NEW! Pension Open Government website: RIOpenGov.org

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Go to RIOpenGov.org – our new, interactive website with searchable & sortable data displays for 26,500+ RI pensioners

Go to our Pension Reform page – pension reform updates, meet our nationally recognized special pension “task force”

Media Release

October 27, 2011, Providence, RI – The Rhode Island Center for Freedom and Prosperity today launched a new ‘open government’ website that adds new information to the current pension reform debate in the Ocean State.

The website, www.riopengov.org  , is an interactive online database of state public employee pension data for current retirees. The data, which can be viewed in both table and graph modes, was provided by ERSRI (the Employees’ Retirement System of Rhode Island) through an open records request.

The information for 26,500+ pensioners can be sorted or searched by employee name, retirement year, benefit type, benefit structure (group), state of residence, and disability type. The website shows base annual pension as well as the COLA benefits for individuals or groups of individuals. The website was created by Visible Government Online, a 3rd party vendor to the RI Center for Freedom …

Read the full Media Release here

More Municipal Pension Systems Soon to be Included on RIOpenGov.org

The following municipal pension systems are not included in our current RIOpenGov.org website. An ‘Open Records’ request has been sent to each city and town. Check back for status updates regarding receipt of the requested records.

WARWICK: Warwick Police and Fire Pension Plan I, Warwick Police Pension Plan II, Warwick Municipal Pension Plan, Warwick Public Schools Employees Pension Plan, Warwick Fire Pension Plan II – limited manpower, may only be able to provide limited data without charging major fees (no other state or municipal entity has suggested fees for this inromation).

NEWPORT: Newport Police and Firemen’s Pension Funds – received only some of the data we requested. Determining now how to incorporate with more complete data.

CENTRAL FALLS: Central Falls Police Pension Fund – no response

CRANSTON: Cranston Police and Fire Employees Pension Fund – has requested a 20-day extension. Data expected in mid-November.

PROVIDENCE: Providence Employees Retirement System – initial internal confusion as to who to direct the request to.

EAST PROVIDENCE: East Providence Firemen and Police Pension Fund –  has requested 20 day extension. Data expected in mid-November.

WEST WARWICK: West Warwick Town Pension Plan – no response

WESTERLY: Westerly Police Pension Fund – data expected by early November.

Task Force: Pension liabilities are “under-cooked”!

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While some opponents to pension reform in the Ocean State have suggested that Treasurer Raimondo has “cooked the books” by over-stating the pension liability  … a new report by Eileen Norcross of the Mercatus Center, a member of the special pension task force assembled by our RI Center for Freedom, suggests that it is more likely that the books are “under-cooked” … and that the true pension liability may be twice as large as stated, or about $18 BILLION!

Read the full Mercatus Center Report here …

Rhode Island’s state and municipal pension systems face large and growing unfunded pension liabilities. The governor and state treasurer have identified pension reform as a key to stabilizing the state’s finances and also to ensuring a sustainable retirement fund for Rhode Island’s public employees. According to government estimates, the unfunded liability for municipal plans and state plans totals $9.3 billion. These figures are calculated under assumed discount rates based on the expected return on pension asset investments. However, according to economic theory, pension liabilities should be valued based on their relative risk and thus the return on Treasury Bonds is currently the appropriate discount rate to use when valuing liabilities. Under this valuation, the unfunded liability for municipal governments including MERS and locally administered plans (and excluding the local portion of the teachers’ plan) swells from $2.4 billion to $6 billion. The unfunded liability for the state plans increases from $6.8 billion to $12 billion.

The result of this miscalculation is that many municipal governments are in far worse shape that is currently reported, which presents serious revenue challenges for a number of Rhode Island municipalities. Unfunded municipal pension liabilities currently exceed municipal revenues by $2.6 billion in Rhode Island. The revenue index created in this paper indicates that Johnston, Providence, Cranston, Newport, and Central Falls are all in particularly bad shape relative to other municipalities in the state.

Among the eye-opening facts and figures in the report:

* Rhode Island estimates the unfunded liability for municipal and state plans is $9.3 billion, while Mercatus researchers calculate it as closer to $18 billion.

