinance that injected $1 million into the under-funded town pension plan. Local activists and concerned union members convinced council members that the plan’s unfunded condition was a real problem. The council passed the ordinance 5-0. However, no money was ever put into the plan. The town manager simply ignored the unanimously passed ordinance and the plan has continued to operate like a pay as you go plan since 2002. The Narragansett council then fell under pressure from the bad publicity and fired that town manager.

Narragansett is currently on its 4th town manager since 2008—with each manager saying pension funding was a priority. Narragansett, once 100% funded in the late 1990s, is now in critical status and has finally proposed real reform to the pension study commission. The question now, as before, is what if they do not follow the ordinance that they passed? Is there a penalty? Do they view the Pension Commission as having any power? Is the whole Commission a toothless sham? Why hasn’t West Warwick ever issued a specific plan? What will happen if they don’t?

We have all seen the King of “consensus and Can-kicking “ Lincoln Chafee throughout his career, so tt’s hard to believe that this pension commission, which reports to the Governor, will do anything but run out the string in 2014. Towns will deteriorate in the meantime especially if we have difficult financial markets .So reality may hit sometime later, with actual vendor complaints about city payments or delayed checks to workers or IOU’s such as was seen in California. Unlike Providence, Narragansett has plenty of room to tax citizens, but is that the right solution? My blog, rishrugs.com, shows a single page from the Narragansett Finance Committee power point presentation in 2012. It describes just one worker in Narragansett and the town’s cost and obligation to that one worker.

The media coverage

Now just one word about RI media: Troubling. Even the part of the media that claims to focus on pensions, has delivered both good data and bad data. This is sometimes accompanied by good analysis and often bad analysis. One outlet has an interactive map, which shows Narragansett’s pension Liability as a little over $1 million. This map has been up on their site for a month. I told everyone it was using wrong numbers. Narragansett’s own actuary (that people should know by now to question) shows $42 million in Unfunded Pension Liability. I show much more than $42 million using Moody ‘s and GASB metrics. Either way $1 million is just a huge mistake.

Where do we go from here?

My goal, in addressing the pension and OPEB crisis, is to inform and to enlighten. My hope is that voters will reject those elected leaders who have acted without integrity to harm the very same communities they represent. If those officials are not part of the solution, then they are part of the problem. There is an election approaching in November 2014. It would be appropriate to ask candidates what they have done about the pension issue in their towns specifically. If they are in a critical status town, like Narragansett, ask them what do they intend to do?

Most towns have come to realize the benefits they have given away are enormous and unsustainable. Taxpayers should speak up and tell the elected few that this game is over. Unions, elected officials, and a taxpayer representative should sit down and agree on a plan because the Pension Study Commission is probably out of business for the next 8 months.

Each town has to look at revenues and whether benefits are too high. Here is a sample of just one employee in Narragansett. Look at his/her contribution versus the compensations. Tell me why we can’t adjust this.
















Michael G. Riley is vice chair at Rhode Island Center for Freedom and Prosperity, and is managing member and founder of Coastal Management Group, LLC. Riley has 35 years of experience in the financial industry, having managed divisions of PaineWebber, LETCO, and TD Securities (TD Bank). He has been quoted in Barron’s, Wall Street Transcript, NY Post, and various other print media and also appeared on NBC news, Yahoo TV, and CNBC.


Related Slideshow: Providence Pension Liability

A new report shows that Providence’s pension fund—even after the recent reform—is still in trouble. The below slides break out the key numbers for the pension fund, including the unfunded liability, the assumed and actual rates of return, the current level of benefits, and how long it will take the city to pay off the unfunded liability. Figures are current as of July 1, 2013 and are taken from the new Jan. 31 actuarial report from Segal Consulting.

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Unfunded Liability in 2013

Total Liability: $1.2 billion

Actuarial Assets: $380.4 million

Unfunded Liability: $831.5 million

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Unfunded Liability in 2011

Total Liability: $1.2 billion

Actuarial Assets: $380.4 million

Unfunded Liability: $831.5 million

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Percent Funded in 2013

Funding Ratio: The ratio of the amount of actuarial assets to the amount owed.

Funding ratio in 2013: 31.39%

Percent unfunded in 2013: 68.61%

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Percent Funded in 2011

Funding Ratio: The ratio of the amount of actuarial assets to the amount owed.

