Economy
5:52 am
Tue July 19, 2011

Central Falls receiver rolls out pension changes

PROVIDENCE, RI – It's now up to Central Falls retirees and workers to decide whether they will accept changes to their pensions and benefits. Those changes include a haircut for everyone who retired before turning 60-years-old.

A formula will determine the cut. And if approved, former firefighter Howard Baskins is going to feel it. He retired at 42-years-old after suffering a heart attack on the job. He says he takes 16 pills a day and wears a pacemaker. Between proposed cuts to his pension check and higher deductibles and healthcare co-pays, Baskins is not sure how he'll get by.

"I have no earning capacity, I have no way of making up the difference. I gave all I can give - my body," says Baskins.

Central Falls Receiver Robert Flanders Jr. proposes changes to eligibility, cost of living adjustments and to healthcare benefits. He assures retirees that nobody's pension will be cut by more than half nor will a pension be allowed to fall below $10,000.

Flanders says if workers and retirees don't sign off on the changes, then Central Falls will likely end up in bankruptcy court, where a judge can terminate union contracts.

"A haircut still looks a lot better than a beheading. In bankruptcy it's possible that there could be a worse situation than what we're proposing," says Flanders.

Flanders says he'll need to know by August 1st whether city workers and retirees will accept the changes. Central Falls has an $80 million unfunded pension liability, with the police and fire pension expected to run dry in October.

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