Pawtucket retirees threaten lawsuit after pay increases shut off

Pawtucket retirees threaten lawsuit after pay increases shut off

City officials say they had no choice

PAWTUCKET - Members of the Pawtucket Public Safety Retirees Association are threatening legal action after Mayor Donald Grebien's administration shut off their cost of living pay increases on July 1.

Grebien put the annual increases, otherwise known as COLAs, on the chopping block last year as part of his funding improvement plan for the police and fire pension plan, which remains severely underfunded.

The pension plan was at 34 percent funded with a $144.9 million unfunded liability shortly before Grebien filed a plan with state officials last April detailing how the city would get the fund to an 80 percent funded level within 20 years. Officials risked losing state funding if they didn't submit the plan.

Jeremiah "Jerry" O'Connor, president of the local association of retirees and a former police officer, told The Breeze that "unilaterally" eliminating the COLAs was an "illegal" move by Grebien and one that will end up costing the city in the long run.

O'Connor said retirees were informed last year that the COLAs could disappear, but the threatened action never took place in 2013. The "harm has now occurred," he said, and the retirees are planning to take legal action if city officials don't reverse the decision.

O'Connor appeared before the Pawtucket City Council last week to ask members to put a stop to Grebien's plan. This is a violation of the U.S. Constitution and the collective bargaining agreements pensioners retired under, he said.

Grebien spokesman Dylan Zelazo said he "can't fault" retirees "for being upset" about the suspension of COLAs, but said this is part of the necessary "shared sacrifice" needed to get "everything under control" with the public safety pensions.

A three-year suspension of COLAs will result in a savings of about $1 million combined over three years, said Zelazo. The city will keep saving money after that because increases will be based on an overall smaller pay.

Zelazo said nothing about the COLA suspension changed from what was approved last year and officially implemented this year.

According to O'Connor, city officials can't win this fight. Attorneys have agreed to take their case for cheap because they are so confident that they'll be awarded fees when the retirees win, he said. The estimated cost of the fight for the retiree side is upwards of $300,000. Grebien has been "ill-advised" to defend this action, said O'Connor.

"I don't want to say 'I told you so' afterward," he said.

O'Connor said the city should look at other options to deal with the pension shortfall instead of "messing" with something they negotiated with people who gave "some of the best years of their life" to protecting the city.

The suspension of COLAs is only for those who earn more than $30,000 in annual pay, said O'Connor, meaning he and his sub-$10,000 police pension personally won't be impacted by the change. The elimination of the COLA will cost retirees about $3,000 apiece over the three years, he said.

Zelazo said the Grebien administration stands by its decision to suspend the COLAs. This was part of the funding improvement plan that all communities with "critical status" local plans were required to submit last year. "Critical status" means that a pension plan is funded at less than 60 percent.

According to Zelazo, the city had several hundred thousand dollars in state aid tied to adhering to the state mandate to fix the pension plan. The funding improvement plan was inspected and approved by the City Council, he said.

"This does not touch existing benefits at all," he said.

Many other communities are instituting COLA freezes as long as 10 years and putting a dent in existing benefits, said Zelazo, but Pawtucket officials chose not to go either route.

This was never about just going after retirees, said Zelazo, but taking a "multi-pronged" approach, including negotiating with the active police and fire union members as well.

"It's all part of a much broader thing that we're dealing with, how do we get everything under control," he said.

Prior to the last two years of no tax increases, Pawtucket residents were subjected to maximum allowable tax increases and the city still has one of the highest tax burdens in the state, said Zelazo.

O'Connor said he's not advocating for a tax increase, but the city has had two years without one and is in a much better position financially than it was a few years ago.

Zelazo said he's not an attorney and can't guarantee that the city will win if the retirees go to court, but he noted that "this action was taken out of necessity," and that's something that courts take into consideration.

"It's not something we chose to do out of the blue," he said.

The city "went about this in a responsible manner" to create a "much more viable pension system going forward," said Zelazo.

Comments

Suspend the COLA permanently, these drunken slob unions are totally out to lunch......let em go to court.....the right financial move was to suspend, be happy you not in the position of the Central Falls retirees who are getting pennies on the dollar because the pension fund literally ran out of money....a pensiion fund with "34 percent funded with a $144.9 million unfunded liability " has a serious going concern question....pick your poison unions, fight for COLAs or risk getting nothing.....Good move Don

To my brothers and sisters of Pawtucket. Hebert vs. Woonsocket will be decided very shortly. Stay united !