Funding ratio in 2011: 31.94%

Percent unfunded in 2011: 68.06%

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Rate of Return

Former Assumed Rate of Return: 8.5%

New Assumed Rate of Return: 8.25%

What the state’s assumed rate of return is: 7.5%

What Moody’s Investors Service says the assumed rate of return should be: 5.5%

What investor Warren Buffet says the assumed rate of return should be: 6%

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Actual Return on Investment

Actual Market Return in FY 2012: 1.49%

Actual Market Return in FY 2013: 11.35%

Current Assumed Rate of Return: 6.42%

Average Market Rate of Return for FY 12 and FY 13: 8.25%

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Impact of Lower Rates of Return

$72 million:The city unfunded liability increased by this amount when the city lowered its assumed rate of return by a quarter of a percentage point, from 8.5% to 8.25%

$506.2 million: The estimated increase in the unfunded liability were the city to use the 6% assumed rate of return recommended by Moody’s Investors Service.

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Retiree Pay – Fire and Police

Number on Active Duty: 834

Average Annual Pay: $61,325

Number of Retirees: 587

Average Retiree Age: 65.3

Average Retiree Annual Pay: $40,512

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Disability Pensions – Fire and Police

Number on Disability: 418

Average Age: 64.8

Average Annual Pay: $59,028

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Retiree Pay – Other City Workers

Number of City Workers: 2,164

Average Annual Pay: $38,687

Number of Retirees: 1,453

Average Retiree Age: 72

Average Retiree Annual Pay: $18,252

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Disability Pensions – Other City Workers

Number on Disability: 88

Average Age: 66.8

Average Annual Pay: $18,684

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Current Cost of Pension Fund

For 2013

City Contribution: $58.1 million

Employees Contribution: $10.9 million

Net Investment Return: $18.1 million

Cost of Retiree Benefits: $95.4 million

Note: Net investment return is the return on investments after investment and administrative fees have been paid.

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Cost of Pension Fund in 10 Years

Normal Cost: $9.8 million

Additional Cost Because

of Unfunded Liability: $84 million

Total Annual Cost: $94.3 million

Note: Total figure for the year includes a small second payment for the deferred liability.

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Cost of Pension Fund in 20 Years

Normal Cost: $13.9 million

Additional Cost Because

of Unfunded Liability: $118.5 million

Total Cost: $132.4 million

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Paying Off Unfunded Liability

Average annual increase: 3.5%

Number of additional years to pay off: 27

Fiscal year unfunded liability to be paid off by: 2040


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Michael, where can someone go to find out where their town stands in regard the ARC and all the other metrics for these obligations?

Comment #1 by craig evans on 2014 02 25

$3 MILLION PER EMPLOYEE???? There is no way in H*LL any town can afford this! And the Treasurer wants to settle with labor and cut funding to towns even further? We're all screwed.

Comment #2 by Jeffrey Brown on 2014 02 25

Well see what we've done, we let these people give away our futures, and now we have to live with this. Now if any of us private sector people put away 149k by age 47 we would not be retiring. Of course they aren't really either, just collecting and getting another job. Why don't we just treat public sector like private sector, why do they get this kind of benefit? Wait, I know the answer, because they elect the people who promise these unsustainable things, and then wail that they should not be penalized since they are only a lowly public employee, a fellow union member and supporter of all things Democratic. We are all screwed, but keep electing nothing but Dem's people, maybe next time they'll get it right.

Comment #3 by sasc voter on 2014 02 25

this report is one of many over the last decade.
http://webserver.rilin.state.ri.us/SenateFinance/special_reports/municipal pension report.pdf

the last column is a very good metric that we looked at in my Stanford course. It measures the combined ARC"s Payments relative to the annual tax levy. This shows how much burden on taxpayers there is from past under-funding of obligations such as health care and pensions.Obviously these payments crowd out the costs of essential municipal services in the current year.

Central falls reached over 50% before bankruptcy see chart on page 15....this crowding out effect is now being felt statewide ... and will worsen without large benefit cuts and/or tax increases....citizens should not have to sacrifice basic services due to overly generous health care and pension promises made by politically conflicted leaders.

Comment #4 by michael riley on 2014 02 25

In Rouges Islnad, the "political class" wouldn't bandage a severed artery for you without a campaign contribution and a court order. Do the right thing if you aren't ORDERED to.... why, we have relatives to hire and undeserved raises to award. Don't bother us.

