Police pension fund has a big 2020

Police pension fund has a big 2020

NORTH PROVIDENCE – The town’s police pension fund last year gained more than 10 percent, or $4.7 million, says Mayor Charles Lombardi, a huge year for a fund that was once in tatters.

The Breeze reported back in September 2013 that the town’s injection of $20.6 million from the Police Department’s $60 million winnings in a settlement with Google a year earlier had pushed the fund to more than 95 percent funded.

The state’s 2019 report on locally administered pension plans showed that the fund lost about 8.1 percent on its funded status from 2012 to 2018, to 86.8 percent, and that number was about 88 percent last year, said Lombardi. He said the town’s actuary hasn’t completed its work yet, but he’s hoping that funding status could reach 90 to 92 percent with this latest positive news.

“We did good,” he said. “We had a great year, especially the last quarter.”

The fund for 160 or so active and retired officers had taken some losses, he said, largely due to drawdowns as some officers retired.

“We’re in good shape compared to most other communities,” he said, noting that North Providence remains in the top three in the state for highest percentage of funding.

North Providence is among the Rhode Island communities to have lowered their assumed rates of return since 2012, strengthening their funding plans and reducing risk of underfunding.

“Our police officers and their families will never ever have to worry,” said Lombardi.

It was Lombardi who successfully lobbied for the U.S. Department of Justice to allow the town to use the $20.6 million to fill a pension fund that had once been at 45 percent funded, saying no other money should be spent from the fund until permission was granted.

“Thank God we got that money,” said Lombardi this week.

The town has also implemented cost of living increases for firefighters, he said, meaning everyone in public safety is being taken care of.

Taxpayers continue to benefit from the improved standing of the pension fund. The town had been ordered to double its annual payment of $860,000 into the fund prior to the Google-funded fix, so the town has been able to save that amount in each of the six years since the massive infusion, said Lombardi. The $860,000 equals about $1 on the tax rate, meaning the owner of a $300,000 home would likely be paying $300 more each year without it, not including a homestead exemption.

“That was another reason why I fought so hard to get that pension funded,” he said. “It’s a substantial amount of money.”

Former North Providence Detective James Watts originally assisted with the investigation of Google, helping to build a case against the search giant for distributing online ads for Canadian pharmacies that were illegally marketing prescription drugs to Americans.

According to Lombardi, whether “we’re funded at 75 percent or 90 percent, we’re in good shape.”

A fully funded pension plan is one with sufficient funds to cover all current and future obligations.

The approval of $20.6 million to fix police pensions was the first expenditure from the Police Department’s $60 million winnings from Google. There is now little money left in that fund, and a portion of what remains is earmarked toward a new municipal animal shelter.