In Providence pension trial, retirement benefits called the ‘sacred Holy Grail’

The perpetrator was sentenced in Providence in May.

PROVIDENCE, R.I. (WPRI) – The former president of the Providence firefighters’ union said Thursday the city’s decision to freeze his cost-of-living adjustment (COLA) has threatened his children’s college fund, prolonged his second career and forced him to refinance his mortgage in recent years.

During two hours of testimony in the trial involving the retirees who opted out of a 2013 pension settlement with the city, Stephen T. Day explained that he anticipates his 3% COLA would add about $800 to his pension check by 2019, providing a boost to his finances and allowing him help his family and retire.

“That COLA is instrumental in keeping them in college,” Day said, referring to his two children. He also called the COLA “crucial” to deciding when he’ll leave his current job at a car dealership.

Known colloquially as the “opt-out case,” the lawsuit was filed in November 2013 by more than 60 former public employees who refused to support a settlement between the city, its municipal unions and retirees that froze 3% COLAs for 10 years, eliminated 5% and 6% COLAs forever and shifted how pensions are calculated. The deal also shifted retirees over the age of 65 to Medicare.

Day, who served as president of Local 799 of the International Association of Firefighters from 1988 until 1997, is among the central figures in the recent history of the Providence pension system, which lawyers say went from being 70% funded in the late 1980s to around 30% funded today thanks to a combination of overly generous payouts to retirees and the city’s failure to make large chunks of its annual required contribution to the fund for multiple years.

Day joined the fire department in 1980 and was elected to the union’s executive board in 1982. He was elected to the Providence Retirement Board in 1988, the same year he became president of the union. A year later, the board, which was comprised of six labor members and five members from the city, voted to approve 5% and 6% compounding COLAs to hundreds of retired and active public safety workers as well as 3% COLAs to members of Local 1033, the municipal employees union.

Following the vote, about 97 public safety employees retired with tax-free accidental disability pensions, including at least a dozen of the plaintiffs involved in the opt-out trial. (Day retired in 2003 with a service pension that pays him around $3,800 a month, records show.)

During his testimony, Day acknowledged that he negotiated several union contracts for his members. He recalled one contract where, with the city facing economic trouble, he convinced his members to give up a raise and vacation time in exchange for the city agreeing to not change any retirement benefits.

“Those were the sacred Holy Grail,” Day said.

Day was reprimanded by Superior Court Judge Sarah Taft-Carter at least 10 times during his testimony for adding narrative to yes or no questions. He apologized several times, acknowledging that he was emotional. When he returned to his seat in the gallery, his fellow plaintiffs patted him on the back.

Now two weeks old, the trial has largely consisted of the plaintiffs’ lawyers asking their clients to explain how the benefit changes have affected their lives and the defense attorneys questioning the accuracy of their stories. Former Mayor Angel Taveras and Michael D’Amico, the city’s former director of administration, are expected to testify in the coming weeks.

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Dan McGowan ( dmcgowan@wpri.com ) covers politics, education and the city of Providence for WPRI.com. Follow him on Facebook and Twitter: @danmcgowan

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