Some city pensions can outlive retiree

PROVIDENCE, R.I. (WPRI) - Former Providence Fire Chief Gilbert McLaughlin's pension has ballooned to $197,000 a year tax-free thanks to a generous cost-of-living-increase, and a city ordinance means the largest pension in Providence may just outlive the retiree.

According to city law, "..a pension equal to 67½ percent of the retirement allowance ... shall be paid to his surviving spouse, for her lifetime until she remarries."

In other words, the pension doesn't disappear when the retiree does.

Other workers have the option of passing along their benefits to a spouse when they pass away too, but it comes at a cost of a smaller pension when they retire.

For those collecting an accidental disability pension – given to city workers who sustained an on-the-job injury – the inheritance is automatic. The perk can also be applied to children under the age of 18.

McLaughlin's pension has ballooned since he retired in 1991 because of a generous 6% COLA, a term for an annual pension raise. When he was awarded a disability pension for an injury he says he sustained years earlier, McLaughlin took home just over $59,000 a year tax-free. That take-home has now more than tripled because of the annual increases.

• Use a "COLA Calculator" to see how percentages affect pensions

He declined a request for an interview when a reporter visited him at his home.

Approximately 775 retirees collect between a 5% and 6% compounded COLA, according to records from city hall. Of those, 427 are collecting an accidental disability pension like McLaughlin and can pass along their pensions.

Providence Mayor Angel Taveras and city council have passed an ordinance that will freeze COLA’s for those receiving a pension of $40,000 or greater until the pension fund is 70% funded. Latest figures show the Providence retirement account is only 32% funded.

• Nesi: McLaughlin pension in-depth

McLaughlin’s pension is a source of anger for many retirees who make no where near that amount. Providence firefighter's union president Paul Doughty says pensions like McLaughlin's cast a shadow over all city workers and retirees.

"I think in a way it misleads the public that all the firefighters have these gold-plated pensions," Doughty said. "That's not the case so there is a lot of frustration."

Doughty does believe pensioners collecting a disability pension should be allowed to pass along their pensions.

"If you are disabled in the line of duty you give up something in terms of quality of life and that is an important trade off," Doughty said.

Tim White ( twhite@wpri.com ) is the Target 12 investigative reporter for WPRI 12 and Fox Providence. Follow him on Twitter: @white_tim