* Using the authors’ revenue index, 17 of the 39 Rhode Island municipal governments are in the danger zone-their unfunded pension liabilities exceed revenues.

* How did they reach this number? The authors argue that the huge difference in estimates is based on inaccurate accounting. In fact, financial markets and economists would calculate pension liabilities based on their relative risk, but currently Rhode Island calculates their liabilities based on the expected return on investment of the pension assets.

Click here to read the full report from the Mercatus Center website …

Clicke here to read our Center’s Media Release

MEDIA COVERAGE:

ProJo blog …

GoLocalProv blog …

WJAR TV-10 blog …

Bloomberg/BusinesWeek: http://www.businessweek.com/ap/financialnews/D9QSOVSG0.htm

Boston Globe – Online: http://articles.boston.com/2011-11-08/business/30374064_1_pension-liability-pension-problem-pension-increases

The Daily Journal: http://www.dailyjournal.net/view/story/f13c3e264ac14fb8940dae3ab1f69d50/RI–Pension-Underestimated-Costs/

Individual.com: http://www.individual.com/storyrss.php?story=146552126&hash=f715e25035269eeddf2683e5a2ee7c80

MSNBC.com: http://www.msnbc.msn.com/id/45213474/ns/local_news-providence_ri/#.TrrJxXJxB7w

WLNE-TV (ABC): http://www.abc6.com/story/15988707/researcher-says-ri-understating-pension-problem

Yahoo! Finance: http://finance.yahoo.com/news/Researcher-says-RI-apf-166933908.html?.pf=retirement&mod=pf-retirement&x=0&.v=1

Bastiat Institute: http://www.bastiatinstitute.org/2011/11/08/rhode-island-pension-problem-larger-than-reported/

Opposing Views:

Providence Phoenix blog …

Pensions Beyond Pay

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Among the more detailed features of the RIOpenGov.org pension page is the comparison of pensions against final average salaries. A push of the button on the “detailed search” tab shows there to be 3,298 pensioners whose retirements are paying better than their jobs ever did.

These retirees are collecting $20,903,314 more from the state than they did in the final years of their careers. On average, they have been retired for 18 years and still have an estimated 13 years to go — having retired at 56. For all retirees, the corresponding averages are 13 years retired, with 15 to go, having retired at 58.

Interestingly, the number of pensions above pay does not match up with the number of years retired as well as one would expect. Apart from a huge burst of retirements in the early ’90s, the trend line for total retirements isn’t surprising; the farther from retirement pensioners get, the fewer of them there are:

 

Viewing pensions that exceed pay as a percentage of total pensions, however, yields a more unexpected result:

 

As a matter of simple arithmetic, it would make more sense for the percentage to continue to grow as the years go up, thanks to cost of living adjustments (COLAs).  That the result does not match expectations merits further investigation, but for the time being, suffice it to say that such peculiarities give some credence to suggestions that pension deals of the past were inordinately generous and should be pulled back.

Among retired public-sector workers whose pensions exceed their working salaries, the average pension is $45,815 per year, which is $6,338 more than the average final salary. For the pension system overall, the average is $31,388, which is $12,021 less than the average final salary.

At this point, it makes sense to look at differences in the results based on the retirees’ former employers, and clearly, not all pension-granting public entities are equal. Of the 184 public employers, 81 have retirees who have surpassed their salaries. For 43 of the employers, more than 10% of all retirees are in this group.