Comment #5 by G Godot on 2014 02 25

Mike your calculations above are way off. do the math, you are saying the above individual will be making 65 thousand dollars for the next 33 years? Bull shit! you are also saying that that same person will be spending 31 thousand on health care for the next 33 years? Bull shit. First of all, that person above would have to be a police officer or firefighter. so the pension would be no where near 65 thousand average, even if he or she had a COLA. Secondly, since this individual is going to medicare at 65 this individual would have to have 60 thousand dollars worth of healthcare spent by the town. Again Bull Shit. Even if this person retired with about 40k if they were lucky, no cola kicks in for 23 years so only a cola for 10 years and he would still be nowhere near 65 thousand even at eighty. The rest of you don't have to believe me, just do the math, sorry michael it doesn't work.

Comment #6 by Stephen DeNinno on 2014 02 25

@Stephen-can we see your math? I, for one am curious and would like to see both sides of the argument. Do you mind telling us if you are involved in the police or fire in our state, so we can understand how you know how this works?

Comment #7 by sasc voter on 2014 02 25

Stephen this is about the tenth time you have questioned the math..you are o for 9 ...in this particular case this slide was not prepared by me as I clearly stated in the above article ..it was prepared as part of the Narragansett Finance Committee presentation at a town working session..this was slide # 15 ...so save your bs for the moment. obviously this was public safety as no one on the planet gets to retire 20 and out..whats your point? lets work through the math together ...btw i thought you claimed both the city and the employees knew what they were promised and what was given away and therefore the math... if numbers werent agreed upon .,,,, then no contract,,,.. no meeting of the minds

Comment #8 by michael riley on 2014 02 25

Sarah, first it has to be a fire or police because state employees cannot retire until 60 or so. As for the math divide 2,159,784 and divide that by the 33 years on the pension. Also take the OPEB figure and divide that only by 17, thats the age of Medicare. You will see those numbers are ridiculous. This inflation of facts or supposed facts, are the reason we fight for what we negotiated. BTW I am a retired Providence fire Captain. I have been retired for 9 years and make about 47K. A firefighter or police officer would only have about 20 to 25 years at that age and would collect about 50% to 56%. BTW OPEB is health care period. And since many cities and towns are self insured, it is no where near these outlandish figures. My healthcare for example, my wife and myself have used between 10k and 12K for the whole 9 years so about 1300 a year. No where near the 23 thousand they tell people.

Comment #9 by Stephen DeNinno on 2014 02 25

Michael you put the slide up not me. In fact you are inciting the comments above and their false! What is this the 15 time I told you about Medicare???? And the OPEB is a fictional figure?

Comment #10 by Stephen DeNinno on 2014 02 25

Mr. Riley:

Are you announcing your candidacy for Town Council this year? Narragansett used their cost savings from employee's skipping pay raises for benefits like a credit card. They have been paying the minimum balance for years as you have indicated. Current public safety employees have made concessions with 2 municipal worker unions still to negotiate plus a school dept union which the Council has no control over. Even in light of the problems you accurately state, the current council ignored even Mr. Kerbel's recommendation to put in more money. The plan given to the State is a great work of fiction not destined for the NY Times best seller list. My friend who is a Narragansett retiree took part in the retiree discussions last August. Not a peep since.

Comment #11 by Gansett Proud on 2014 02 25

I always knew there was a catch when the politicians would campaign on how great a job they were doing keeping the tax rate so low compared to the level of service vs. the rest of RI. Now I know why. I would have gladly paid the real bill vs. what is coming.

Comment #12 by Gansett Proud on 2014 02 25

You forgot to mention that fired Town Manager moved about 35 feet down the hallway to keep his Town Engineer job and got to join the Town pension plan like the award winning Finance Director who controlled the pension board finances.

Comment #13 by Gansett Proud on 2014 02 26

no thank you for town council and I know that the Manager from 2006 to 2008 was moved back to town engineer
not sure what kerbel tired but no money was put into pension plan

Comment #14 by michael riley on 2014 02 26

no thank you for town council and I know that the Manager from 2006 to 2008 was moved back to town engineer
not sure what kerbel tired but no money was put into pension plan

