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Wed June 22, 2011
The Pench: Double dipping in Providence
By IAN DONNIS
PROVIDENCE, RI – All this week WRNI is digging into Rhode Island's pension crisis. One of the problems pointed out in the state treasurer's report is the practice of double dipping -- cashing in on more than one pension. While the Providence pension plan operates separately from the state pension, it serves as a good example for what happens when retirees double dip.
It's been more than a decade since Evelyn Fargnoli has served on the Providence City Council. But at 87-years-old, she enjoys an unusual distinction: she receives six pensions. Half of them are from her late husband, Ralph. The others are a union pension, a municipal pension, and one for serving as an elected official.
Although Fargnoli's case is unusual, she's one of at least 31 former Providence councilors who receive multiple pensions from the city. The main two are a regular municipal pension and a so-called "elected officials' pension" - available only to elected officials in Rhode Island's capital city.
The elected officials' pension costs Providence just under $140,000 a year. That's compared to the city's $828 million unfunded pension liability.
But Providence Mayor Angel Taveras says multiple pensions for political insiders undermine public confidence in government.
"Absolutely, there's an effect," Taveras says. "I think it contributes to this feeling of, there's nothing we can do about it. I think it's part of the reason that many people don't participate in government, and you'll see lower turnout in certain cases in terms of voting and other things. We need to make sure that people realize the government serves them, and not the other way around."
Here's how the elected officials' pension works in Providence: Participants have to hold office for at least eight years. They pay $350 each year into the elected officials' pension. When they leave office, they get an annual payment that multiplies that $350 by their number of years as an elected official. So a 10-year councilor, for example, would get a payment of $3,500 a year.
Taveras says he learned about the elected officials' pension while running for office last year. He says he was "Surprised. I think that one pension is enough for one position, and that was part of why I declined my elected officials' pension."
Charles Mansolillio is a former city solicitor who served in Buddy Cianci's administration. He says the elected officials' pension was created during the mid-20th century, when pay was a lot lower for city councilors.
But their pay has increased over the last 50 years, from $1500 to almost $19,000 a year. Still, the elected officials' pension has survived.
Mansolillo happens to be among the 31 former councilors currently receiving the benefit. He says he's hardly getting rich from it.
"I myself receive a very small pension for my eight years on the city council," he says. "It doesn't add up to a lot of money, for me it doesn't."
City records show Mansolillo's monthly payment for his elected officials' pension is less than $200. But some other former councilors get much more because of payments from multiple pensions.
Former city council members receive the municipal pension and elected officials' pensions -- the ones Evelyn Fargnoli is receiving. Fargnoli and some others receive a third pension administered by a municipal union, Local 1033 of the Laborers International Union. That pension is no longer offered to new councilors. Then there are other former Providence City council members, who worked for the state and collect a state pension. And that creates a class of retired city council members collecting on four pensions.
And still others have put their Providence pension payments on steroids by taking advantage of perks not available to most people.
One such person is Thomas Glavin. The rules state that workers don't have to pay into the municipal pension after 25 years. So Glavin matched his 22 years on the Providence Council with three years of city employment to reach that number. But he made the most money in those last three years. Since that's part of the figure his pension payments are based on, he's due to receive $68,000 a year through the municipal pension. That's on top of a $15,000 a year elected officials' pension.
It's hard to know exactly how many former Providence councilors have built up their pensions in the same way as Glavin. Informal estimates put the number in the neighborhood of between 15 and 50.
A woman who answered the phone at Glavin's home says he didn't want to comment for this story. We also tried interviewing Evelyn Fargnoli, the former Providence council president who receives six pensions. She declined a request for an interview, beyond saying she's receiving only what she's entitled to.
For his part, former Providence council president John Lombardi is unapologetic about how he's due to receive three pensions: the municipal pension, the elected officials' pension, and he's in line for the Local 1033 pension that was eliminated years ago for new councilors.
Lombardi says he gets a little less than $20,000 each year for his two Providence pensions. He says that's not much in comparison to the 26 years he spent working on the council.
"I think that when you extrapolate, if you do the numbers," Lombardi says, "some of us probably work for a dollar an hour. And even to this day even though I'm not on the council, I still receive calls, I'm still assisting constituents."
Lombardi says he declined an opportunity to bulk up his pension for years he worked for the city because he thought it wasn't the right thing to do. An unsuccessful candidate for mayor last year, Lombardi says he won't fuss if the city changes its pension benefits.
When state treasurer Gina Raimondo issued her much-awaited pension report in May, she recommended eliminating the practice of double dipping or multiple public pensions.
And after many decades, the elected officials' pension in Providence may be headed for extinction, Taveras says, at least going forward.
"I plan on working with the other council people who have declined the pension and the other council members to make sure we reform our pension," Taveras says, "and I think the elected officials' pension is one of the reforms we need to make."
Like Rhode Island as a whole, Taveras says Providence must reform its own house to prevent pension payments from diverting an ever-growing amount of money from other needs.
Listen to WRNI's entire series on Rhode Island's pension crisis: The Pench.
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