Local 1033 wants out of city pension system; Taveras opposed

March 13th, 2012 at 6:00 am by under Nesi's Notes, On the Main Site

Taveras and Iannazzi

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – The biggest municipal union in Providence wants out of the city pension system.

Donald Iannazzi, business manager for Local 1033 of the Laborers’ International Union, is pushing Mayor Angel Taveras to let his members out of the city’s severely underfunded pension system, saying they shouldn’t get the same treatment as police and fire retirees in light of sacrifices they’ve made already.

In a Feb. 29 letter to Local 1033′s retirees, Iannazzi suggested “separating the [Providence] Retirement System so that the money, invested by our members and the city for our members, can only be used to pay benefits for our members.” The city’s pension system currently pays benefits for all City Hall, police and fire retirees out of one commingled pool of funds.

Iannazzi confirmed the letter’s authenticity on Monday. ”Providence is incapable of managing its own pension system,” he told WPRI.com. “I think that has been proven over time.”

Taveras met with Local 1033 officials last month and rejected the proposal to partition the city pension system. “As we have expressed, Mayor Taveras is opposed to making that move, which would not solve Providence’s pension problem and, if anything, might make it worse,” spokesman David Ortiz told WPRI.com.

Union may call on lawmakers

Iannazzi’s proposal could have a dramatic impact on Providence’s pension system – which was only 32% funded as of June 30 – by draining it of assets. Local 1033 retirees’ average benefit is $26,200, excluding tiny midcentury pensions, and few receive cost-of-living adjustments, or COLAs. The city also contributes to both Social Security and a union-run pension plan for them.

The union’s “fallback plan” is to ask the General Assembly to pass legislation moving Local 1033 out of the Providence pension fund and into the state-run Municipal Employees Retirement System (MERS), an idea Iannazzi already floated in November.

“While the state system has implemented significant reductions on future accrual and suspended COLAs, at least we know that the state system will be in existence for many decades ahead,” Iannazzi wrote in his letter. He criticized Taveras for at first refusing to meet with 1033 to discuss the plan and then rejecting it.

Treasurer Gina Raimondo “is interested in exploring viable options” to move locally run pension plans into the state-run system, spokeswoman Joy Fox told WPRI.com. “However, she has said all of these plans are unique and complex. Proper study and analysis is required to determine if moving into MERS is appropriate for these plans.”

‘Doing too much, too fast’

Iannazzi expressed exasperation with Taveras for using “the ‘B’ word” – bankruptcy – at a press conference last month, less than a year after signing a new contract with Local 1033 that included concessions. ”If you can find me the Angel Taveras of March of 2011, we can deal with this very complicated issue and real issue,” Iannazzi said.

“I have suggested to [the mayor] that he and his people are doing too much, too fast, and that is leading to compounded failure,” Iannazzi said, pointing to police and fire retirees’ recent legal victory blocking the city from moving them to Medicare. He noted that Local 1033′s members first agreed to use Medicare back in 1986.

Iannazzi dismissed Taveras’s call for retirees to negotiate a deal by May 1. ”If somebody thinks we can have a grand fix to Providence’s pension woes in 45 days, then that’s not serious thinking,” he said. Iannazzi also said he has the legal authority to negotiate on behalf of 1033 retirees because nearly all of them remain union members in retirement.

In his letter, Iannazzi said Local 1033 has been pushing for pension reform in Providence for at least 15 years, pointing to a series of concessions his members have made: reducing the benefit accrual rate from 2.5% to 2% in 1996; raising the retirement age to 60 years old; and requiring a minimum of 30 years of work to get a pension.

Police, fire on their own

“The fact remains that all of these changes were implemented for Class A members only and the city, including Mayor Taveras in his 2011 contracts with police and fire, continued to ignore the drain on Providence’s Retirement System and not take stern and necessary measures,” Iannazzi wrote.

“I’m the first to profess I do not know what the get well-plan is for Class B, for uniformed officers,” Iannazzi said Monday. “I leave that to my sisters and brothers who represent Class B actives and retirees to come up with that get-well plan.”

“I am not going to attack Class B members – they need to come up with their solution,” he added. “I have full confidence in their leadership, both active and retired. But I will take every action that is required to responsibly meet the needs of our members and the security of our retirees and active work force. And if that requires legal action to partition the system, then we will do that.”