Comment #15 by michael riley on 2014 02 26

So Stephen in working together through the model since i dont know who the employee is or EVEN if they modeled someone hired in 2008 for example... lets assume model 2008..... by contract his pensionable salary includes sick pay buybacks,holiday pay, longevity etc can you gives us an estimate of how much that would add to the pensionable salary? lets assume base bay 1050 per week and 3.5% raises every year after. Lets say he works 25 years and is 22 ..retiring at 47 ...pension compensation is the average of the top 3 years including sick pay buyback, holiday time,longevity, vacation accrual .....base pay alone in years 23 , 24 ,25 averages over $120,000 ill wait for the percentage kicker estimate from you on longevity , accrual ,holiday etc

and we can continue with the math

Comment #16 by michael riley on 2014 02 26

Michael, you cannot use the 2008 figure unless you change the figure the person paid in themselves. That figure is def. not based on someone hired in 2008. I was hired in 1979 and after 27 years paid in 148K. So if you are using those figures, which are someone like me. You also have to use the other figures for someone like me. This is where we will disagree again. The slide, shows the employees contribution which is very much like mine, 1979 start. Anyone starting in 2008, that figure would go up by your 3.5% average. BTW. In 27 years I only had two raises over 3%. In fact in the decade of the 90's when the average private sector raises were in the 4-5% range, we averaged 1.8% and went 3 years without any raise. All because they used the pension and health care over our head. Can I get those raises back? After all they took my health care and COLA away.

Comment #17 by Stephen DeNinno on 2014 02 26

turns out your math is wrong yet again and if i were inclined i might throw a BS flag on you saying you had 2 raises in 27 years ...private sector raises ? seriously..do you want the answers or do you want to be obtuse..we can work through the numbers it is easy to figure out salaries if we know total contributions and contribution rates just moved to 9.5% i believe in Narragansett from 8.5% .....also the whole point of these discussions are unfunded obligations what are we going to owe for our promises in the future? you keep talking about your raise and keeping things. I understand this is personally upsetting to many.We are trying to shed light on the issues. So if that slide or the real math makes it look like you put in a very small amount compared to what you received, and its true, it weakens the whole "feel sorry for the downtrodden" schtik and from a retirement standpoint puts you in the 1% er category in your town. Dont look for a whole lot of sympathy.

I have several times said for retirees with less than a certain amount of income, it would be morally wrong to touch anything they are getting...but for new hires , active workers etc...the rules have to change or the system collapses

Comment #18 by michael riley on 2014 02 26

Mike, stop twisting my words. I said, I only had two raises over 3.5% in 27 years. I didn't say I only got two raises in 27 years. But if the figures are lies, which that slide is like a car salesman, you must use correct numbers for every part of the calculation. Do you see what I mean? I know there is a problem, but we are the only ones paying. Providence, like Narragansett, did not fund the system, who knows where we would be today and what the payment would be today if every mayor or town manager did their due diligence. That slide (Ok it's not yours) is inflammatory, and it is categorically false. Using numbers on someone that will retire in 22 years, you also have to figure what the private sector will be worth in 22 years. Another issue I have Mike is the fact that even though MY money was invested, I did not receive the returns of the Providence pension system. I was given 5% on my money while the city in many years returned 20-up to 32%. They often used these figures to NOT pay anything into the system, and claim a surplus. This seemed to coincide with an election cycle. What's the odds? I have the past returns of the pension system for my entire career. BTW when city took control of pension investment, returns dropped and Buddy's Campaign fund grew like crazy. What's the odds? Lastly, when we took Buddy to court to force him to pay (as far as I know we were the only union to do this) the decision was written by Flanders...No law saying city must pay, beside no one has been hurt or cut so this is moot. Come back when someone is cut. So yes we are coming back.

Comment #19 by Stephen DeNinno on 2014 02 26

you have so many things confused and bad math this is turning counterproductive...you deftly avoided giving me an estimate for perks that are included in pensionable salary(see Johnston on pension spiking) so i guess we wont actually get to work through the math ....i hear your frustration ..and scattered villians...the whole point is ...its not to smart for RI cities to be in the business of pensions..they dont have to be.......manage your own like the rest of us.

"Another issue I have Mike is the fact that even though MY money was invested, I did not receive the returns of the Providence pension system. I was given 5% on my money while the city in many years returned 20-up to 32%. "

that little aside is my clue to exit stage right...It indicates a HUGE understanding gap ....when you are ready for math and reality/...let me know

it will likely be a long session ...

