Three of Rhode Island’s major candidates for governor this year – Treasurer Gina Raimondo, Cranston Mayor Allan Fung and Providence Mayor Angel Taveras – have all struck deals with union members and retirees over the last two years to reduce the shortfalls in the pension funds for which they’re responsible.
So how much did they save?
In dollar terms, Raimondo obviously achieved the highest savings: a $3.9 billion cut in the state’s unfunded liability under the terms of last week’s proposed settlement, compared with a $186.4 million reduction from Taveras’s settlement and a $37.4 million reduction from Fung’s settlement. But that’s not really a fair comparison, since the two mayors were dealing with significantly smaller total liabilities.
Here’s how much the three agreements saved on a percentage basis:
Raimondo is still the clear winner here, getting union leaders to agree to a settlement that reduces Rhode Island’s unfunded pension liability by 43%. (Workers, retirees and lawmakers still have to vote on the deal.) Taveras comes in second with a savings of 18%, while Fung comes in third with a 13% reduction.
Another way to look at the various settlements – what were the pension plans’ funding levels before and after the deals were struck? What percentage of their future liabilities could be covered by their current assets?
Raimondo’s settlement brought the state employees pension fund to 55% funded, while Taveras’s brought Providence to 31% funded and Fung’s brought the closed Cranston police and fire plan to 19%. (State workers are used because actuaries didn’t give a single funded level for the state.) Take a look:
(The numbers in this post were calculated based on reports from the various pension plans’ actuaries: Gabriel, Roeder, Smith & Co. for Raimondo and the state; Buck Consultants for Fung and Cranston; and The Segal Co. for Taveras and Providence.)
• Related: Chart: RI’s pension shortfall, with and without the settlement (Feb. 17)
An earlier version of this post incorrectly listed lower savings for the Taveras settlement and higher savings for the Fung settlement.