Local 1033′s leaders declined to attend Taveras’s high-profile town hall meeting with city retirees earlier this month. “We will not accept the mayor’s unilateral ‘get well plan,’” Iannazzi wrote in his letter, because in addition to “suspending the ridiculous COLAs granted to police and fire retirees,” Taveras wants to change health coverage for retirees.

“We will not agree to implement the mayor’s perceived cure, do it without a comprehensive plan and work out the problems after real people suffer adversely and unnecessarily,” Iannazzi wrote, adding that the city “recklessly” mismanaged some retirees’ medical coverage recently.

Iannazzi emphasized that point again on Monday: “We will not change health care for retirees outside of collective bargaining, and I cannot say that any more sternly or seriously.”

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi

(photo: City of Providence)

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27 Responses to “Local 1033 wants out of city pension system; Taveras opposed”

  1. Downsized54 says:

    Ianazzi he is the one with the son stealing taxpayers money to what 90 grand a year.Where can I get a do nothing job like that??Honestly I would not sleaze off the taxpayer.

  2. The push to move municipal pensions to a state plan is simple: A city can file bankruptcy; a state cannot.

    Unfortunately moving the unfunded pensions to the state level won’t make the money to pay them appear. I suspect it will result in a Supreme Court case on state level sovereignty.

  3. bunchoffools says:

    I hope they are succesful at getting out. These guys are really getting hosed by theft of the Providence pension system.

  4. Common Sense RI says:

    The real story here is the cracks appearing in the union “unity” facade. Local 1033 pensions are not exactly over generous even if they need some trimming. Iannazzi was careful in his words but reading his comments you can’t help but think that he is really saying “while my guys have tried to be reasonable over the years those damn stubborn cops and firemen robbed us all blind.”

    The first comment is correct though. He is really trying to avoid bankruptcy.

  5. GaryM says:

    This is not as easy as it seems. Local 1033 has to overcome the IRS Exclusive Benefit Rule to pry out their portion of the pension plan assets from the Providence Retirement System pension trust fund. That may sound like simply setting up a spreadsheet and cranking out some % numbers, but it’s not.

    The Pension Trustees are the final decision makers on this (you know, the same people who created this mess in the first place). Everybody has to agree and that is the problem.

    They have a long way to go before this idea has legs.

  6. Govstench says:

    Where is the brotherhood here? Now the rats are jumping a sinking ship and 1033 wants to pull their members. What a joke these public unions are.

    1. Cosmo says:

      My term would be useless tax sucking leeches, but you’re right, they do add an element of humor. All public employee unions should be banned by law.

      1. bunchoffools says:

        Agree 100% at the very least CBA between labor unions and governments should be banned.

  7. Art says:

    Couldn’t Don tap son Stephen Iannazzi’s juicy $90,000 crony salary as a legislative aide at the statehouse to cover the union’s pensions?

    1. Cosmo says:

      Are you trying to imply that he isn’t worth 90k? For shame LOL.

  8. Tough Love says:

    Give the workers a pension, (expressed as a percentage of pay) no greater than the average City Private Sector Taxpayer …. adjusted downward for the collecting at ages earlier than those Private sector taxpayers (generally age 65).

    Do THIS, and you’ll likely find the Plan OVERFUNDED …. because That’s how ridiculously excessive it is compared to what Private Sector taxpayers get.

  9. Al Moncrief says:

    CHECK IT OUT RI RETIREES – A FLORIDA JUDGE AGREES WITH YOUR DISTRICT COURT JUDGE – RETIREE BENEFITS ARE CONTRACTED AND INVIOLATE.

    THE COLORADO WE LIVE IN.

    Fact #1: Governor Hickenlooper signs bill this week to give a raise to state legislators. Fact #2: State legislators steal contracted, earned, fully-vested, and accrued retirement benefits from elderly in our state (SB 10-001, COLA theft bill.)

    Our values are warped.

    Thank God the courts are beginning to correct the outright, unabashed theft of public pension benefits that has occurred in a number of states across the U.S. Read below the clarity that this Florida judge brings to the matter, it is truly breathtaking.

    COLA LAWSUIT VICTORY IN FLORIDA! – FLORIDA JUDGE: IT’S ILLEGAL TO TAKE EVEN FUTURE COLA ACCRUALS FROM EMPLOYEES, LET ALONE COLA BENEFITS THAT HAVE ALREADY BEEN EARNED AND ACCRUED (SEE: COLORADO GENERAL ASSEMBLY, SB1.)

