Ward Addresses Raimondo, State Leaders at Pension Meeting in Warwick

Warwick - Woonsocket City Council President John Ward may have been one of the few city council members among the many mayors and town administrators that attended the League of Cities and Towns' meeting with Gina Raimondo on Wednesday morning, but he made his presence felt.

Ward, who also serves as the finance director for the town of Lincoln, provided his insight on pension reform to the group assembled at Warwick City Hall.

“Our problem, to give you a sense where Woonsocket is,” said Ward, “in 2013 our levy would have to increase by 10.5 percent just to cover the pension obligations.”

He detailed the , the school bond obligations, and the fact that the city has had to make spending cuts despite raising taxes “year after year after year.”

“We can’t keep doing this and expect to survive,” said Ward.

At the beginning of the meeting, General Treasurer Gina Raimondo remarked that “we are fighting for the future of our state,” and stood before city and town leaders who are all facing significant increases in state pension contributions over the next two years and told them, “I don’t believe you can afford that bill.”

A document was provided detailing the estimated increases in city and town retirement contributions for the next two fiscal years. Over the next two years, Woonsocket’s contribution to the state pension plans for police, fire and teachers is scheduled to increase by 92 percent or $5.9 million.

A number of leaders spoke on the issues their communities faced. Cranston Mayor Allan Fung noted that these reforms must also aid municipal pension plans, which are outside of the state-plans and therefore the legislature's reach, but face a $2 billion unfunded liability. Pawtucket Mayor Donald Grebien thanked Raimondo for her work. And Warwick Mayor Scott Avedisian advised those gathered that this is "truly the most important issue we are facing at a very unique moment."

Ward said two important reforms would be to set an age at which public safety employees could start collecting benefits and calculate benefits from the average salary over a career rather than the average of the last 3 years.

“Nobody should be able to get a retirement until they reach a retirement age,” said Ward. “Retiring at 42 and collecting a 50 percent pension for the next 45 years just isn’t reasonable and isn’t sustainable.”

Currently police and firefighters are able to retire after 20 years of service and begin collecting pension benefits immediately. One reform being considered is to allow them to be eligible for a pension after 20 years of service, but only allow them to start collecting it once they reach a certain age, such as 65.

“If you’re going to calculate a pension,” Ward said, “Base it on the average [salary] of a person’s entire career. The rank and file tend to be a smoother income stream. If you recalculate the retirees’ pensions then [average employees] will be less affected than those people who got the big contract at the end--one promotion for five years, and ended up with a big bonus in their pension that they never contributed to over the course of their career.”

He used the example of a former Woonsocket school superintendent, Maureen Macera, who served the city from 2005-2008. By satisfying a 3-year contract she was able to bump her pension benefits up by $30,000 per year despite only contributing at that level for 3 years.

He said that during that 3-year contract she contributed between $14,000 and $15,000, but as a result of it will receive over $1 million in pension benefits during her retirement.

“She’s not to blame,” said Ward, “But her experience is just an example,” of one of the problems of the pension system.

Raimondo was taking notes as he spoke. Afterwards she said, “I can’t emphasize how valuable that is to me.”

As Raimondo was wrapping up the meeting she told the municipal leaders, “Whenever I’m in a lot of stress, I think about people like you… and how tough it is for you on the front lines.”

“The day we fix this problem,” added Raimondo, “We’re going to get a giant sign for Rhode Island saying, ‘We’re open for business.”

Raimondo said her staff is working diligently to provide the General Assembly with recommendations on pensions when they meet for a special session in October so that changes to the state system could be done legislatively.

Ward said he was attending the meeting because Woonsocket Mayor Leo Fontaine couldn’t make it.