New data pegs locally run RI pension plans’ shortfall at $2.3B
April 10th, 2012 at 9:35 am by Ted Nesi under Nesi's Notes
Remember those 36 locally run pension plans with the $2.1 billion funding gap? The shortfall is now nearly $2.3 billion and may get bigger, the Projo’s Randy Edgar reports:
The overall health of 36 pension plans managed by individual cities and towns is worse than previously thought — about $170 million worse, members of the state’s Locally Administered Pension Plans Study Commission learned Monday.
The spread between assets and liabilities for those plans, reported by the state auditor general last year to be $2.1 billion, is now thought to be about $2.3 billion, Susanne Greschner, chief of the state Division of Municipal Finance, told the commission.
And the spread could grow as cities and towns revise the assumptions they use to project long-term pension costs, based on a new set of state-mandated studies. Among the assumptions that could change are those for investment returns and longevity. …
Greschner said all but 4 of 24 cities and towns that have locally managed plans submitted the required studies. The state is still waiting for one or more studies from Cumberland, Little Compton, Narragansett and the Warwick School Department, she said.
If you want to find out how your town is doing, all the new studies are posted here. A quick perusal shows Coventry’s police plan [pdf] is just 11% funded, with less than $8 million saved to pay $67 million in benefits.
• Related: 13 local pension plans worse than RI’s; Cranston, Scituate lag (Dec. 5)
Tags: non-MERS, pensions, raimondo-chafee
Nesi's Notes covers politics and the economy in and around Rhode Island for WPRI.com. (Twitter: 
Can’t tax your way out of that kind of debt. Bankruptcy. Going down like a house of cards.
I agree with you, however I anticipate that Rhode Island politicians will at least try to raise taxes still more, if only to throw the extra money down yet more ratholes.
I guess Narragansett thinks they are special. They have a history of non-compliance with State Law. Former state auditor Almonte can tell you that as well as the new Congressional Candiate Riley who spearheaded exposing the political misdeeds in Narragansett.
Ms. Raimondo told the two dozen municipal leaders at CCRI to resist the urge to focus on short-term solutions, which might unfairly target one group — and leave the community vulnerable to legal challenges. Isn’t this exactly what she did? Targeted state workers and left the state open to legal challenges that the state cannot defend. Going to be interesting.
TEACHERS: MEET YOUR NEW PENSION LEADER.
The periodical Pensions and Investments has just reported that Meredith Williams, Executive Director of Colorado’s public pension, PERA, is resigning effective June 30 to become Executive Director of the National Council on Teacher Retirement (NCTR).
Read the full story here:
http://www.pionline.com/article/20120405/REG/120409914/colorado-peras-top-exec-to-lead-teacher-retirement-council
According to their website, the NCTR is “dedicated to . . .promoting the rights and benefits of all present and future members of the (pension) systems.” Further, the NCTR aims to “assure self-sufficiency for retirees by providing a predictable benefit that is guaranteed for life” and to “preserve and protect the guaranteed rights of plan participants to their promised benefit.”
During his tenure at Colorado PERA, Meredith Williams and the PERA Board of Trustees pursued a controversial strategy for reducing PERA’s unfunded pension liabilities . . . taking fully-vested pension benefits from retired Colorado PERA members.
According to a few members of the Colorado Senate (one a prime sponsor of the legislation that took the retiree benefits) “fully 90 percent of the PERA fix comes from benefit cuts to current and future retirees” (Senators Josh Penry and Greg Brophy).
Soon, Meredith will be sitting down with his new board of directors. I propose that he break the ice by asking the board to settle the following pressing pension reform questions:
Does Colorado’s example of taking fully-vested retiree pension benefits conform with the mission of the NCTR to “promote the rights and benefits of present and future members”?
Does Colorado’s example of taking fully-vested retiree pension benefits conform with the mission of the NCTR to seek “self-sufficiency for retirees by providing a predictable benefit that is guaranteed for life”?
Does Colorado’s example of taking fully-vested retiree pension benefits conform with the mission of the NCTR to “preserve and protect the guaranteed rights of plan participants to their promised benefit”?
. . . and a few general pension reform questions hanging in the air:
Setting aside the morality of such reforms, is the taking of fully-vested, contracted, accrued and earned pension benefits a route that should be considered by state and local governmental entities?
Why should the contractual obligations of state and local governments to corporations take precedence over their contractual obligations to public employees?
Why should state and local governments be permitted by the courts to abandon their contractual obligations in order to make discretionary public expenditures?
Should pension plan sponsors have the ability to legally alter “automatic” statutory COLAs as opposed to “ad hoc” COLAs?
Do statutory COLA provisions somehow enjoy a lesser status in the law, less weight or force in the law, relative to all other statutory DB pension provisions?
As I understand it, state and local government contributions to their defined benefit plans are a fraction of (single digits) state and local government expenditures for all other purposes. What level must this ratio reach before a public plan is in a “crisis?”
Should plan sponsors have the ability to take fully-vested pension benefits from retirees before they have impacted the partially-vested pension benefits of current employees (see Colorado PERA, SB 10-001)?
Should the federal courts weigh in on state violations of state contracts (to the benefit of the states) or should state courts be the final arbiters?
Enquiring minds.
Visit saveperacola.com, Friend saveperacola on Facebook, support the Colorado pension theft lawsuit!
Again ????