I’ve been reading the final report [pdf] of the R.I. Senate Municipal Pensions Study Commission, which was released yesterday. WRNI’s Ian Donnis had highlights from the press conference where it was unveiled.

There’s not much new in the 23-page document for those of us who cover the issue of government retiree costs closely, but I did find this striking (emphasis mine):

Municipal pension benefits are provided through either the State-run Municipal Employees Retirement System (MERS) or through locally-administered plans. Currently, the State of Rhode Island administers MERS for approximately 110 municipal pension plans for approximately 30 municipal governments. Thirty-six non-MERS pension plans are locally-administered by 24 communities.

Thus, according to this report, Rhode Island’s 39 cities and towns have established a total of 146 different pension plans among them – an average of more than three plans per municipality. Some places have separate plans for general government workers and police and fire personnel. Then there are plans for water districts, housing authorities and other groups.

The total number sure seems like a lot. But Dan Beardsley, executive director of the Rhode Island League of Cities and Towns, told me the number of different pension plans isn’t actually at the root of the problem.

That’s because all 110 of the plans in MERS pool their investments and administrative costs and share the same benefit structure. And MERS is 88% funded, with $1.2 billion in assets and $1.3 billion in long-term liabilities; actuaries say 80% is generally enough for a government pension plan.

The real problem, then, lies in those 36 locally administered plans. They have $1.4 billion in assets but $3.3 billion in liabilities – a net unfunded liability of $1.9 billion.

“It’s the dramatically different benefit structure of many of the private plans that are causing communities not to be able to meet their annual required contributions” to their pension funds, Beardsley said.

Those 36 plans are scattered through many of the state’s most fiscally squeezed cities, including Central Falls, Cranston, East Providence, Johnston, Pawtucket, Providence and West Warwick.

So the big question is what’s going to happen to those 36 plans. The communities in question are not allowed to dump their accumulated liabilities into MERS – although it’s possible that could change. Will cities and towns just suck it up and plow taxpayer dollars into these pension funds until they make them whole?

Beardsley, for one, doubts it. “I think many of the problems are going to necessitate major overhauls of the system, of the present benefit structure,” he said. “The liabilities are unsustainable.”

But aren’t those promised benefits protected by law and basically unchangeable?

“It will be difficult, because there will be costly litigation involved,” Beardsley replied. “But that’s not to say it shouldn’t be attempted.” He expects to see municipalities start moving to overhaul promised benefits as soon as this year – and huge lawsuits to follow.