A Small City’s Depleted Pension Fund Rattles Rhode Island

The small city of Central Falls, R.I., appears to be headed for a rare municipal bankruptcy filing, and state officials are rushing to keep its woes from overwhelming the struggling state.

The impoverished city, operating under a receiver for a year, has promised $80 million worth of retirement benefits to 214 police officers and firefighters, far more than it can afford. Those workers’ pension fund will probably run out of money in October, giving Central Falls the distinction of becoming the second municipality in the United States to exhaust its pension fund, after Prichard, Ala.

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Posted in * Economics, Politics, City Government, Economy, Labor/Labor Unions/Labor Market, Pensions, Personal Finance, Politics in General, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

4 comments on “A Small City’s Depleted Pension Fund Rattles Rhode Island

  1. IchabodKunkleberry says:

    If Social Security benefits (for most Americans) are being considered
    for budget cuts, then in fairness and “equal protection under the law”,
    the defined benefit plans of state, county, and municipal
    employees must also be subjected to meticulous scrutiny. Benefit
    plans for current and retired federal employees, including members
    of Congress, must also be on the table when cuts are being
    discussed for retirement plans.

  2. Statmann says:

    Lots of bad news for Rhode island. The Dio of RI sure doesn’t need that. Its 2002 through 2009 experience was quite bad with Members down 22.8 percent, ASA down 25.7 percent and real (addjusted for inflation) Plate & Pledge dollars down 14.4 percent. Even worse for the future was the decline in Infant Baptisms by 39.0 percent and the decline of Marriages by 52.1 percent. While in D.C., +Wolf is putting in a good word for South Sudan which is very good. She might mention Central Falls as well. Statmann

  3. Cennydd13 says:

    Hmm, let’s see…….that amounts to $46,728 (per year) for each retiree. Not too shabby, but if the city’s in such bad shape financially, I don’t see how they can afford it.

  4. Br. Michael says:

    Just to try to introduce some sanity: we have different sovereigns and different units of government and different contracts. You are talking about apples and oranges.