% of Retirees Exceeding Salaries
Overall # of Pensions
Overall Average Pension ($)
Foster School Dist.
47
19
40,962
Burrillville Police Dept.
33
9
28,660
Northern Rhode Island Collaborative (NC)
33
6
16,222
Barrington Public Schools
28
202
42,651
Warwick School Dept.
26
980
44,598
North Providence Hsg. Auth.
25
4
22,592
Cumberland School Dept.
22
334
43,614
Middletown Public Schools
22
242
42,334
Newport School Dept.
21
363
41,593
Johnston School Dept.
21
215
43,505
Coventry Public Schools
21
325
47,098
Cranston School Dept.
20
769
44,425
Lincoln School Dept.
19
193
45,148
Providence School Dept.
19
1361
41,604
North Smithfield School Dept.
19
116
41,529
Pawtucket School Dept.
19
632
43,330
Tiverton School Dept.
18
161
41,322
East Providence Schools
17
479
45,030
Scituate School Dept.
17
100
41,365
West Warwick School Dept.
16
275
45,431
Foster/Glocester Reg. School Dist.
16
104
39,093
Woonsocket School Dept.
16
469
42,289
Central Falls Collaborative
16
166
44,896
Portsmouth School Dept.
16
211
43,065
North Kingstown School Dept.
16
307
41,183
Little Compton School Dept.
15
27
38,233
North Providence School Dept.
15
251
46,787
Glocester School Dist.
15
41
38,173
South Kingstown School Dept.
14
230
40,237
Coventry Fire Dist.
14
7
33,822
Town of North Smithfield
14
14
15,970
Chariho Regional School Dist.
14
248
40,728
Bristol Warren Reg. School Dist.
14
296
41,421
EAST GREENWICH-COLA-NC
13
15
17,591
North Smithfield Police Dept.
13
15
26,427
East Greenwich School Dept.
13
175
41,045
Burrillville School Dept.
13
158
42,284
Cranston Police
13
8
41,956
Westerly School Dept. (NC)
13
8
13,585
Westerly School Dept.
12
217
43,149
State
12
10,945
27,139
City of Pawtucket
11
105
20,739
Smithfield School Dept.
11
173
41,023
City of Woonsocket
9
65
22,746
Newport School Dept. (NC)
9
171
16,049
Jamestown School Dept. (NC)
9
23
12,951
Narragansett School Dept.
8
123
40,643
Town of South Kingstown
8
25
25,559
Warren Police Dept.
8
25
24,693
Narragansett Bay Commission
8
38
19,563
EAST GREENWICH-COLA
7
14
29,504
Jamestown School Dept.
6
31
41,140
City of Cranston
6
79
17,879
Town of Scituate
6
16
14,945
Exeter/West Greenwich Reg. Schools
5
75
39,039
Town of Johnston
5
38
19,537
East Providence Schools (NC)
5
304
15,041
Central Falls School Dist. (NC)
5
42
11,350
East Greenwich Police Dept.
5
22
32,698
Middletown Public Schools (NC)
5
22
18,716
R.I. Airport Corporation
5
22
43,537
Glocester School Dist. (NC)
4
23
9,698
Town of Warren
4
46
10,211
Newport Housing Auth.
4
26
21,796
Bristol Warren Reg. School Dist. (NC)
4
79
12,882
North Providence Fire Dept.
4
55
29,392
Johnston School Dept. (NC)
3
149
11,802
North Kingstown Police Dept.
3
30
33,592
Cranston School Dept. (NC)
3
418
12,929
South Kingstown School Dept. (NC)
3
117
12,226
Scituate School Dept. (NC)
2
41
10,525
Tiverton School Dept. (NC)
2
45
8,570
Chariho Regional School Dist. (NC)
2
47
14,184
Woonsocket Police Dept.
2
52
32,490
City of East Providence
2
62
27,958
Pawtucket School Dept. (NC)
2
377
10,952
Cumberland School Dept. (NC)
2
127
8,359
Town of Bristol
1
70
12,936
North Kingstown School Dept. (NC)
1
160
10,849
Woonsocket School Dept. (NC)
1
257
9,536
Town of North Providence
1
132
8,424

Notes:
“NC” indicates school personnel who receive municipal, rather than teacher, pensions.
“Overall” data is for all pensions, whether or not they exceed final average salary.

 

With some notable exceptions, schools in general and teaching staffs in particular dominate the list for retirees who make more in retirement than while working. And teacher pensions tend toward the higher end of the dollar scale.  However, there is no apparent correlation between the percentage of retirees over-earning their working salaries and the average number of years that each entity’s pensioners have been retired: