JOHNSTON, R.I. (WPRI) – Johnston Mayor Joseph Polisena’s administration and the town firefighters’ union have agreed to a deal aimed at stabilizing the town’s pension fund for public-safety retirees.
“This was really an albatross around our neck that is no longer an albatross,” Polisena, a fifth-term Democrat, told Eyewitness News. He described himself as “very, very happy” with the outcome.
At issue is the Johnston Police and Fire Pension Trust, ranked one of the worst-funded public retirement systems in Rhode Island. The plan was less than 15% funded as of last June, with an unfunded liability of $228 million, according to Johnston’s latest annual audit.
Town leaders approved a plan to turn around the pension fund in 2013, including a provision to freeze retirees’ annual cost-of-living adjustments (COLAs) for 20 years. William Conley, the town solicitor, said that vote kicked off years of negotiations with firefighters and retirees to reach an agreement all sides could accept.
Under the terms of the settlement, approved by Superior Court Judge Sarah Taft-Carter last month, the union agreed to a five-year COLA freeze, from 2017 to 2022, and other benefit changes. In exchange, the town agreed to contribute $8.5 million to the pension fund by June 30, and to increase that amount by 3% annually for 19 years or until the plan is fully funded, whichever comes first.
“I always tell people, and it’s true, it took 30 years for our pensions to get this bad in all cities and towns – it’s going to take 20 or 30 years to fix it,” Polisena said. “But we finally got a resolution, and I can put my head down on the pillow at night because we fixed the plan without going to taxpayers and asking for millions and millions of dollars.”
A retired firefighter himself, Polisena acknowledged, “I cut my own pension.” He continued, “I was ready to lose my pension if I had to. … I was not going to bankrupt the town to pay for pensions.”
Polisena said his administration is scheduled to begin pension negotiations with active and retired police on Wednesday, and he hopes to reach a similar deal.
Johnston is one of a number of Rhode Island communities facing huge shortfalls in their independent local pension plans. There are 34 such plans statewide, and the treasurer’s office says 20 are in critical status, meaning they are less than 60% funded. That includes Providence, which has an unfunded liability of nearly $1 billion.