COLA means $796,871 pension for ex-fire chief if he lives to 100

Cost-of-living adjustments – COLAs – are at the heart of Providence’s pension problem.

The rogue Retirement Board of 1989 awarded 6% and 5% yearly increases to police and fire retirees, which double a pension’s cash value every 13 to 16 years. As I reported this morning, those added costs were pushed by Senate Majority Leader Dominick Ruggerio and Providence’s unions over city leaders’ objections.

To see the impact, look at former Fire Chief Gilbert McLaughlin, whose COLA has boosted his tax-free accidental disability pension by about $30,000 in the last three years alone, from $155,892 in 2008 to $185,672 now, records show. It’s estimated Providence’s pension fund has paid McLaughlin more than $2 million since 1992.

McLaughlin, a Warwick resident, is 75 years old in 2011. His annual pension will be $208,618 when he reaches age 77; $313,685 when he’s 84; $419,781 if he lives to be 89; and $796,871 if he makes it to the ripe old age of 100, estimates by show.

At that point, McLaughlin would have received roughly $13 million in pension benefits since his retirement.

McLaughlin served as fire chief from July 1990 to September 1991, when he surprised former Mayor Buddy Cianci by abruptly quitting at age 55 due to a neck injury earlier in his career. The retiring chief told a Projo reporter the pain had worsened “a little quicker than I thought,” though he added: “It’s nothing I’m going to die from.”

McLaughlin told the paper in 1991 he’d “got crushed” years ago while on duty, and after his neck and shoulders began bothering him, doctors said he should “not to go through another winter” working for the fire department.

McLaughlin is an extreme example, but he’s far from alone. Nearly two-thirds of Providence’s 2,923 retirees got a compounded COLA of 6%, 5% or 3% as of June 30, 2010, depending on when they retired. Here’s how it breaks down, according to Buck Consultants, the city’s actuary:

Tim White contributed to this report.

More coverage of Providence’s pension crisis on

  • Andrew

    Silly me, when I read your headline, my first thought was that it must refer to how much extra $$$ McLaughlin would receive over the lifetime of the contract due to the difference between a 3% and a 6% COLA — not how much he might receive in a single year.

    • Ted Nesi

      Good catch, Andrew. I added a line explaining that our estimates show McLaughlin’s cumulative pension payments would total roughly $13 million at age 100 (in nominal dollars).

      • Andrew

        Don’t misunderstand me — I wasn’t faulting your coverage; I was faulting the absurdity of the size of the COLA!

  • ProJo Login

    Perhaps Mr. McLaughlin might donate some of his largess to some of the retired Central Falls fire fighters who saw their pensions cut in half. Perhaps he could start a charity fund in their name to help them deal with the huge setbacks they have encountered recently. After all, isn’t solidarity between union brothers and sisters what it’s all about?

    • Jim Donahue

      I’m sure the ‘brotherhood’ of firemen goes out the window at such a suggestion.

  • teddy

    $796,871 ? That’s a darn shame someone like that would collect that type of $$$ for a govt. retirement. They aren’t even worth 60K a year…..

    One of the many straws breaking the camel’s back!

  • bob

    He would probably spit venom at any talk of reducing it!

  • Jim Donahue

    Chapter 9 is beckoning Providence and when it happens pensions such as these will be history.

    • teddy

      Yep, they won’t cut it, well, SOON, RI will have NOTHING and they will get NOTHING for pensions!

      Rhode Island–the new Roman Empire-SOON, it will FALL!

    • GaryM


      What may actually be unfolding is a move to write legislation to do pension reform at a local level based on use of police powers of the state instead of Chapter 9. This whole discussion by Treas Raimondo to get each of the towns to document in detail their financial plight appears to support this police powers approach.

      Once properly documented (e.g. documenting that Cranston residents won’t be able to go to Twin Oaks as much if they have to pay the pensions) then the legislation can be written for the specific city.

  • Ronald Dwight

    Legalized thievery. Nothing new on RI

  • Jim Donahue

    I can just hear the union sleep walkers chanting that this pension was deserved.

  • Lee

    Pension payments and COLA’s aren’t paid by the taxpayer. They are paid by the investment interest from the retirement fund. (Assuming the pension is properly administered.) Only the initial principal payments are paid by the taxpayer that builds up the initial annuity amount.

    Only the US military pension payments are a direct transfer of tax.

    • Al Moncrief

      Lee, the crowds with the pitchforks do not want rationality, they only understand force. They have persuaded many elected officials to use force to break contracts. They will not be pleased with the force ultimately imposed by a judge.

      The cherry picking of extreme pension situations in the US (that were put in place by misguided local officials) in lieu of presenting the situation of the typical pension recipient is a disservice. The tossing of red meat to the pitchfork crowd detracts from rational discussion of legal, moral, prospective pension reform options.

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