Comment #20 by michael riley on 2014 02 26

Michael, It has become obvious to me that your whole presentation here is to inflame the public. The only thing that went into my pension is longevity. I do realize that other departments have other things added to their pension total. But I cannot speak for them. As far as sick days is concerned, I did get paid for unused sick days. we can only get paid for 6 weeks vacation. The vacation would have been taken anyway, and it just delays your retirement date. Sick day calculation will and does save the city money. In 2005, if i called in sick on a 14 hr night shift, the cost to replace me in OT was over 500 dollars, they paid me 140 dollars for each day. The worst case scenario is someone who never takes a sick day in their career. They may get a big check at the end. As far as understanding the percentage gap, don't worry Mike I understand it. It just makes it easier to screw me out of my pension by telling people my contribution is only 148 thousand, when in reality, with the returns during my employment it would have been a lot higher. As with a 401K I would have been able to possibly live for the rest of my life with those returns. At one point I had 100K when the system returned 28%. The next year I had 105K instead of 128k so all returns went toward THE CITY'S contributions. Here is where I agree with you, we need a defined contribution plan but not a 401K type plan. We need a new type plan where retirement is secure and fees are somewhat normal. This plan must also encompass a disability clause. We do after all have negotiating power. Lastly All I asked was to use the proper figure in calculating the liability. I only stated if that is wrong, the entire equation is wrong. Again, I do appreciate you bringing this problem up to the public, but I wish you would do a little more research into the unfunded part and why the cities or towns didn't pay in, and what would be due today if they did. this includes cities and state borrowing from system and what that cost was to returns (Sundlen and Cianci). It is so much more complicated than this is just too expensive.

Comment #21 by Stephen DeNinno on 2014 02 26

Thank you both for trying to get to real numbers- I agree with you michael, why aren't public employees treated the way private sector employees are? Manage your own 401k like the rest of us. If we had only contributed 148k into our 401k we would not be retiring after 20 or so years How could you live on that? What kind of return do you think you get real world? As for raises, my husband has gotten 2-4% in the last 20 years, as a professional engineer working very long hours and not getting sick pay, longevity, show up on time bonus pay and other things that make all of us taxpayers crazy when we hear them. Its time we put an end to pensions, there is a reason private companies did, and the same reason applies to public employees. Many many private people work more,make less and still have to fund most of their own 401k and if the returns aren't great we have to suck it up and keep working.

Comment #22 by sasc voter on 2014 02 26

im glad both Sarah and Steven care enough to speak out,. We cant just do nothing and crash our cities... Defined benefit plans can work..but Rhode Island has had some disasters...politics are a major factor so is incompetence and hiding the truth...

we can get to an answer we can manage pension with out huge risk to anyone....we have to agree this problem is real and hold people accountable and there is still a great deal of denial and a sickening lack of action.

When mayors deliberately use accounting measures that are being changed by major rating agencies due to the inaccuracy of those measures, we can only assume the Mayor wants to be inaccurate, he wants to "paint" a picture...sound familiar? happens all the time in the private sector the result can getting fired or going to jail.

Comment #23 by michael riley on 2014 02 26

Sarah, I can't believe someone would work 20 years for a company, and not have any sick days? This I find more disturbing than the fact that I did have them. This is why I feel more and more people are attacking our public safety personals pension and benefits. The private sector's lack of any responsibility for anything has shocked me. The end of pensions, the end of matching 401Ks, the end to company paid health care. This is the time I feel the private sector should be unionizing. Time to get some of the benefits back that were the norm in the 60s and 70s. Good pay, paid time off, sick days, all make for a happy and productive workplace. Instead, we have CEOs cutting 401 k matches because a couple of employees had sick babies. This same CEO makes 12 million dollars. Years past, you didn't see these things happening anywhere. And when we, as your public servants, try to get a little we are lambasted. When did working for a city or town, risking your health and safety, gets excluded from the American dream? Workers from private and public sector need to pull together to lift everyone up, not drag everyone down. What I see now is rich financial industry people, actively working to cut my benefits, to enrich themselves, and they are swaying the other working folk to follow their lead. Peace

Comment #24 by Stephen DeNinno on 2014 02 26

Stephen, it would be great if the private sector could easily set up a union shop and demand the return of some "perks" that have recently disappeared. Unfortunately it is too easy for the big businesses to just open shop overseas. Is this because of NAFTA? Possibly. Regardless, there are a lot of things that need to change, the first being reducing the ease in which a company can relocate anywhere out of the U.S.
FWIW, the company I work for still matches 401k contributions, as did the company my wife worked for....before she got laid of due to "head count reduction".

