CityPensionReform

Cranston Pensions to be focus of Task Force organized by the Center for Freedom

Providence, RI – Representatives of several major policy organizations today announced the formation of a collaborative effort to provide research and analysis that may be useful to local officials as they work to design pension reform options for Rhode Island’s underfunded municipal retirement systems.

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For Immediate Release; February 13, 2012

Providence, RI – Representatives of several major policy organizations today announced the formation of a collaborative effort to provide research and analysis that may be useful to local officials as they work to design pension reform options for Rhode Island’s underfunded municipal retirement systems. Cranston is the first municipal pension plan that the team will analyze. Cranston, one of many localities in Rhode Island which has an independent pension plan, has a pension funding level below 25 percent and reported unfunded liabilities of $245 million, placing it among the worst-funded in the state.

Following the successful task force assembled last fall regarding statewide pensions, the collaboration is organized by the Rhode Island Center for Freedom and Prosperity’s Special Pension Task Force. Task force members will provide transparency data, research, and policy analysis, including for Cranston’s actuarial report and funding plan, both of which are required of all independently managed municipal retirement systems by the Rhode Island General Assembly this year.

The Task Force also announced that pension data for some 1714 Cranston retirees, both in the local and state administered plans for teacher, police, fire, and other retired personnel, is now available to view via interactive displays on the RI Center for Freedom’s transparency website, www.RIOpenGov.org. This website will serve as the home page for all future work published by the Task Force.

Central Falls, Rhode Island recently filed for bankruptcy, and its retirees have agreed to sharp pension cuts as part of the reorganization. The state of Rhode Island in November passed comprehensive pension reform legislation implementing the defined contribution model of compensation and canceling cost of living allowances for state-run plans. The task force members hope to provide useful information that may guide other municipalities to make preemptive adjustments to their pension fund management to avoid the difficult consequences that Central Falls is currently experiencing.

The Task Force members, who will provide commentary and analysis and who may participate in statewide forums or committee hearings in the General Assembly, include Eileen Norcross of the Mercatus Center, Rich Danker of American Principles Project, Bob Williams of State Budget Solutions), and Mike Stenhouse from the RI Center for Freedom & Prosperity.

“This task force is set up to get the best economic, legal, and policy analysis on how to deal with a pension shortfall at the local level,” Rhode Island Center for Freedom and Prosperity chief executive officer Mike Stenhouse said. “This is a national crisis that must be solved from the ground up through the principles of fiscal federalism.”

“This collaboration is a great opportunity to advance best practices in pension reform at the local level,” Rich Danker, project director for economics at American Principles Project said. “We hope that the task force’s transparent pension fund analysis will foster responsible decision-making.”

“The Mercatus Center is pleased to offer its analysis on public pensions to Cranston as it has to other cities and states,” senior research fellow Eileen Norcross said. “Fixing the structural problems embedded in these retirement systems is crucial to our nation’s fiscal health.” Norcross has done leading research on public pension deficits in Rhode Island, Illinois and New Jersey as part of the Mercatus Center at George Mason University’s State and Local Policy Project.

 Additional bio information for Task Force members can be found on the Center’s website at www.RIFreedom.org/pension-reform.

 For over 25 years, the Mercatus Center at George Mason University has been the world’s premier university source for market-oriented ideas-bridging the gap between academic ideas and real world problems. A 501(c)(3) tax-exempt organization located on George Mason University’s Arlington campus, Mercatus works to advance knowledge about how markets work to improve our lives by training graduate students, conducting research, and applying sound economics to offer solutions to society’s most pressing problems.

American Principles Project is a Washington-based 501(c)3 organization. Founded by Princeton Professor Robert George in 2009, last year it became the first public policy organization to sponsor a presidential debate, which was shown on CNN. APP works across three areas: economic policy, education, and Hispanic outreach. It’s economic initiatives are public employee pension reform and monetary policy reform. It has worked to promote awareness of the public pension crisis and proactive reform ideas.

State Budget Solutions, a non-partisan organization advocating for fundamental reform and REAL solutions to the state budget crises, is a non-partisan, positive, pro-reform, proactive organization that is anchored in fundamental-systemic solutions.

 The Rhode Island Center for Freedom and Prosperity, a non-partisan public policy organization, is the state’s leading free-enterprise think tank. Firm in its belief that freedom is indispensable to citizens’ well-being and prosperity, the Center for Freedom’s mission is to restore competitiveness to Rhode Island through the advancement of market-based reform solutions.

Media Coverage:

GoLocalProv: NEW: Pension Task Force to Focus on Cranston

Cranston Patch: Pension Task Force Sets Sights on Cranston’s $245 Million Black Hole

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