    The Florida Legislature attempted pension reforms that were not nearly as aggressive, in terms of risk of unconstitutionality, as those adopted by the Colorado General Assembly. Nevertheless, the Florida Legislature has been smacked down by the courts.

    Here are some noteworthy portions of the Florida ruling:

    “This court cannot set aside its constitutional obligations because a budget crisis exists in the state of Florida. To do so would be in direct contravention of this court’s oath to follow the law.”

    “To find otherwise would mean that a contract with our state government has no meaning.”

    “There was certainly a lawful means by which they could have achieved the same result.”

    “Florida law is clear that a legislature can, as part of its power to contract, authorize a contract that grants vested rights which a future legislature cannot impair.”

    “The elimination of the future COLA adjustment alone will result in a 4 to 24% reduction in the plaintiffs total retirement income. These costs are substantial as a matter of law.”

    “Where the state violates its own contract, complete deference to a legislative assessment of reasonableness and necessity is not appropriate because the state’s self-interest is at stake.”

    “All indications are that the Florida Legislature chose to effectuate the challenged provisions of SB 2100 in order to make funds available for other purposes.”

    “If a state could reduce its financial obligations whenever it wanted to spend the money for what it regarded as an important public purpose, the Contract Clause would provide no protection at all.”

    “The Takings Clause is intended to prevent the government from forcing some people alone to bear public burdens, which in all fairness and justice should be borne by the public as a whole.”

    “Defendants are further ordered to reimburse with interest the funds deducted or withheld . . . from the compensation or cost-of-living adjustments of employees who were members of the FRS prior to July 1, 2011.”

    Here’s a link to the decision in Florida:

    http://judicial.clerk.leon.fl.us/image_orders.asp?caseid=49809133&jiscaseid=&defseq=&chargeseq=&dktid=87117441&dktsource=CRTV

    Here’s hoping that one day Justus will prevail in Colorado. Read all about it and support the lawsuit at saveperacola.com.

    1. council says:

      You may ask for those colas but where will the money come from to pay them? Bankruptcy is a final decree. WHen the pity bank is dry, you have a problem. How about reducing the public sector employee roles but the same percentage the COLAs increase by on an annual basis. That way we pay for the COlAS and reduce the pension costs over time….fair exchange?

  10. Maria says:

    Why doesn’t anyone ask Don how much he makes…lol – public employees get paid what he pays in taxes..lol Along with his Local 1033 salary $250,000, he is also on other boards within the Union as a whole – so he probably makes closer to $500,000 plus he also gets his car, insurance, gas and required maintenance paid for by Local 1033. Along with all expenses relating to business – only he can eat at the Old Canteen, Capriccios, Euro Bistro, Metacomet Country Club and all these highly expensive eateries and be reimbursed by Local Union 1033 under miscellaneous expenses. Miscellaneous expenses cover an array of expenses if you didn’t already know. Next time there is a monthly union meeting – members should really ask where their money is going. A lot more than they think goes in Don’s pocket and unfortunately some of his staff members who really don’t deserve it. Ask how much his secretary makes – I will bet it’s close to what his undeserving son receives or more. How about his wife who has a high position within Network RI if nobody knew or all his relatives who have the higher paying jobs within the city – just saying.

  11. El Ninio says:

    And his worth every penny then some..Stop been a hater keep those bus station bathroom cleam.No room for haters cause they never got a city job..Now they want to see average folks lose their low paid pension ..losers

  12. Maria says:

    When you learn how to spell and write comprehensively then we can talk – you must be a city employee…lol

    1. El Ninio says:

      you working the conners in the streets of Providence.? I bet you and your pimp will love to have some benefits ..Your really brilliant btw. you say lol on every sentence .You must be a special child ..

  13. Maria says:

    I write lol because all of this is laughable – you on the other hand can’t write a sentence to save your life. Your capitalization, punctuation and grammar are deplorable. I see by your response that you are a uneducated fool who doesn’t have the vocabulary to put out a good debate. I am a highly educated individual, self-made and earn my money respectably & honestly.

    So in order to even the score and drop to your level – I think it was your mother who had a pimp and you are the product of a john.