Comment #25 by Patrick Boyd on 2014 02 26

It has always been this way, public sector gets one treatment and the private sector and primary tax payers , another. No, my husband gets to claim short term disability if he needs it, it is 60% of his pay, and that is pay, it does not get bonus money of any sort figured it. I understand for those who have been told they can have all this, there is a lot at stake, but honestly who do you know in the private sector who has the same level of education as a police/fire personnel and makes enough money and pension to retire after 20 some years of work. I understand that the money you contribute appears to have grown more than you put in, but until it is taken out it is an unrealized gain,, so we have had a few years where our 401 did well(say 10% or so) and we had many that took a real chunk out of our retirement funds. That is how it works now, my husbands company does match a small percentage, and that is still common for many in his industry. I wish I could see how they made 28% return, I mean wow ,I have some family in the investment business and I have to say that is not something we have ever gotten. It is very frustrating as a taxpayer to see the people in unions elect the same people year after year who made the same unsustainable promises and kicked the can down the road now say we are penalizing them. The choices you made in the voting booth sealed all our fates.

Comment #26 by sasc voter on 2014 02 26

By the way I am happy to see a real discussion going on here, so refreshing to find people able to give opposing points of view without going down the name calling path that so many political and financial conversations seem to go nowadays. Thank you all for this.

Comment #27 by sasc voter on 2014 02 26

Patrick, Sarah, this is where the 1% elite have led us. It is not a Democrat thing or a Republican thing, it is what is good for the richest of the rich thing. They own Washington and both parties. NAFTA was started by a Democrat, this was the beginning of the end of workers rights in the USA, both union and nonunion. Then it spread under Bush to just about the rest of the world, and even giving tax breaks for American corporations to move overseas. Now my final thought, What does the future hold for the middle class? I am even talking about millionaires. The American dream, where you can start with nothing and become a billionaire is dead. Most money is old money, even the Fords, Waltons, and almost every other super rich inherited their money. Very few like Microsoft founder or Apple founder will ever see the gains like that again. The rich have won the game and the day. Are we going to get our share? I doubt it. Most of the gains in the last 20 years have been he top5% . PS Sarah, I have a degree in Organic chemistry, and at least half of Providence FD have advanced degrees, and not fire science. I have my synthesis to finish my Masters. Also I competed with 2000 applicants for one of 57 jobs.

Comment #28 by Stephen DeNinno on 2014 02 26

Mr. Riley:

Are those Narragansett "starting new plan" documents available anywhere? Talking to a retiree, it has now been six months since any communication with retirees although, there have been statements in the media that they are? What do you propose to do with retirees who gave up pay raises have have continuous contract language as to their retirement benefits? Just curious. One of those former Town Manager's who wasn't a local insider proposed a bond issue to right the plans. That quickly vanished almost as quickly as that TM since he didn't play ball with the Council.

Comment #29 by Gansett Proud on 2014 02 27

Mr. DeNinno:

The retiree case that Mr. Riley used from that powerpoint may not have been anyone in Public Safety. For several years, municipal workers got a 20 year pension regardless of age at a lower contribution rate that police and fire. I know some people were pretty upset by that. Not sure what they gave up to get that, but I see that is no longer the case in a contract on the Town's website. Still that example only applies to about half of Narragansett retirees. Many have no COLA and some lose their healthcare at age 65 which is not reflected in that total cost number.

Comment #30 by Gansett Proud on 2014 02 27

Gansett Proud...you made some very good points. I have attempted to ascertain exactly where Narragansett is in terms of the funding improvement plan that they submitted to the Municipal Study Commission. Frankly ,a commission so named, should be updating the status for every critical status community.It s very confusing to figure out what is actually going on in each community. In Providence consent decrees and ordinance changes were used to implement the recent reforms. That appears to be the path for reform in order to avoid receivership.
Its not clear whether the towns ,like Narragansett,self proposed ARC payment schedule will be kept. This would be highly irresponsible but consistent with Narragansett council history. So now Narragansett has a yet another new town manager and a new finance director. Presumably they are both aware of what the town proposed to the commission. If Narragansett actually pays its ARC in 2014 as is the current law it will be the first time in 13 years.
Narragansett Citizens deserve to know the status of reform.Retirees and active employees deserve to understand the facts and timing of the reforms.

Comment #31 by michael riley on 2014 02 27

I am opposed to the idea of pension obligation bonds.However as part of real reform package that includes closing DB plans to new hires it is a potential solution for Narragansett.

Comment #32 by michael riley on 2014 02 27

Nice to see Gregg at the Belo put the LIE to the broken record from the union bosses that "Sundlin 'looted' the pension system". I know they didn't like Bruce, he couldn't be bought OR threatened.

Comment #33 by G Godot on 2014 03 01

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