Staring at bankruptcy and a significant reduction in retiree benefits, police and firefighters in Central Falls, RI, recently agreed to significant pension benefit cuts.
Gov1 has covered Central Falls, RI, and the state as it pertains to pension reform. But with bankruptcy now upon the city, details are beginning to emerge about long-term plans.
A recent New York Times article discussed many of the reasons Central Falls was headed into bankruptcy, and the likely outcome of any legal proceeding. A combination of decisions by municipal officials—such as not paying enough into the retirement system—enabled municipal employees to take advantage of loose disability guidelines; for example, 60 percent of the police and fire department are on full permanent disability.
Now that appears to be changing. Retirees could have their benefits cut by as much as 55 percent. Retirement ages are set to increase, contributions will be required for health benefits, and COLA adjustments will be decreased.
Fire and Police employees agreed to a reduction in benefits primarily because they had no choice; there is a hope that additional funding will be found in the next five years to offset the cuts.
The original New York Times article is available, as is the official bankruptcy filing.