The Unions deserve to get back what they worked for in their careers. Specifically to police & fire who put their life on the line for 20 plus years. Not surprised That Greb & his Administration pulled a move like this. Good Luck Brothers & Sisters!

Who were they protecting the people of Pawtucket from? Genghis Kahn? Act like real public servants and take the pain that your neighbors have already felt. Are you men or mice?

COLA's are the biggest scam ever dumped on citizens who have to pay these increases. Did you work for a salary or a pension? I hope we go the route of central falls if you want to keep these ridiculous increases.
The sense of entitlement in this city is amazing!

Who do think you are calling "drunken slob unions"? Why don't you put your name to it? Your a piece of work !

Pawtucket current Pension Liablity understates GASB 68 effect . Liabilities will soar by $100 million this year.

I do not think this is an appropriate term either. How many people do you know in the private sector who are going to get a pension with a COLA? I know of none. If there are any it is either a small percentage or its just a Coca Cola!
Pawtucket has decided to burden its residents with some of the highest taxes in the Nation- why? To fund things like pensions and COLA's.
O'connor sees the citizens suffering oppressive taxation but he still wants more. I know all the Union Membership does not see it that way so I won't call them drunken slobs, but those who do feel entitled at our expense I would call Greedy at the least.
They should be happy to have any pension at all.

What other cuts has he made. I'd like to see all the cost cutting measures by department on a spreadsheet. C'mon. I know you have a spreadsheet workbook with Pawtucket's departments, eh?

I find it very amusing that Oh Really is the pot calling the kettle black. If you have courage use your name - not some stupid monicker.

On the union slob thing, it of course is referring to the fat slob stereotype that Hollywood and the media have made jokes about for decades - get used to it! If you cannot take the heat, get out of the kitchen.

On the COLA issue and union greed in general, for decades the unions have run roughshod over "elected" officials and pretty much gotten whatever they wanted. Few of them had the spine to stand up to the pressure (nor did they want to lose the support or $$$$$) of the union thug mentality.

I am not native (16 years) but, feel so bad for the old folks whose taxes continue to go up up up with no consideration to whether it is justified. Many people in the real world (outside public employment) have NOT received raises for years at times due to no fault of their own. However, they feel glad to have a job and the union "members" should have the same gratitude - that is not the case. When you give a mouse a cookie - they will want a glass of milk. Your "elected" officials have given in so many times that when somebody finally shows some guts and says NO they balk and scream bloody murder. Tough toenails! You should be like all the rest of us - you need to show some gratitude to the people who pay your ridiculous salaries and benefits. Of course, that is not likely to happen until MORE "elected" officials show spines. Grow a pair and you would be surprised what can be done when you remember you work for US - not the other way around.

First of all, it's a shame that people cannot discuss (intelligently or otherwise) a topic without name-calling. It is a diversionary tactic that is the last resort of those who have no facts to present.
I wonder how many people who are critical of public safety employees know that:
1) These employees do not get Social Security. They don't pay in, they don't get any out.
2) These employees pay into their own pensions, while those in the private sector do not. Typical public employee contribution is about 9.5%, which is MORE than most people pay into SS and Medicare.
3) Most cities and towns at some point have illegally not funded their part of these pensions. That makes all of you complicit in breaking the law, and then criticizing your victims.
4) Those of you who do participate in SS have, or will, get COLA adjustments. How many of you will turn them down?
The more you know...

The taxpayers are forced to pay benefits, colas, etc to people who are now giving 0 service to the city. Approx half of our budget goes to retirees. The tax rate on real estate and vehicles is too high. Cuts need to made. It is now time for city government jobs to be one of those crummy, lowpaying, bad benefit, no
pension type jobs. Also, the workers may have some pay in but the city contributes thousands per year per worker.
We just cannot afford it.
Also, name calling does not always prove there is nothing of substance to be said, in this case there is something very worth saying.
We are tired of paying so much to a protected class of society.
Complicent in breaking the law? do you honestly believe that?

