Tuesday, March 6, 2012

Quick & Fair Resolution to Providence's COLA Dispute

While reports seem to always showcase the City’s “top 25” retirees, no one seems to want to talk about the average (the majority) retiree from Providence who is making somewhere between $20K - $40K – in many cases for 30+ years of service to the City.
Taveras’ plan does nothing to separate the financial burden of these two groups – and that is just plain wrong.

While most of us (if not all) would agree that making more in retirement than a current employee in the retiree’s old job is wrong, Taveras’ proposals do nothing to correct this imbalance. The mayor should consider making a single proposal, capping all current and future pensions at 100% of the current active employee in the position from which the pensioner retired. This would be a “fair” solution to the unfunded liability problem for the current and future stability of the system, even if not a popular move to some of the current retirees who would be immediately affected.

I would like to see a savings projection if this were to be implemented. My guess is that it would be substantially more than Taveras’ target of $29 million.