Councilman Igliozzi: Pension reform must be part of Providence’s deal with firefighters

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PROVIDENCE, R.I. (WPRI) – The chairman of the Providence City Council Finance Committee said Tuesday it is “imperative” for the proposed agreement between the Elorza administration and the city’s firefighters to include “short-term and long-term pension reform measures” if it is going to win support from the council.

Councilman John Igliozzi said he wants to see future hires pay more to the pension system, work for more years before they’re eligible for a pension and receive a smaller benefit when they retire, provisions that are not included in a tentative five-year deal the mayor’s office and the firefighters struck earlier this month.

“If we don’t set the precedent for pension reform with this contract, the city will lose another opportunity to mitigate its unfunded pension liability,” Igliozzi said.

Igliozzi also sent a letter to Public Safety Commissioner Steven Pare and city solicitor Jeff Dana to remind them that Rhode Island law calls for union contracts with cities and towns to be a maximum of three years unless a budget commission or receiver is appointed or if a municipality’s pension system is in “critical status,” meaning it is less than 60% funded.

Communities with pension plans in “critical status,” like Providence, are required to work with the state to address their financial challenges, Igliozzi said.

“The purpose of the state statute is to give cities and towns whose pension systems have reached ‘critical status’ the ability to obtain pension reform from the unions through the collective bargaining agreement,” Igliozzi said. “In return, the incentive is a five-year contract that has short term and long term pension reform measures.”

Providence’s pension system was just 28% funded as of June 30, 2015, with $357.7 million in assets and an unfunded liability of $900 million, according to the city’s most recent independent audit. City officials will release an audit for the fiscal year that ended Jun 30, 2016 by the end of the year.

A spokesperson for the Elorza administration declined to comment Tuesday.

Under the terms of the tentative deal between the administration and the fire union, firefighters would return to working a four-platoon shift schedule in exchange for a reduction in minimum manning, the contractually mandated number of workers that must be on the job at all times. The minimum manning number would drop from 94 firefighters to 88.

Elorza has said the deal will save the city $15 million over five years with the possibility of more savings from an increase in healthcare co-shares for existing employees and new retirees. Firefighters would receive a small pay increase on Jan. 1, 2017 as well as 2% on July 1, 2017, 2.25% in year two, 2.25% in year three, 2.75% in year four and 3.25% in the final year of the deal.

The contract must be approved by the union and the City Council before it is sent to Elorza’s desk.

Continue the discussion on FacebookDan McGowan ( dmcgowan@wpri.com ) covers politics, education and the city of Providence for WPRI.com. Follow him on Facebook and Twitter: @danmcgowan

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