No, "complicit", not "complicent" in breaking the law - because it has been publicly revealed for years that towns and cities have violated the law in this regard. Yet neither the judicial branch nor the voters have demanded any accountability and keep electing the same lawbreakers. So, yes, complicit. If my debts are funded indirectly and I learn that they are not being honored, then I would pursue the middleman who is spending the money elsewhere.
You apparently didn't read either the article or my previous post in any detail, as it is about RETIREES' pensions, not benefits for active employees. These are people who have already made a career of sacrifices. Nothing to do with vehicle taxes. And the point is that the city has NOT paid in the thousands of dollars per taxpayer that they are legally obligated to.
There is nothing worth saying when it is attached to the phrase "drunken union slobs". As a matter of fact, retirees are no longer in the union.
Central Falls has shown us that they are NOT a protected class, that the Rule Of Law can be violated.
Let us know when you decide to give up COLAs on SSI.

Wasn't the non-contribution to SSI part of the most excellent contract union leaders negotiated for? Hmmmm? I was never given the opportunity to negotiate away my forced SSI contributions for decades, even though I collect a military pension after 22 yrs. of active Marine service. Huh. Maybe unionize the military? We could always use the "it's not in my contract", "talk to the shop steward" excuse while "bobbing, weaving & ducking" incoming rounds and mortars. LOL <Being the devil's advocate for your arguement, Bob.> BTW, did I misspell anything? LMAO.

So will the retiree's brothers and sisters join arms and vote en masse against Grebien? It doesn't matter. He's unopposed. Why would a democrat mayor choose to mess with the Pawtucket Public Safety Retirees Association retirement? Where IS all the tax revenue going to? Pawtucket is in the top 7 out of 39 cities and towns for the highest tax rates on personal property, personal real estate, commercial real estate, and motor vehicles. Hmmm.

Bob Lincoln's assertion that is simply wrong. He stated that "These employees pay into their own pensions, while those in the private sector do not. Typical public employee contribution is about 9.5%, which is MORE than most people pay into SS and Medicare."

Those of us in the private sector certainly do pay into our own pensions, usually more than 9.5%, including Social Security. However, our private pensions do NOT typically pay us back tenfold, and they most certainly are NOT guaranteed, as anyone who has lost 1/3 or more of his retirement stash when the stock market tanked can tell you.

It is not an assertion, it is true. Private employees do not pay into their pension funds at all, they are 100% funded by the employer. Social Security, which is NOT a pension plan, along with Medicare, represents 6.2% and 1.45%, respectively, or 7.65% each for the employer and the employee. This, my RI math flunkies, is LESS than 9.5%. SSA has not failed to pay you. And your "retirement stash", if you are referring to a 401K, is an entirely separate and risk-filled venture which is not available to public employees through their job. 401K participation is purely voluntary to the employee, and is often accompanied by an employer match. But it is a completely separate topic from pensions, which is all that is available to public employees through their employers.

BTW, Ms. Rivet, private pensions ABSOLUTELY ARE guaranteed, they are backed by the federal government. In fact, our tax dollars are currently being used to prop up pensions that Toyota abandoned when they closed the NUMMI plant in California. Since they incorporated it as a separate company and closed it, the profitable parent corporation was able to duck its responsibility and put the burden on US taxpayers. But regardless, private pensions are guaranteed, by the federal government.

Mr. Lincoln, lets just make one thing very clear....not every private sector job is offered a pention. I work for a relatively large regional company in a salaried position and i will not recieve a pention. I do not recieve a COLA. I am also under the age of 30 so the change that SSI will be availible to me the way it is now is very unlikely. So the fact that someone who has just started with a Public Sector position that has required no advanced education (as most Private Sector "pentioned" positions do) is automaticly vested into a pention just as long as they stick around long enough is an issue.

And before you can get on your high horse and point out a typo, i mean to say "so the CHANCE that SSI"

Mr. Lincoln, please refer to the various types of pensions as defined below.

World English Dictionary, http://dictionary.reference.com/browse/pension?s=t
pension 1 (ˈpɛnʃən)

— n
1. a regular payment made by the state to people over a certain age to enable them to subsist without having to work
2. a regular payment made by an employer to former employees after they retire
3. a regular payment made to a retired person as the result of his or her contributions to a personal pension scheme
4. any regular payment made on charitable grounds, by way of patronage, or in recognition of merit, service, etc: a pension paid to a disabled soldier

There is another type of pension as well, often seen in Europe: the boarding house pension, in which little old ladies rent out rooms in their homes to tourists and other travelers, to provide themselves with income in their golden years.

As the per capita income in RI is $28,707, it is very likely that most pensions in the private sector are of type #3.