  14. I am genuinely grateful to the owner of this site who has shared this fantastic piece of writing at here.

  15. El Ninio says:

    Stick your capitalization punctuation and grammar up your culo. .Your so educated and wealthy but you spend your time writing about someones personal life with lies malicious words .Your envious and jealousy are killing you. Stay by your mail box your welfare check is on its way..LOSER…

  16. Maria says:

    To How to get a guy back – This is not my usual and if a pun was intended with your remark – it is quite acceptable. I made comments regarding this article based on pure knowledge of the facts only to be put down by someone I don’t even know. I will not be treated like this by anyone let alone someone who has no knowledge of me or what I know. Have a great day.

  17. Maria says:

    Looks like I struck a nerve with my remarks to you El Ninio – let me say that it was not I but you who started the put down battle. I did not intend nor pursue any of this. I simply wrote comments on this site that are true and accurate. I never put down the retirees and their low pensions. I am truly saddened by the way they are being treated. It was you who told me to keep cleaning bathroom stations, said I worked the streets, had a pimp, am envious, jealous & now according to you, collect a welfare check. I do none of these and don’t like the insinuation that I do. Did I hit below the knees with my remarks about your mother & you, yeah, but you deserved it. I don’t know but you know by this name but that doesn’t mean that I don’t – I might & you might know me. Unfortunately, I came here to debate & you came to fight. I just wish you would get your facts straight before you come out fighting. Everything I said about Don & the union are absolutely true and the only people suffering are the union members & taxpayers. I could go on and on about what I know but the above references I made about Don & the union should be enough to wake anyone up but again unfortunately, no one speaks up.

  18. Maria says:

    Correction to the above – I do not know you by this name but I might.

  19. El ninio says:

    Lmao you don’t know who I’m by my name but you might ?? What does this mean ? This is an open forum comment / chat as one would. You commented 3 more x after my comment so
    apparently I struck a neverve on you. But any who even if all you say is 100% accurate you have no right nor makes it right to attack someone’s family.. This has nothing to do with Donald or his family,but such is life we all take our first amendment rights to attack people spred lies and destroy people reputation. It all starts early in life .. And we are ALL guilty of that . I did not like the fact that you attacked Donald character and especially his fam ..But whatever Maria .. Iill be the first one to admit that there’s lots of waste in all city’s and town and it all starts with the suits that sit behind a desk ,those are the biggest thiefs politics is dirty and their position is always used to better themselves only .. If you MIGHT know me give a call will do coffee we can discus this further and try to find a solution .. Lol . Peace

  20. Maria says:

    Yes I commented three times after your post – one was to another person who commented – one was to you and the other was to correct a mistake I made when typing to you. Yes 100% of what I have stated here is true. I would not attack someone’s character without absolute knowledge of the facts. These are not rumors or lies – they are truths. I have not destroyed Donald’s reputation – he has. I just helped because he deserves it. You and I both know that it’s all in who you know to get anywhere in this state. It’s wrong and those who truly would appreciate a good paying job & benefits lose out because of people like Donald Iannazzi. His son is absolutely undeserving of a $90,000 a year job. Did you know that Dominick Ruggerio’s son works for Donald? One hand washes the other again in this state! What uneducated 25 year old person makes that kind of money unless it’s self made or done illegally? None. Donald’s son’s salary could employee 132 people making the average union member wage of $17.00 – and they would have to work for it. I am not attacking Donald’s family – I am stating facts. Donald has no character – he lost that along time ago when he sold himself out for his pockets. There are many union members out there who can’t stand him and can’t wait for him to leave this year. They call him unfair, a sellout and other things that I won’t mention here.

    1. El ninio says:

      For all I know you could be working for Mr Iannazzi , I hope he keeps his friends close and his enemy’s closer. If you know of so many wrong doings and illegal things that Donald is involved in I suggest you hold a press conference or go public with this story of yours. Weather his son got a high paying job or not has nothing to do with Donald . Jobs of that nature has to be approved by board members . You say in this state you need to know people to get certain jobs .? It’s like that everywhere its the nature of the beast . He didn’t do anything that you would not do if you held some sought political influential job . Did you ever go to a restaurant and did not have to wait like everybody elase because you know the owner or a waiter ? I’m sure you did.. You seem to be bitter and angry person and have lots of time in your hands . Find a hobby .. I’m done posting here I don’t have your kind of time in my hands ,I have a real job and responsibility to spend my time with .. Have a nice day who ever you are ..

  21. [...] Iannazzi, Local 1033′s business manager, earlier this month told WPRI.com he has the legal authority to negotiate on behalf of its retirees and said he wants the city to split the pension system so [...]