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A Small City’s Depleted Pension Fund Rattles Rhode Island
By MARY WILLIAMS WALSH and ABBY GOODNOUGH
Published: July 11, 2011
The small city of Central Falls, R.I., appears to be headed for a rare municipal bankruptcy filing, and state officials are rushing to keep its woes from overwhelming the struggling state.
Just over one square mile, Central Falls has a tightly packed population.The impoverished city, operating under a receiver for a year, has promised $80 million worth of retirement benefits to 214 police officers and firefighters, far more than it can afford. Those workers’ pension fund will probably run out of money in October, giving Central Falls the distinction of becoming the second municipality in the United States to exhaust its pension fund, after Prichard, Ala.
The city, just north of Providence, is small and poor, but over the years it has promised police officers and firefighters retirement benefits like those offered in big, rich states like California and New York. These uniformed workers can retire after just 20 years of service, receive free health care in retirement, and qualify for full disability pensions when only partly disabled.
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So some of these cops are collecting pensions into their 90s, I wonder what age they were allowed to retire? 45?
So the city is basically eliminating all basic services to fund these publci union employees, yeah, that's good government
Now let's tell the truth for once, Rhode Island is going bankrupt because the economy has reduced revenues to such an extent that they cannot pay for outstanding obligations.
Just like a very well todo middle manger who has been out of work and can no longer pay the bills they were perfectly capable of paying before.
Now let's tell the truth for once, Rhode Island is going bankrupt because the economy has reduced revenues to such an extent that they cannot pay for outstanding obligations.
Just like a very well todo middle manger who has been out of work and can no longer pay the bills they were perfectly capable of paying before.
Did you read the article? The pensions would take up almost SIXTY PERCENT of the budget, that is insane.
And using your example, why would the middle mgr think it rational to buy a porsche in an outstanding year and think that the gravy will roll in forever? BTW, the economy has little to do with it, as the article explained the benefits offered were far beyond what the city could afford at any period - this city never had the revenue even in the best of times to pay for them.
What set this off is that so many people are retiring now, and those retired are living for a very long time.
Did you read the article? The pensions would take up almost SIXTY PERCENT of the budget, that is insane.
Yes it is insane, just as blaming the union for negotiating a contract when folks didn't think or could possibly forsee that they would be faced with the economic crisis that many cities now face.
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And using your example, why would the middle mgr think it rational to buy a porsche in an outstanding year and think that the gravy will roll in forever?
Ah, we aren't talking about porches, we are talking about professional firefighters who I am sure at the time negotiated their contract based upon prevailing wages in other similar locals.
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BTW, the economy has little to do with it, as the article explained the benefits offered were far beyond what the city could afford at any period - this city never had the revenue even in the best of times to pay for them.
Now which is it, a gravy train or never a gravy train? Of course in the NYT story that you reference too it also points out that the city could have opted into the state wide pension fund but instead opted to operate its own. Is that also the union's fault? Is it the union's fault that the state legislature opted out fire and police of the state limits on collective bargaining, is it the unions fault that the state allowed arbitration based upon national prevailing wages and not local? Please to explain all of this in a tab bit more instructive manner rather than the sophistic "its the union's fault".
That's one reason corporations got rid of pensions over a decade ago and moved people over to 401K plans.
but mostly it was the PEOPLE that wanted that
the 80's- and 90's had the YUPPIES..they were UPWARDLY MOBILE, and didnt want to be anchored down with a pension, they wanted the bennie of a pension(savings plan) (kind of like the old christmas funds) that was MOBILE...wah-la..the 401k
Did you read the article? The pensions would take up almost SIXTY PERCENT of the budget, that is insane.
This is why public employee PENSIONS need to be eliminated and replaced with investment plans, like 401ks. There is no way a future generation of taxpayers should be obligiated to pay for services received by the current generation.
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